The Critiques Against the American Innovation and Choice Online Act Miss the Mark – ProMarket
In an opinion piece, Yelp’s general counsel Aaron Schur argues that recent criticisms against the bill, which the Senate is expected to vote on, focus on hypothetical, highly unlikely abuses.
It’s summer, and competition reform is in the air. John Oliver dedicated a recent show to tech monopolies, and thousands are calling on legislators to back the bipartisan American Innovation and Choice Online Act (AICOA), which addresses anticompetitive self-preferencing by dominant tech companies. If Senate Majority Leader Chuck Schumer (D-NY) allows voting, AICOA will pass “convincingly.”
But in a summer blockbuster twist, small but vocal groups are trying to derail AICOA by requesting unnecessary changes that would carve out immunity for content moderation by explicitly incorporating defenses under the First Amendment and section 230 of the Communications Decency Act (defenses that would already be available to defendants in any civil action brought under AICOA). Four senators wrote to AICOA-sponsor Amy Klobuchar (D-MN), claiming the bill could “hinder content moderation practices . . . used to remove hate speech and fight misinformation online.” Some law professors assert it “will lead to more hate speech, more disinformation, and more harassment online.” These missives don’t explain how the imagined concerns would materialize, much less outweigh the benefits AICOA would give the public in outlawing anti-competitive self-preferencing by dominant tech companies—a benefit that these critics concede is valuable. Worse, the suggested edits to AICOA are unneeded, politically impossible, weaken existing antitrust enforcement, and incentivize legislators to reduce protections for content moderation.
Theories of potential abuse are deeply flawed. For example, Georgetown professor Anupam Chander and University of Arizona professor Jane Bambauer wrote that AICOA “would hand the makers of services and apps that give free rein to hate speech and disinformation a powerful weapon to use in court . . . .” But AICOA has no private right of action, meaning competitors can’t sue. They’d need to persuade government enforcers to do so.
Any lawsuit would face high hurdles early, halting baseless claims. Federal antitrust lawsuits must allege plausible facts to survive. After the Federal Trade Commission and state attorneys general suing Facebook had their case dismissed last year (for lacking sufficient facts), a new complaint was filed–80 pages of factual allegations. The antitrust complaint filed against Google by the Department of Justice and several states is over 50 pages and is similarly detailed. Given the significant time and costs associated with antitrust actions (California and Texas, strange bedfellows, pool resources against Google), government enforcers have no incentive, time, staff, or funds to pursue meritless cases.
Critics routinely point to AICOA’s section 3(a)(3) as the principal cause for their concern. This section outlaws “discriminat[ion] in the application or enforcement of the terms of service of the covered platform among similarly situated business users in a manner that would materially harm competition.” To survive dismissal, an enforcer would need to allege facts showing a dominant platform (1) discriminated in enforcing its terms among “business users”; (2) those users were “similarly situated”; and (3) competition was materially harmed. “Harm to competition” in antitrust law has special meaning derived from precedent–injury to overall competition in a defined market in a manner that hurts consumers, not merely competitors.
“THE SUGGESTED EDITS TO AICOA ARE UNNEEDED, POLITICALLY IMPOSSIBLE, WEAKEN EXISTING ANTITRUST ENFORCEMENT, AND INCENTIVIZE LEGISLATORS TO REDUCE PROTECTIONS FOR CONTENT MODERATION.”
AICOA is more precise than the Sherman Act, the landmark 19th-century antitrust law. Section 1 of that statute declares that “[e]very contract . . . in restraint of trade or commerce” is illegal. Despite the vagary, for 130 years, courts and enforcers have applied this and other antitrust laws (albeit overly cautiously). This deep foundation of antitrust jurisprudence—thousands of cases—will guide courts in applying AICOA, including determining when businesses are “similarly situated” or competition is materially harmed. Indeed, the Sherman Act’s spartan language is echoed word for word in state antitrust laws, such as the Texas Free Enterprise and Antitrust Act of 1983—if state enforcers wanted to use antitrust laws to target actions taken pursuant to Terms of Service, they would already be doing it.
AICOA could not be meaningfully applied against content moderation practices. That’s speculation that ignores the nature of antitrust enforcement and precedent. It’s telling that critics never walk through the hypothetical scenario they fear. Further, when plaintiffs try to use ill-fitting laws to silence critics, they tend to lose. At Yelp, we’ve faced many such cases under the Fair Labor Standards Act, RICO Act, Sherman Act, and California’s right to publicity statute, among others. These cases targeted content moderation and all failed early. Meritless prosecutions under AICOA would fare no better. At most, there would be a modest increase in the litigation budget of the world’s largest corporations.
Detractors point to the bogeyman of Parler, which filed a Sherman Act claim against Amazon after it cut Parler’s web hosting services while Twitter stayed online. But Parler resoundingly lost, with the judge noting it “failed to do more than raise the specter of preferential treatment of Twitter by AWS,” and Parler and Twitter were not similarly situated. Without evidence of discrimination between similarly situated companies, this claim would have lost under AICOA.
Nonetheless, critics urge legislators to carve out content moderation practices and defenses under the First Amendment and section 230 of the Communications Decency Act (CDA), which protects online platforms from claims related to the speech of others–defenses Yelp routinely uses. Given the political moment and limited time, any serious attempt to inject CDA or make sweeping amendments around content moderation (already contentious topics in Congress) would likely doom it. Edits are also unnecessary–if a court determines enforcement of AICOA in a case violates the First Amendment or CDA, it will dismiss the case. Explicit references could expand the scope of these defenses, chilling antitrust enforcement and spurring renewed efforts to dismantle the CDA and weaken the First Amendment.
Rather than focusing on phantom abuses, legislators should pass AICOA and provide tools to combat real anticompetitive harms.
Disclosure: Yelp is a competitor to Google and a witness in an antitrust lawsuit brought against Google by the US Department of Justice, and several states. The passage of the American Innovation and Choice Online Act could increase the likelihood of additional antitrust proceedings against Google.
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