The Senate’s Haphazard and Arbitrary Anti-Tech Bills
The Senate’s American Innovation and Choice Online Act (AICOA) and Platform Competition and Innovation Act (PCOA) are arbitrary and inconsistent, underscoring the failure to ground legislation in consumer harm:
1. AICOA’s thresholds target growth, not anticompetitive behavior, putting more companies at risk as they grow. The bills apply to companies that exceed specific market cap and user thresholds. In the case of AICOA, this is a market cap of $550 billion and either 50 million monthly active users or 100,000 business users. Companies including Visa, Disney, and Walmart may soon find themselves beholden to the bill as their market caps grow: A recent NERA study commissioned by CCIA estimates that 13 additional companies will be affected by legislation within the next 10 years, and an additional 100 companies in the following decade. The immediate result would be a $300 billion loss to the American economy, and restrictive regulations applied to companies whose success takes them above that cap.
2. PCOA also targets companies based on their size but includes specific language to apparently carve out some of the largest companies including Microsoft. The two bills also differ in their definition of an “online platform,” — where AICOA applies the definition to an “operating system,” PCOA is specifically targeting a “mobile operating system,” apparently creating a carveout for Windows. Microsoft otherwise exceeds the bill’s stated user and market cap thresholds, yet is not mentioned as one of the companies covered in a one-pager released by Senator Cotton, a co-sponsor of the bill.
3. The bills’ differing thresholds suggest they are arbitrary. Both bills have been criticized for targeting select large companies while excluding others such as Alibaba, Baidu, ByteDance, Tencent, Target and Walmart.
4. PCOA’s thresholds are frozen in time, showing that its sponsors are aware of the growth and innovation in the marketplace. Tech opponents cannot agree on the theory of the case: where AICOA will eventually encompass other firms, PCOA’s exemptions have been particularly criticized as the bill is strictly limited to firms that meet the size thresholds at the time of the bill’s passage, exempting all other companies that meet or exceed the bill’s thresholds in the future. So Target and Walmart, two highly successful retailers headquartered in the co-author’s home states would be carved out of the legislation even if they eventually overtake rival Amazon.
For more on what others are saying about AICOA, click here.