Advocates Call for Antitrust Regulation Overhaul for Digital Age

Consumer Federation of America calls out "abuse of power" by Big Data Platforms

The Consumer Federation of America (CFA) is calling on the U.S. Senate to pass S. 2992, The American Innovation and Choice Online Act. The measure is designed to create a more competitive marketplace for consumers - reducing prices and improving services.

In a statement, CFA highlighted the need for the legislation.

“This is a vitally important piece of legislation,” said Rachel Weintraub, CFA’s Legislative Director and General Counsel, “that addresses the most important competitive problem in the digital communications sector, the abuse of market power by Big Data Platforms, which are precisely defined as “covered entities.”

CFA explains that digital services are "riddled" with anticompetitive practices.

“This bill seeks to reduce or eliminate abuses of market power in digital services that are widely used by consumers but have become riddled with anticompetitive practices that raise consumer costs, lower quality, deny them effective choice to meet their needs, and slow innovation,” Weintraub added. “But, it takes a balanced and cautious approach, which ensures that the platforms will continue to be able to innovate and deliver services if they can effectively compete on the merits with independent developers of applications.” 

CFA added detailed reasons for passage in an issue brief on digital platforms and antitrust regulation.

The report outlines key areas of antitrust law that need updating for the digital age. Specifically:

1) The broad agenda for legislative changes that remains within the antitrust tradition that led the economy to great heights in the “Golden Age of Capitalism.” 

2) Recapturing the goals of competition policy to prevent excessive concentration, which has the benefit of controlling the potential for abuse of political power and influence.

3) Thresholds for review and scrutiny that are lowered and address key challenges confronted by those charged with executing competition policy.  

4) Allowing defendants to show that they merit an exception subject to very stringent conditions.

5) Conflicts of interest and self-preferencing, which are central to the abuse of market power must be controlled. This can be accomplished without undermining the incentive of platforms to innovate and offer higher quality services to the public.   

6) Enhance agency oversight by providing the tools and resources necessary to effectively oversee competition and undertake new responsibilities.

7) Restore effective consumer sovereignty by requiring transparency and ex ante conditions for true consumer choice. 

8) Dual Jurisdiction including antitrust and regulation has been successfully applied to the communications network for over a century. 

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