NEWSFLASH: ABA Antitrust Law Section Skewers Anti-Tech Bill
The American Bar Associations’ Antitrust Law Section— “the world’s largest professional organization for antitrust and competition law” —released an extensive analysis outlining its strong concerns with AICOA, S. 2992, detailing that it “risks causing unpredicted and unintended consequences.”
In the 21-page letter, the Section warns:
— AICOA’s self-preferencing prohibitions “risk consumer harm.” “Online consumers generally desire a convenient one-stop shopping experience that allows them to quickly purchase a cost-effective product. To this end, a platform operator might favor its own product or feature relative to others to ensure a consumer can seamlessly purchase a product with familiar terms and conditions from a known brand at a competitive price. Again, as long as this self-preferencing was unrelated to the ‘core functionality’ of the covered platform, the affirmative defenses would not permit it. In this way, Section 3(a)(9)’s prohibition on self-preferencing similarly risks consumer harm.”
— AICOA departs from U.S. law’s “commitment to protecting the competitive process” which has been the “lodestar to antitrust enforcement.” “The economics of self-preferencing are complex, and the Bill raises a serious risk of unintended consequence based on the broad language of these violations. The Section cautions against departing from the antitrust laws’ commitment to protecting the competitive process as distinguished from favoring one set of competitors over another. This tenet of antitrust has served as a lodestar to antitrust enforcement and should not be omitted.”
— AICOA resembles “common carrier regulations that are not currently enforced by the DOJ or the FTC.” “If the prohibitions in Section 3(a)(1)–(3) mean to establish freestanding prohibitions on ‘discriminatory’ conduct without requiring proof of harm to the competitive process, then the Bill does not supplement antitrust law but is altogether different in kind. Prohibitions of this kind would resemble common carrier regulations that are not currently enforced by the DOJ or the FTC.”
— AICOA’s reliance on size and market capitalization “invites arbitrary enforcement.” “Prohibiting conduct without regard to market power invites arbitrary enforcement and wasteful disruption of normal competitive processes. The risks of unintended consequences are especially severe in digital markets characterized by multi-sided competition, dynamic complexities, and interdependence.”
— AICOA’s forced interoperability requirements “can harm competition.” “The economic literature paints a complicated picture for interoperability requirements. As explained below, interoperability potentially brings competitive benefits by reducing lock-in and assisting new entrants. On the other hand, forced interoperability can harm competition by reducing incentives to innovate and imposing economically inefficient requirements on firms. As a result, the Section cautions against broad-brush assumptions that compelled data sharing and interoperability requirements will promote competition.”
— AICOA’s vague and undefined terms “inject variability and uncertainty into the administration of the law, to the potential detriment of businesses and consumers alike.” “Failure to adequately define key terms—or clearly delegate authority to the FTC and DOJ to define key terms—will inject variability and uncertainty into the administration of the law, to the potential detriment of businesses and consumers alike.”