Draft antitrust legal guidelines by the Democrats might reshape Apple, Amazon, Google, Fb
House Impeachment Manager David Cicilline (D-RI) speaks at the U.S. Capitol in Washington, DC on the second day of the second impeachment trial of former President Donald Trump on February 10, 2021.
Congress.gov via Getty Images
A group of Democrats in the House of Representatives is circulating draft antitrust laws that would force major tech companies to change parts of their business models and restrict large acquisitions, according to copies CNBC received.
While drafts could change significantly before their launch, as currently written, for Apple and Amazon they could require a business model overhaul by limiting their ability to run marketplaces for products and apps while they own their own goods and apps sell in the same stores.
The bills would also make it difficult for these companies, as well as Facebook and Alphabet (the parent company of Google), to complete large mergers, forcing them to make it easier for users to leave their platforms with data intact. CNBC could not immediately know when the drafts would be introduced.
The bills come after a 16-month investigation by the House of Representatives’ subcommittee on antitrust law in the four companies, culminating in a nearly 450-page report by Democrats last fall. While the Republicans on the subcommittee deviated from some of the more extreme proposals made by the Democrats, some agreed with the key findings of the Democratic report on monopoly power and anticompetitive behavior and the need to limit the power of big tech through cartel reform.
The bills do not state whether Republicans support the bills.
What the bills say
In particular, the five discussion drafts would prevent platforms from owning companies that present a conflict of interest, prevent large platforms from preferring their own products over those of competitors who rely on their websites, make it more difficult for large platforms to enter into mergers, registration fees increase raise for acquisitions and mandate channels for users to transfer their data between platforms.
One of Rep. Joe Neguse, D-Colo. sponsored bills, appears to be an accompanying bill to the Senate bipartisan merger filing fee modernization bill, passed Tuesday in that chamber as part of a larger technology and manufacturing process worth $ 250 billion. This bill would increase the fees companies pay to notify the Federal Trade Commission and the Justice Department’s Antitrust Division of large mergers with the aim of raising money for these agencies.
The other four drafts CNBC received include:
- Termination of the platform monopoly law: Sponsored by Rep. Pramila Jayapal, D-Wash., Vice chairman of the subcommittee, this bill would make it illegal for a platform with at least 500,000 monthly active US users and a market capitalization of over $ 600 billion to own a company or operate that constitutes a clear conflict of interest. The draft defines an unlawful conflict as one that gives a company an incentive to favor its own services over those of a competitor or to disadvantage potential competitors who use the platform. Legislators have previously raised concerns that both Amazon and Apple, each running their own platforms for sellers and developers, could undermine competition due to a conflict of interest for their own competing products or apps.
- Platform competition and opportunities law: This proposal by Rep. Hakeem Jeffries, DN.Y., would shift the burden of proof in merger cases to dominant platforms (defined by the same criteria as the previous bill) to prove that their acquisitions were indeed legitimate, rather than on the government Having to prove that they reduce competition. The move would likely slow down acquisitions by dominant technology companies significantly.
- Platform antimonopoly law: This law, proposed by Subcommittee Chairman David Cicilline, DR.I., would prohibit dominant platforms from providing their own products and services with advantages over those of their competitors on the platform. It would also prohibit other types of discriminatory behavior by dominant platforms, e.g. their own competing products, along with several other prohibitions.
- Increase in compatibility and competition through the Enabling Service Switching (ACCESS) Act: This bill by MP Mary Gay Scanlon, D-Pa., Would require dominant platforms to adhere to certain standards of data portability and interoperability, making it easier for consumers to take their data with them to other platforms.
Representatives of these legislators did not respond or comment on the draft discussions.
Axios first reported on the designs.
Subscribe to CNBC on YouTube.
WATCH: Big Tech could be scrutinized even more closely for antitrust and monopoly issues in 2021 – here’s why