WASHINGTON EXAMINER: Big Government's Tech War on the Little Guy

The American Innovation and Choice Online Act is aptly named in that the proposed legislation would hamper innovation in small businesses and freedom of choice for consumers.

The bill has bipartisan representation with 11 co-sponsors from Sens. Amy Klobuchar and Cory Booker to Sens. Chuck Grassley and Lindsey Graham. Supporters claim the act, in conjunction with the Open App Markets Act, will rein in Big Tech in the name of consumer protection and antitrust. However, an equally diverse chorus of critics is warning that these bills, though they sound altruistic, are actually weapons in an escalating war on freedoms.

The American Innovation and Choice Online Act threatens to grow government power over the tech industry in unprecedented ways, and though Klobuchar has aimed the bill at Amazon, the tech giant won’t be the only one to suffer at the hands of big government. It’ll also crush the little guy.

Take it from Kerry Mellin, the founder and co-owner of EazyHold. After a 35-year career in costume design, Mellin created grip aids to help people age gracefully and remain active. Her simple silicone device has become a staple in therapy centers across the country. I recently had the opportunity to interview her about her business.

Mellin has been navigating the world of e-commerce since 2016. “With Amazon’s good name, we were confident that we could grow our business,” she said, “and we have.”

Mellin, along with two other small-business owners, recently appeared in front of the U.S. Senate Judiciary Committee and penned a letter of protest against the American Innovation and Choice Online Act, which is now published on Amazon’s website.

The bill states that covered platforms cannot “unfairly preference” their “own products, services, or lines of business over those of another business user on the covered platform in a manner that would materially harm competition.” Because Prime is Amazon’s own service, this would prevent it from displaying the Prime badge on products from companies big and small.

Mellin put it simply: “This is deadly.”

Another of Mellin’s concerns stems from a provision that prohibits Amazon from financing expedited shipping through Fulfillment By Amazon merchant fees, making free two-day shipping nearly impossible. The bill would undo the linchpin between Fulfillment By Amazon and Prime, which allows small businesses the ability to compete with companies that have millions of units available at places such as Walmart and Target.

The Open App Markets Act is more concerning, presenting a new slew of cybersecurity problems for little guys and tech bros alike. The bill would stop a dominant platform from “preventing another business's product or service from interoperating.” Side-loading mandates would force closed ecosystems, such as Apple’s iOS, to allow access to third-party apps in their app stores. While politicians say that this builds in a backdoor for competition, it also allows applications from open ecosystems to bypass the strict technical and security requirements set by Apple. This revision to Apple’s policy opens the door to viruses and cyberattacks that it had all but eradicated.

Even before these potential added security risks, small businesses were faced with a double-edged sword: spend up to 14% of their annual IT budget on cybersecurity or risk a security breach, the average cost of which is $25,000. Any added costs have the power to bankrupt.

What is framed as “pro-consumer” in theory is “anti-consumer” in practice.

Despite public outcry, the Senate Judiciary Committee voted 16-6 to advance the bill to the full Senate, where Klobuchar and her co-sponsors are attempting to cram it through. Bureaucrats and elected officials are left to define the legislation’s many vagaries without a public hearing.

Though taking down Goliath may feel like a long shot for the little guys, Mellin and her peers are taking aim. “We urge you to join with us and contact your Senators to oppose these bills,” say the small-business signers of Amazon’s protest letter. “Our businesses are our livelihoods, and we feel that Congress has failed to understand the collateral damage these bills could cause.”

Throw enough stones, and the giant just might fall.

Published in the Washington Examiner, January 31st, 2022

Image: Elizabeth Frantz-Pool/Getty Images