Amazon and other tech giants could be forced to divest assets under internal bill – –

Amazon and other tech giants could be forced to divest assets under internal bill – –

House lawmakers prepare to propose bipartisan legislation that could force Amazon.

The bill, which people say could be announced on Friday, could force a structural separation of Amazon and other big tech companies that Congress has spent 15 months investigating as part of an investigation into the size and power of Big Tech. Another bill that could also be announced on Friday targets the ability of large tech companies to leverage their online platforms to favor their own products over their competitors.

Each of the bills has signed both Republicans and Democrats, with more expected to accede when announced, according to a person familiar with the matter.
Called the Ending Platform Monopolies Act, a draft Structural Separation Bill reviewed by the Journal states: “It will be illegal for a covered platform operator to own or control any line of business, other than ownership or control of this sector of activity gives rise to an irreconcilable conflict of interest. This language could change in the final version of the bill.

The bill is expected to pass the Democratic-controlled House as well as the Senate, where it would likely need substantial Republican support as well. While Republicans are concerned about the power of tech companies, many are skeptical about changing antitrust laws.

The proposed bills are among five bills under consideration that seek to curb the dominance of tech giants, including Apple. Inc.,

AAPL 0,82%

Facebook Inc.

FB -0,69%

and alphabet Inc.

GOOG -0,32%

Google in addition to Amazon. The remaining bills target issues such as data portability and the ability of large companies to make acquisitions that pose a competitive threat.

Most of the legislation focuses only on large tech companies. The definitions of the companies targeted by the bills state that they must have a market capitalization of $ 600 billion or more, must have more than 500,000 active monthly users, and must be a critical business partner.

Only four companies – Amazon, Apple, Facebook and Google – currently meet the parameters set out in the bills, according to one of the people, and these are the same companies that Congress investigated in its Big Tech investigation. . Walmart Inc.,

WMT 0,24%

for example, operates an online marketplace and offers private label products, but only has a market valuation of $ 392 billion, so would not be subject to any of the bills, according to a person familiar with the matter.

The proposed Ending Platform Monopolies Act has been compared to the Glass-Steagall Act of the banking sector, which separates commercial banking from investment banking.

Amazon operates one of the largest platforms in the world for third-party sellers to sell their products, but also competes with these sellers, with its business selling similar products under an assortment of its own internal brands, often to third-party vendors. prices lower than those of its third parties. party vendors.

Congress said the platform promotes Amazon’s own products to the detriment of sellers and berated Amazon’s use of third-party data to inform its own private label product line. Last year, the Journal reported that Amazon employees were using third-party data from sellers on its website to launch its own private label lines, violating an internal policy.

Amazon then opened an investigation into this practice. In his testimony to Congress, Amazon CEO Jeff Bezos said, “I cannot guarantee you that this policy has never been violated.

If a structural separation bill were to pass, Amazon may have to split its business into two separate websites, one for its third-party market and one for the first-third, or divest or stop selling its own products. Amazon’s private label division has dozens of brands with 158,000 products. It is also a market leader in devices such as Kindle e-readers, Amazon Echos, Fire TV streaming devices, Ring doorbells and a range of portable devices.

Amazon did not immediately comment on the bill. In the past, the Seattle-based company has stated that “large corporations are not dominant by definition, and the presumption that success can only be the result of anti-competitive behavior is simply false.”

Other proposals circulating on Capitol Hill also seek to change US antitrust law in response to the perceived dominance of big tech companies.

Another bill targets self-preference, a practice whereby a company leverages a dominant platform or exclusive access to data to benefit other areas of its business, for example by promoting its exclusive products or services in search results. This could affect the way Amazon conducts its retail business and Apple’s app store.

Congress has already blocked or canceled big business expansion. Although the separation of investment banks and commercial banks in the Glass-Steagall Act of 1933 has since been repealed, banks are still prohibited from non-financial activities under the Bank Holding Company Act of 1956. The Hepburn Act of 1956 1906 prohibits the railways from ancillary activities such as coal mining.

In the absence of congressional action, tech critics are turning to federal agencies. Google and Facebook are already battling antitrust lawsuits, while Amazon and Apple are under antitrust investigation. Democrats at the Federal Trade Commission are also keen to explore the agency’s authority to regulate unfair competition methods, although that authority is relatively untested and could face legal challenges.

All four companies have defended their competitive practices and said they operate their products and services for the benefit of customers.

Google, Facebook and Apple did not immediately respond to requests for comment.

Write to Dana Mattioli à [email protected] and Ryan Tracy at [email protected]

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