Senator Klobuchar Fixed None Of The Problems With Her Antitrust Bill; But Made Sure To Carve Out ACTUAL Monopolists Like Telcos And Finance Companies

Policy

from the what-are-we-doing-here? dept

Look: there are very real issues with the state of the internet today, including the amount of power a few companies have. But that doesn’t mean any solution is a good solution. Unfortunately, Senator Amy Klobuchar, whenever given the option, seems to put forth the worst possible plan. It’s mind boggling.

For a while now, Klobuchar, along with Senator Chuck Grassley, have been pushing their American Innovation and Choice Online Act (AICOA). It’s got a fair bit of support, including from companies and organizations I often agree with on the issues. But, this bill has serious problems. Many of us raised concerns about those problems, and even made suggestions on how to fix the problems. There are ways to create a bill that would target the actual bad practices of internet companies. But this isn’t it.

For a few months, Klobuchar has apparently been working on a new and improved version of the bill, which was revealed last night. Somewhat incredibly, it fixes none of the problems people raised. The major change: making sure it doesn’t apply to telcos and financial companies.

I only wish I were joking. Of course, this is the same Klobuchar who, on a different antitrust bill, made sure to carve out her state’s largest employer, Target. So, we get it. Klobuchar cares more about making the lobbyists and specific industries happy than tackling the real problems of her bill. It’s pathetic.

The main “focus” of the bill is that it’s supposed to bar certain large companies from preferencing their own products. So, for example, Yelp has spent over a decade whining that Google showed people the results of its own Local search, crowding Yelp results out of search. The bill is designed to say that companies can’t do that any more. Of course, there are legitimate concerns that this will mean certain companies sending people to very useful products that people actually like will violate this bill. The quintessential example of this: when doing a search on a location, Google can point you to Google Maps. But, under this bill, that would be problematic.

To us, the biggest concern has been how this bill actually is a content moderation ban in disguise. It says that covered companies cannot:

discriminate in the application or enforcement of the terms of service of the covered platform among similarly situated business users in a manner that would materially harm competition;

So, Amazon telling Parler that it violates AWS’ terms of service and booting it off the service? That would not be allowed under this bill. Remember, Parler sued Amazon, and a key part of their initial claims was that because Amazon treated Twitter differently than Parler (which wasn’t true at the time, as Twitter had only just signed a deal to use AWS but wasn’t on it yet), that it was anticompetitive for Amazon to remove Parler. The judge in that case was not impressed, but if AICOA becomes law, suddenly we’re going to see a ton of claims like this in response to moderation choices.

Tons of companies already love to claim that moderation decisions are about harm to competition. Hell, for many years, the main company going after Google for antitrust was a really, really spammy tool called Foundem, that was upset that Google had realized that users hated getting sent to Foundem, and downranked the site. Foundem (apparently funded by Microsoft) spent years insisting this was “anticompetitive” rather than “making search work better by not sending users to spammy sites they don’t want.” But, again, under AICOA, arguments like that are going to have to be considered by judges.

Downranking spammy sites and services, or removing sites that ignores terms of service like Parler, now become competition law minefields.

It’s difficult to see how that’s good for anyone, other than the operators of sketchy sites.

As we’ve noted, everyone in the Senate actually knows this. Because the main reason that Klobuchar keeps this nonsense in the bill and doesn’t fix the language, is because she knows that this is the only way to keep Republicans on the bill. Republicans see this content moderation trojan horse in the bill, and are thrilled with it. Because they think it’s going to allow lawsuits to protect Parler, Truth Social, and their other also ran websites.

Remember, Ted Cruz was so excited about this bill because it would, in his words, “unleash the trial lawyers” to sue Google, Facebook and others for content moderation decisions.

Republicans are supporting this bill because they know it will be used to hit internet companies with all sorts of lawsuits over their moderation decisions.

Of course, it appears that some Republicans worried (or, rather, some telco lobbyists told Republicans) that the law might ALSO result in broadband providers facing the same sorts of nonsense lawsuits. Indeed, part of the original bill could have been read as a kind of net neutrality bill in disguise, because larger ISPs would be barred from similarly “favoring” services over others in a way deemed anticompetitive. And you can bet that some telcos that rely on things like zero rating were worried.

So, that brings us to the major change in this new version of Klobuchar’s bill: she carved out the telcos to make sure the bill doesn’t apply to them. Even though telcos are way more of a competition problem than any online service. Here’s some new language in the bill excluding telcos. It explicitly says that the definition of an “online platform”:

does not include a service by wire or radio that provides the capability to transmit data to and receive data from all or substantially all internet endpoints, including any capabilities that are incidental to and enable the operation of the communications service.

Got it? So, no preferencing. Unless you’re the only broadband player in town. Then, go hog-wild, according to Senator Klobuchar.

Nice work there. That won’t make people cynical at all about the political process.

Of course, once again, this is almost certainly appeasement to Republicans, who, for clear political reasons, want to continue to pretend that telcos are no big deal, and that it’s only the big internet providers who are evil.

It makes no sense at all that Democrats like Amy Klobuchar are playing right into their hands, and giving them everything that they want. But, of course, Klobuchuar has decided for political reasons that she wants to be seen as the senator who took on big tech for her next presidential campaign. And, if that means handing Republicans all the tools they need to file a ton of vexatious lawsuits to try to force companies to enable more hate speech and propaganda, so be it.

It’s pure cynical opportunism.

Oh, and also, it looks like financial firms got a little carve out as well. The original bill said the term online platforms would apply to websites that “facilitates the offering, advertising, sale, purchase, payment, or shipping of products or services…” The new version of the bill covers those that “enables the offering, advertising, sale, purchase, or shipping of products or services…”

So, the same list minus payments.

That’s two giant industries — telcos and banks — that were able to secure their carveouts. But, no effort to fix any of the actual problems of the bill.

With the original bill, NERA Economic Consulting had written up an analysis of companies that would be considered covered platforms in the bill, noting that it directly would hit just six: Google, Apple, Facebook, Amazon, Microsoft, and likely TikTok. However, it also noted that there were 13 other companies that were below the size thresholds in the bill, but close enough that they would likely “take measure to avoid significant risk incumbent upon exceeding the thresholds.” Notably, many of those included broadband companies and financial companies. By my count, the new carve outs in the bill likely cut that list of 13 by at least 7.

It’s possible that some of the others might be excluded as well, though I’m not as sure. Still, it seems pretty clear that these new carveouts were directly because of lobbying by these firms that didn’t want to be included, despite the fact that all are arguably much more problematic, and have much less readily available competition than the companies targeted by the bill.

It’s enough to make one think that senators like Klobuchar don’t really care about doing the right thing at all. They just want to be seen as doing something.

Filed Under: aicoa, amy klobuchar, antitrust, content moderation, discrimination, preferencing
Companies: apple, facebook, google