Small Businesses Face Antitrust Laws – InsideSources

Senate Majority Leader Chuck Schumer is working with Sen. Amy Klobuchar to get her antitrust bill — the American Innovation and Choice Online Act — for a vote sometime this summer. The draft law is aimed at companies that operate online platforms and marketplaces because they have reached a certain size – without any evidence of anti-competitive behavior or consumer harm.

However, economists have noted that the legislation could be disastrous for small businesses and consumers.

After struggling to garner support, Klobuchar released a revised version of the bill in May to address significant concerns her peers raised during January’s Senate Judiciary markup. Klobuchar has claimed that the bill will “level the playing field for small businesses and benefit consumers”. But neither she nor the other proponents of the legislation have conducted any meaningful economic analysis to back up these claims.

Instead, a recent study by NERA Economics Consulting shows these bills will cost the economy as much as $319 billion. When companies like Google, Meta, Facebook, Amazon, and Microsoft are forced to “structurally separate” or dissolve, they will inevitably face increased operating costs to meet bills — forcing them to raise prices to stay profitable . Many of those costs would be borne by small and medium-sized businesses in the form of higher prices or the elimination of free services like Amazon Prime’s two-day delivery, Google Search’s built-in Google Maps and Google Workspace options. These tools aren’t just handy; They enable small and medium-sized businesses to reach millions of consumers cost-effectively.

The NERA report also warned that the law would affect at least 13 other companies already close to the proposed size thresholds over the next five to 10 years, including Visa, JPMorgan Chase, Mastercard, Bank of America, Comcast and AT&T. Thanks to Klobuchar’s new overhauls, however, these companies can breathe easy for the time being. The latest version of the bill specifically exempts big banks, credit card and telecom companies – targeting Amazon, Google, Meta and Facebook.

This is not the first step of this kind of klobuchar. Last year, she introduced a competition law that exempted Target — which happens to be headquartered in Klobuchar’s home state of Minnesota.

If the law is passed, foreign companies will be the real winners, especially in countries like China and Russia. The legislation is aimed at domestic companies with only tens of millions of American users. Nevertheless, it only affects foreign platforms when they have more than 1 billion users. This means that a US company could be forced into liquidation while a foreign company nearly 20 times its size would not – ultimately affecting jobs, market share and competitiveness in the US.

Why is Senate leadership not standing firm on American innovators, workers and entrepreneurs? Consumers and businesses cannot afford the unintended consequences of ill-conceived legislation as they grapple with skyrocketing energy costs, historically high inflation and a COVID recovery. Lawmakers in Washington need to focus on solving the real problems facing Americans, rather than wasting time inventing new problems that threaten our economy. Small Businesses Face Antitrust Laws – InsideSources

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