With the out of control price of groceries, gas, and the rumblings of a coming recession, the last thing we need from Congress is a new regulation that will destroy cost saving digital services like Amazon Prime. Unfortunately for our wallets, the misleadingly named American Innovation and Choice Online Act would do just that — adding fuel to the inflation spiral and undermining the convenient online services consumers choose and rely on each day.
The push for this misguided legislation in an election year shows that anti-tech mania has infected both sides of the aisle. In reality, voters in both parties overwhelmingly agree that the issue that concerns them most is inflation, yet Democrats are making the baffling choice to attack the companies that provide immense cost savings and keep local businesses afloat in tough economic times. Republicans too have been bit by the anti-tech populist bug. No matter how they think Silicon Valley platforms treat right-leaning voices, they should be ideologically opposed to such an anti-market and anti-consumer piece of legislation.
A recent survey from the American Consumer Institute where I serve as president and CEO found that 97 percent of Amazon customers are either somewhat or very satisfied with Amazon Prime services. Consumers in the report say they enjoy the affordable prices and convenient shipping provided by online marketplaces. Amazon’s ranked results allow shoppers to easily find lower-priced goods from reputable sellers, but this convenient tool would be labeled anticompetitive and illegal if Congress has its way.
The same services that benefit consumers also help small businesses reach these very shoppers through web stores, online marketplaces, business listings, and social media advertising. Not only do some small businesses use tech platforms to sell and market their goods, but they also rely on the integrated services provided by these companies, such as warehousing and shipping. Recent research from the Data Catalyst Institute shows that 90 percent of small rural businesses find these tools valuable to their operations. Online platforms were essential for small business survival during COVID and will remain crucial as we continue an accelerated transition to a more digital economy.
Indeed, these services would be in danger if this ill-advised bill passes, depriving small businesses of the reach and scale that online channels provide. Dismantling integrated digital services would create a devastating downstream ripple effect with independent sellers and consumers taking collateral damage. Punishing America’s most innovative companies for the crime of being successful would also serve to punish the millions of small businesses and their customers that rely on them for savings and convenience.
To add insult to injury, the bill also contains a provision that would require Amazon, Facebook, Google, and other large tech companies to share customer data with third-party vendors. This means that your billing profile, name, address, and other personal information could be shared with malicious entities located in hostile jurisdictions. Don’t believe me? Just take a look at Sec. 3(a)(7). While the bill contains a provision that allows platforms to withhold data from falling into the hands of the Chinese government, platforms have no way to determine ownership or uncover which Chinese companies have covert deals with the government. As a result, this legislation will give personal identifiable information to potentially rogue companies, and parties, and will most certainly funnel consumer data onto the dark web.
If Senate Majority Leader Chuck Schumer (D-N.Y.) brings the American Innovation and Choice Online Act to a vote, there is a real possibility that the online selling and shopping experience could go up in smoke before the end of the summer. As gas prices soar 60% higher in New York and elsewhere and supermarket receipts reach historic heights, increasing by more than 11% — the largest over-the-year spike in 43 years — why is the Senate so interested in tinkering with free Google Maps and WhatsApp messaging, free Amazon Prime delivery and Prime Video, and the free Facebook social media app?
While lawmakers are busy trying to undermine data security and destroy services that most consumers enjoy and choose to use, consumers are looking for ways to spend less. Instead of regulating away the services that make our lives easier and more affordable, Congress should be working to ease the pain at the pump, cut energy costs, alleviate supply chain slowdowns, and support local businesses.
Steve Pociask is president and CEO of the American Consumer Institute. While he serves as chair of the FCC’s Consumer Advisory Committee, these comments are solely his own.