U.S. lawmakers are likely to introduce legislation to restrain the market power of Amazon.com Inc., Facebook Inc., Apple Inc. and Alphabet Inc.'s Google LLC unit as early as September but whether a bill would pass by the end of 2020 is unclear, experts say.
Any legislative response would take into account testimony from Amazon CEO Jeff Bezos and the chief executives of Facebook, Apple and Alphabet. They testified virtually before the U.S. House Judiciary Committee's antitrust subcommittee July 29 as part of a more than yearlong investigation into the digital platforms and whether the firms have grown through anti-competitive practices.
Exactly how the Big Tech companies could be restricted and the likelihood of a law passing by the end of 2020 are unknowns, especially in an election year. But experts say there is certainly bipartisan support for legislation that would provide more oversight over the companies' market power at a time when all four firms are growing amid the coronavirus pandemic and economic downturn.
Amazon did not respond to inquiries for this story. The e-commerce company is under antitrust scrutiny for allegedly undercutting small businesses by using data from its third-party sellers to create competitive products.
"You're definitely going to see a lot of laws that are going to come from Congress that are going to attempt to constrain them," said Matt Stoller, director of research at the American Economic Liberties Project in Washington, D.C., in an interview.
Amazon's Seattle campus. Experts say U.S. lawmakers may be gearing up to introduce legislation designed to restrain the market power of the four Big Tech companies and strengthen existing antitrust laws.
Any potential bill is unlikely to focus specifically on Amazon. Still, a proposal could include language to restrict the e-commerce giant's access to data from third-party sellers without using the company's name, Stoller said. Bezos testified July 29 that he could not guarantee Amazon did not violate its policy prohibiting the company from using data from third-party sellers to inform its own private-label products. It was a significant admission given that the percentage of gross merchandise units sold by independent third-party merchants on Amazon's site has grown from 3% in 1999 to 60% in 2019, according to Marketplace Pulse.
Franklin Turner, an attorney with McCarter & English LLP who represents clients including multinational companies, said he was not "terribly surprised" that Bezos was unable to say unequivocally that a particular policy had not been violated. "That said, it would obviously be something that is certainly troubling, and I would expect the company to carefully look at any credible allegations," he said.
Bezos said at the hearing that his company is investigating the issue internally. Amazon did not return inquiries about the timeline of its own internal investigation.
Any potential antitrust legislation in 2020 and beyond could have implications for Amazon. The company has grown from an online bookseller in 1994 to an e-commerce powerhouse with stakes in numerous industries from cloud computing and logistics to Alexa home devices and a growing grocery business that includes Whole Foods Market Inc.
The company continues to grow amid the pandemic as an increasing number of consumers move online. Its sales have grown exponentially over the past decade. Analysts surveyed by S&P Global Market Intelligence expect Amazon's revenue to reach $368.07 billion in 2020 and $432.53 billion in 2021. Amazon's revenue more than doubled between 2015 and 2019.
Possible legislative action
Members of Congress could introduce their own antitrust proposals, or a package of laws, aimed at creating structural changes to the way these companies operate.
Stoller said he expects Cicilline's subcommittee to release a report in September with possible recommendations for bipartisan legislation designed to strengthen antitrust laws. "Enforcers take signals from Congress, and for the last 30, 40 years, the signals they have been getting is, Don't get aggressive," he said. "The enforcers are kind of on the hot seat now." A spokesperson for the office of Rep. David Cicilline, D-R.I., chair of the House Judiciary Committee's antitrust subcommittee, did not respond to inquiries for this story.
The report is also likely to suggest budget enhancements to the U.S. Department of Justice. The department is working on an investigation into Amazon, Google, Apple and Facebook over possible anti-competitive activity. The Federal Trade Commission also has been examining past acquisitions of the Big Tech firms and is investigating Amazon's relationship with third-party sellers.
Lawmakers on both sides of the aisle could also introduce a comprehensive bipartisan bill, called something along the lines of the "Digital Technology Sector Act." Such legislation could include broad language covering privacy issues, access to rival data and acquisitions deemed anti-competitive, said Diana Moss, president of the American Antitrust Institute.
Google has come under scrutiny for allegedly stealing content from businesses and prioritizing its own services. Facebook is facing accusations about its purchase of Instagram LLC as an anti-competitive acquisition. Apple CEO Tim Cook was questioned by lawmakers July 29 about the way Apple handles its App Store.
"I do think Congress is possibly going in the direction of building some bipartisan consensus on new legislation," Moss said in an interview. "These problems are so pervasive with the platforms that a coherent legislative response would really entail setting up some sort of regulatory infrastructure."
But some questioned whether any legislative enforcement action to prevent Amazon from accessing data from third-party sellers would be effective. James Thomson, a former Amazon executive and partner with Buy Box Experts, said in an interview that Amazon would push back against any internal regulatory oversight. "Somebody would have to be within Amazon poking around," Thomson said. "There's no way a big organization is going to let that happen without a big fight."
Pushed to the backburner
Introducing and passing an antitrust bill could be pushed back to 2021 as lawmakers focus on the pandemic response and the reelection of all 435 seats in the U.S. House of Representatives. U.S. President Donald Trump will be contested by presumptive Democratic presidential nominee Joe Biden, who on Aug. 11 announced the selection of Sen. Kamala Harris, D-Calif., as his running mate.
Stoller added that there are a limited number of days where voting can occur on the House floor between now and the Nov. 3 election, which may not be enough time to pass an antitrust law by the end of 2020.
However, an antitrust bill introduced in this legislative cycle could be wrapped into a package considered during the 2021 congressional session, Stoller said.
"It becomes an amalgam of all of these things," he said.