According to reports from Lever News, the Computer & Communications Industry Association (CCIA) is spending about $1 million to target New Hampshire, and more in other key midterm election states like Arizona and Wisconsin. The announcement warns that the AICOA could end Amazon Prime’s two-day free delivery guarantee and hurt independent sellers who use Amazon and other major platforms to do their (small) business.
Backers say the bill is needed to prevent Big Tech companies from referencing their own products rather than those of competitors and smaller companies. They say it would prohibit major marketplace platforms — like Amazon — from engaging in practices such as giving preference to their own products in search results and collecting nonpublic data about companies selling on the platform.
“I want to stress that this bill is not meant to break Big Tech or destroy the products and services they offer that many of us, myself included, enjoy and use,” said Sen. Charles Grassley (R-Iowa). “Rather, the purpose of this bill is to prevent behavior that stifles competition while ensuring that pro-consumer innovations and offerings are always available.”
The problem is not the goal, says CCIA President Matt Schruers, but the unintended consequences. For example, he warns that the AICOA could jeopardize features like customers, such as the inclusion of Google Maps in Google search results and Amazon operating as a marketplace for small businesses.
“There is considerable risk that some companies will say the burden of operating as a third-party ecosystem where they cannot cede any of their own services or products into that ecosystem is just too heavy,” Schruers said. “Becoming a proprietary business is a more viable business model.”
Factors that make Amazon Prime successful, such as self-preference of its products — which Schruers says is a common practice seen in grocery stores — would be in violation of the law.
To recent technology roundtableMichael Petricone, Senior Vice President of the Consumer Technology Association, said small businesses are worried about unintended impacts and “want Congress to do nothing that could spoil or weaken the services they rely on for their business.”
On the other end of the corporate spectrum, the US Chamber of Commerce has also spoken out against the bill.
“We believe that antitrust law should remain a narrow tool, with widespread enforcement firmly guided by economic analysis that measures the full impact, both harm and benefit, that accrues to consumers,” the vice-president wrote. House Executive Chairman Neil Bradley in Congress.
And according to data from the National Economic Research Associates, adopting the AICOA would impose an economic cost of $319 billion, resulting in higher retail prices absorbed by the consumer.
However, groups targeting Big Tech are pushing back. National Association of Wholesaler-Distributor Vice President Blake Adami said Amazon used its platform to steer customers away from third-party sellers into the digital arms of Amazon Business.
In the letter to the Senate Judiciary Committee, Adami said Amazon manipulated its “search algorithms to direct customers to Amazon Business’s own products and products that earn Amazon higher profits.”
And a study published by the Institute for Local Self Reliance found that Amazon also benefits a lot from seller fees. For every $100 a seller earns, Amazon takes $34 in fees. From 2019 to 2021, Amazon’s revenue from seller fees more than doubled.
Adami also said, “Amazon uses sensitive data such as product information, customer identities, and transaction data regarding pricing to ‘launch its own competing private label products to undermine NAW members’.” .
But the CCIA’s ad campaign also underscores fears that the legislation will restrict a company’s ability to maintain security standards, allowing data to be accessed by third parties, including foreign companies.
While ultimately voting in favor of the bill, Sen. Dianne Feinstein (D-California) said consumer data protection was still a concern.
“The bill causes very significant security issues,” Feinstein said. “We’re asking companies to remove the protections in place today and, instead, allow hackers and those who seek to steal personal data access to devices.”
So why New Hampshire? The tech industry argues that the legislation is an insider’s game in Washington, D.C., while the average consumer in Bedford or Berlin just wants the products they like and a price they can afford on a secure platform.
“While others focus on DC insider gaming, this ad campaign extends well beyond the device, educating voters in key states on how this legislation would affect the services they rely on and that they like,” said CCIA’s Chandler Smith Costello. “We will continue to move forward with a clear message to Congress: Don’t break what works.”