Senate Judiciary Advances Tech Bill to Floor

The Senate Judiciary Committee voted 16-6 Thursday to advance to the floor a bill that would ban Big Tech platforms from self-preferencing products (see 2201140049). Despite calls from tech companies and Republicans for a legislative hearing, Senate Antitrust Subcommittee Chair Amy Klobuchar, D-Minn., told us she’s focused on getting the bill to the floor.

The subcommittee held “four [antitrust] hearings,” and the legislation was probed in an 18-month investigation in the House. “Right now I’m focused on how we get it to the floor” and the strong majority vote from the committee, she said.

Klobuchar introduced the American Innovation and Choice Online Act (S-2992) with Senate Judiciary Committee ranking member Chuck Grassley, R-Iowa, who told us he’s deferring to the majority on the possibility of a hearing. Chairman Dick Durbin, D-Ill., said previously he will defer to Klobuchar on antitrust matters (see 2103110058).

“It’s certainly reasonable to have hearings on the bill,” Sen. Ted Cruz, Texas, told us. He said he will try to incorporate further amendments into the bill as it heads to the floor. Cruz was one of five Republicans to vote for the legislation. The other four were Grassley, Lindsey Graham of South Carolina; Josh Hawley of Missouri; and John Kennedy of Louisiana. All 11 Democrats voted to advance the bill.

Kennedy suggested during Thursday’s markup that the committee hold a potentially “all-day” hearing on the bill and invite interested tech companies to share their views. Congress hasn’t done anything to address Big Tech issues for the past five years, he said, voicing support for advancing the legislation.

“I always like to have hearings,” Sen. Marsha Blackburn, R-Tenn., told us after the markup. “A fulsome hearing on some of these issues would be helpful.” Grassley recognizes there’s work “that needs to be done,” and if that doesn't occur, he “wouldn’t get 60 votes on the floor,” Sen. Thom Tillis, R-N.C., told us.

The committee agreed to an amendment from Sen. John Cornyn, R-Texas, which was further amended with a second-degree measure from Klobuchar and Grassley. Cornyn offered a provision meant to address his concerns about the bill’s requirement to provide data access to competing platforms, including those in China. His amendment would have banned the transfer of such data to Chinese companies and foreign adversaries and would have allowed tech platforms to make default settings to prevent such transfers.

Klobuchar said the amendment would allow U.S. companies loopholes to circumvent the new law with vague terms allowing anti-competitive behavior blocking interoperability. Klobuchar and Grassley offered a provision in a manager’s amendment, which was issued Tuesday, making clear the bill doesn’t apply to conduct preventing data sharing with U.S.-sanctioned entities and regimes, she said. The second-degree amendment passed 13-9, with Grassley and Hawley voting yes. Cornyn’s altered amendment passed unanimously.

Cornyn offered an amendment to address cybersecurity concerns, which failed on a tied vote. Sen. Mike Lee, R-Utah, offered various amendments that failed. He introduced specific language for affirmative defense on privacy and security, which failed 10-12. Lee raised concerns about giving the FTC and DOJ too much discretion about covered entities, but his amendment on the matter failed. Blackburn also offered an amendment on FTC and DOJ discretion over covered entities, which lost 9-13.

Though some members asked for the committee to delay markup, Durbin said it’s time to move forward. Some 100 amendments were filed, including 82 from Tillis, who didn’t seek votes. The bill isn’t meant to break up Big Tech or destroy their products, said Grassley: The goal is to prevent conduct that stifles competition. He noted the manager’s amendment addresses various concerns, including those about national security, by clarifying data isn’t required to be shared with bad actors.

Sen. Patrick Leahy, D-Vt., said it was necessary to vote the bill out of committee, but he’s not ready to vote yes on the floor. He has concerns the plan makes it too difficult for platforms to protect consumer privacy without worrying about liability, which could result in a race to the bottom, he said.

Free Press said the bill could make it harder for platforms to remove hateful, racist and violent content, given its anti-discrimination provisions. Covered platforms would be barred from “discriminating” against “similarly situated business users,” said Free Press. That could make it difficult, if not impossible, “for covered companies to deplatform and remove from their sites any business that traffics in hateful, racist, violent or otherwise harmful content,” it said.

The “flawed” bill would harm the economy and consumers, said the Computer & Communications Industry Association. “Rather than drafting general rules to protect consumers’ welfare, the bill regulates the business models of a handful of companies,” said President Matt Schruers. “This bill is European-style industrial policy, not competition policy.”

The measure is a good example of why politics “has no place in antitrust,” said NetChoice Vice President Carl Szabo: “It criminalizes businesses to curry political favor, not to protect American consumers, in a way that violates the principles of fairness and equal protection.” Consumer Reports said the bill is a good starting point: “Consumers are at a disadvantage because they lack meaningful choices, allowing these giant online platforms to shape marketplaces without due care for consumers.”