Rep. Pramila Jayapal’s Amazon-busting legislation, the “Ending Platform Monopolies Act” that would potentially force the company’s dismantling, has earned Biden administration support, the 7th District Democrat said in an interview with GeekWire.
“They are supportive, actually,” Jayapal said in a recorded interview. “And you might have seen that they appointed some of our best people that we were pushing, (Federal Trade Commission chair) Lina Khan, (National Economic Council deputy director) Bharat Ramamurti, (special assistant to the President) Tim Wu, many others.
“And even the Attorney General for antitrust (Jonathan Kanter), great choice. We’re excited about him. So it’s looking very good.”
The legislation, which appears to target Amazon by limiting its antitrust restrictions to retail sales companies that are “larger than $600 billion” in market capitalization, is part of a five-bill antitrust package to limit the power and reach of the big four technology companies: Amazon, Facebook, Google, and Apple.
The Ending Platform Monopolies Act, as one component of the overall legislative package, seeks to stop dominant platforms’ abilities to leverage power across multiple business lines in a way that puts competitors using the same platform at a disadvantage. For example, the bill could eliminate the Amazon Basics line because Amazon owns the platform and with those Basics products competes directly with other users who sell similar items.
An Amazon spokesman declined to comment on the recent Jayapal interview and instead referenced a June statement from the company’s vice president of public policy Brian Huseman.
“We are still analyzing the bills, but from what we can tell so far, we believe they would have significant negative effects on the hundreds of thousands of American small- and medium-sized businesses that sell in our store, and tens of millions of consumers who buy products from Amazon,” Huseman wrote.
“More than a half-million American small- and medium-sized businesses make a living via Amazon’s marketplace, and without access to Amazon’s customers, it will be much harder for these third-party sellers to create awareness for their business and earn a comparable income.”
Doug Ross, a law professor and antitrust expert at the University of Washington, said he has little doubt that the administration is at least warm to the legislation. He agreed with Jayapal that the appointments of Khan, Wu, and Kanter indicate a rethinking of antitrust law at the highest levels of government.
But, he added, he doesn’t believe that the way Amazon runs its business is a violation of current antitrust standards — at least as courts have interpreted them for the past 40 years.
“The legislation is saying, ‘you can be a marketplace or a seller or goods — you can’t be both’” Ross said. “But you go into Safeway and you see national brands of peanut butter. And you see Safeway’s house brand. But no one sees that as an antitrust violation.”
This is true, antitrust experts agree. But it’s also true that supermarkets seldom, if ever, place their own house brands in a preferred shelf placement over more popular national brands — something Amazon often is accused of doing in its own online marketplace.
Plus, Jayapal said, Amazon has access to substantial amounts of its supplier’s data and takes unfair advantage of that in a way a supermarket can’t.
“They then collect all of the data on every seller that sells on the marketplace,” Jayapal said. “And then they produce their own private label goods to compete with those that are on the marketplace. All of that means that a small business has really an extremely unfair situation where they’re not playing by the same rules, all of their data is being taken.”
Taken as a whole, the five bills would create a framework to dismantle large tech companies into smaller ones (Amazon and Amazon Web Services, for example); to make mergers more expensive and difficult; to break up businesses that use their dominance in one area to get a stronghold in another; and to stop companies that create purportedly open marketplaces and only to game it to favor their own products.
The sweeping package from House Democrats and Republicans comes after months of study and congressional inquiries about the enormous power and financial reach of Big Tech and the existing regulations to curtail it.
Spokespeople from Facebook, Google, and Apple all declined to comment on Jayapal’s disclosure that her legislation has administration backing. And all pointed to earlier comments that opposed the package of legislation as harmful to businesses and consumers.
The tech companies’ focus on consumer harm is no accident, Ross said. Modern antitrust law since the late 1970s has been shaped by the view that consumer welfare should be the overriding concern — not mandating competition. The view, championed by the late U.S. Supreme Court nominee Robert Bork, and subsequent court decisions have essentially kept antitrust statutes at largely bay when it comes to Big Tech.
After all, the thinking goes, what is the antitrust consumer harm when a product is offered largely for free such as Google and Facebook?
But that consumer-focused thinking about antitrust wasn’t always the case, Ross said.
Originally, antitrust law was developed from the Sherman Antitrust Act of 1890. The act, which forced the breakup of the Standard Oil monopoly (also called a trust), specifically targeted anti-competitive business practices such as buying up or forcing out competitors to control a given market.
“But we’re redefined what’s lawful and what’s unlawful since then,” Ross said.
Jayapal’s legislative push, along with the bipartisan group of lawmakers who are backing the entire antitrust package, amounts to an attempted partial return to the original concept of antitrust, that business competition and innovation should be the paramount concern — an idea publicly backed by Wu and Khan.
In fact, it was Khan’s seminal paper on this exact issue as it relates to Amazon that likely helped her appointment as the FTC chairperson.
Jayapal said she hopes the house can get all five bills to the Senate, “within the next three to six months.”
Ross doesn’t see the need. He thinks the consumer focus of the antitrust theory was a logical evolution of the law from the monopolies of the late 1800s and early 1900s to the modern, efficient, consumer-oriented economy. “I think the antitrust laws we have now are sufficient to address any antitrust issues we have,” he said.