Amazon is fighting back against a bill making its way through Congress, one that would prevent tech companies from favoring their own products and services.
The American Innovation and Choice Online Act was introduced by Senators Amy Klobuchar, Chuck Grassley, and John Kennedy, and has a companion bill making its way through the House, sponsored by Representative David Cicilline. A key element of the bill is a prohibition against companies favoring their own services. In a blog post, however, Amazon says the bill unfairly targets it.
In particular, Amazon says its Amazon Prime service would be one of the biggest casualties. Despite investing some $100 billion in building out its infrastructure to support Prime’s one to two-day delivery, the new bill would force Amazon to open up Prime to third-party logistic providers, allowing them to fulfill orders.
Read more: Amazon Warning Sellers About Congress’ Antitrust Efforts
Amazon outlines the issues in its blog post:
Such a mandate would make it difficult, and potentially impossible in practice, for Amazon and our selling partners to offer products with Prime’s free two-day shipping (let alone one-day). We’ve tried allowing our selling partners to use other logistics providers to get Prime-eligible products to customers; unfortunately, these providers were not able to consistently deliver in the timeframes Prime customers have come to expect (meeting our “delivery promise” is something we measure and monitor extremely closely). Were this legislation to become law, it would substantially degrade the value and quality of Prime, as many of the products sold in our store today with Prime’s one- to two-day delivery promise would be undeliverable in that time frame.
Amazon makes the case that degrading its marketplace, including its Prime service, would hurt countless small businesses that have built their livelihood around selling on Amazon.
Amazon also believes the bill is specifically target it, while excluding its rivals:
Oddly, and inappropriately, this legislation is targeted at only one U.S. retailer—Amazon. This has been accomplished by requiring a market value of at least $550 billion to qualify for regulation. We don’t believe this threshold to be unintentional; but rather, targeted and intentional. In 2021, Walmart had annual revenues of $559 billion, nearly $90 billion more than Amazon. CVS had annual revenues of $292 billion; Costco, $196 billion; and Target, $106 billion. But Walmart is excluded despite also being a large retailer that allows small businesses to sell in its online marketplace. Similarly, Target, which is headquartered in Sen. Klobuchar’s home state of Minnesota, is excluded even though it too operates an online marketplace for sellers. And CVS, which is headquartered in Rep. Cicilline’s home state of Rhode Island, is excluded despite being one of the U.S.’s largest retailers, largest health insurance companies, and largest pharmacy benefit managers, all at the same time.
Amazon’s argument regarding Walmart is further boosted by the fact that the latter company has unveiled its Walmart+ Weekend, it’s own take on Amazon’s Prime Day, further blurring the line between brick-and-mortar retailer and e-commerce giant.
Interestingly, Amazon isn’t the only entity to come out against the bill. In fact, the Independent Women’s Voice group expressed concern over the bill, echoing some of Amazon’s own arguments:
“The days of innovative services making it easier to live, work, and do business, especially during a pandemic, could be numbered if the American Innovation and Choice Online Act passes the full Senate,” said Patrice Onwuka, a senior policy analyst at Independent Women’s Voice, in a statement to WPN. “Today’s affirmative committee vote is very troubling because this bill is not about protecting competition in America, but expanding regulatory control over a handful of large tech corporations, even if to the detriment of consumers.”
Lawmakers have been turning an increasingly critical eye toward Big Tech, making bills like the American Innovation and Choice Online Act an unsurprising development. As Amazon points out, however, if the bill is to succeed, it will need to apply to companies fairly and equitably. If the bill does unfairly target a single company, it could face substantial legal challenges.
