What’s the deal with the American Innovation and Choice Online Act?

September 13, 2022

The American Innovation and Choice Online Act, S.2992, is a bipartisan bill aimed at big tech companies like Amazon who have limited consumer choice online. According to the Congressional Research Service, this bill “prohibits certain large online platforms from engaging in specified acts, including giving preference to their own products on the platform, unfairly limiting the availability on the platform of competing products from another business, or discriminating in the application or enforcement of the platform’s terms of service among similarly situated users.”

Here’s Why NAW Is Supporting This Bill:

  • Amazon has a history of taking data from third-party sellers on their platform and then using this data to create their own product which features prominently in search results.
    • This has a direct impact on our members and other small businesses. Their products no longer show up prominently in search results, so they lose out on revenue and are essentially punished for being successful.
  • Amazon is creating a blatantly unfair marketplace that eliminates competition.
    • When competition is removed, prices go up and that has a direct impact on the consumer, not to mention the small businesses who are penalized because they can’t compete with the giant that is Amazon.
  • Amazon bullies their third-party sellers. Many sellers no longer view Amazon as a partner, but rather as the typical playground bully who is taking their lunch money. They force them to accept unfair terms or conditions and are threatened with removal from the marketplace if they do not accept.
    • Amazon imposes strict terms, fees and conditions on its third-party sellers, but even after agreeing to the terms and conditions, a seller can be de-listed if Amazon produces a private label product that competes with the item. 
  • Amazon is reaching into every single aspect of American life. It feel like we are living in the United States of Amazon.
    • Amazon has purchased grocery stores, health care systems, and more. What’s next? Yet again, there is a risk involved when an economy becomes too reliant on one company.

Here Is What The Bill Does NOT Do:

  • The bill does not break up Amazon nor does it prohibit them from selling their own products. It would prohibit them from giving preferential treatment to their own products, and even that isn’t automatic.
  • The bill does not give third-party sellers a windfall or special advantage. It is all about restoring a level playing field for businesses to compete on the Amazon marketplace.

We urge Congress to pass the American Innovation and Choice Online Act to restore fair economic competition and protect Main Street. Learn more at https://www.naw.org/supportmainstreet/