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Antitrust 12/17/2021

How Antitrust Proposals Stole Christmas

Zach Lilly
Zach Lilly Deputy Director of State and Federal Affairs

Santa is going to have to request overtime this year. While the Big Man has never had any trouble pulling his own weight, Congress appears to be working hard to make his job as difficult as possible. A small, bipartisan group of Senators are toiling away, like South Pole elves, to make sure your holiday packages arrive late, cost you more money, and are a greater risk to your family’s health and safety.

This holiday season, when you might reasonably expect to see gifts under your Christmas tree, Senator Klobuchar is wrapping up an “antitrust” bill, The American Innovation and Choice Online Act instead. What she hopes the bill will do is target and punish popular e-commerce companies that she thinks are hurting small brick-and-mortar businesses.

The bill would, in effect, kill popular services like Amazon Prime. While that is a huge blow for e-commerce platforms, it’s a death-knell for the mostly medium and small sellers that use those platforms to reach their customers.

Take, for example, how Americans already have to deal with historically high rates of inflation this holiday season. Because we are spending more money on necessities like gas and groceries, we have less left over to spend on our loved ones. Add global supply chain issues, and we can often expect to pay more and wait longer for our gifts. Enter Senator Klobuchar who wants to add one more lousy layer to this antitrust fruitcake. By blowing up services like Amazon Prime, millions of businesses won’t be able to tap into the infrastructure of larger companies – making our supply chain woes even worse and goods more expensive. Hopefully you like opening Christmas gifts in February. Apparently Senator Klobuchar does.

Senator Klobuchar’s bill makes the holidays more expensive and more challenging, but it also makes them a lot less safe. E-commerce platforms dedicate countless hours and billions of dollars a year to policing their sites for dangerous, counterfeit, and illegal material. But thanks to the American Innovation and Choice Online Act, companies would overnight be forced to either turn a blind eye to dangerous practices on their platforms or be forced to defend themselves, in court, from hundreds if not thousands of complaints – any one of which could result in a massive penalty of 15% of the business’ revenue. This seems like an extraordinary oversight but that’s exactly what politically motivated efforts get you: bad policy.

Senator Klobuchar, I think, has good intentions in mind. And I wouldn’t put her on the naughty list just yet. What she wants to do is help small businesses thrive, especially brick and mortar stores. The reality is, those businesses don’t need her help. As the Wall Street Journal has recently reported, much of retail success is being driven by in-store shoppers. As I have written about previously, Americans don’t think of shopping as either online or in-store. They see retail as a way to get what they need, when and where they need it.

Regardless of intention, the American Innovation and Choice Online Act creates a problem where none exists and seeks to do it at a time that is precious to millions of Americans.

While Christmas is a terrible time for bad legislation, it’s the perfect time for a change of heart. Let’s hope Senator Klobuchar comes to her senses and lets us celebrate the holidays in peace.

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