Senate Action on Big Tech Fees
Every time you make an online purchase, there’s an unseen fee included. It won’t show up on the receipt, and surprisingly, no politician has supported it. Yet, this hidden cost is embedded in almost everything you buy, directly benefiting some of the world’s largest corporations.
This is the issue at hand with Amazon. The Senate has a vital opportunity to change this with the bipartisan American Innovation and Choice Online Act (AICOA).
When Amazon started its marketplace, independent sellers faced about 19 cents taken from each dollar they earned. Now, this figure has nearly doubled. Sellers encounter various charges, from listing fees to advertising costs, and penalties crop up if they dare to offer better prices elsewhere. Small business owners in states like Ohio and Arizona report paying around 45 to 50 cents on the dollar just to connect with customers that Amazon dominates.
The sellers can’t absorb these costs, so they raise prices. Amazon penalizes those who price lower on competing platforms, often burying their listings in search results. Consequently, products generally see inflated prices across all sites, whether shoppers are using Amazon or not. This creates an invisible toll that effectively raises expenses for everyday items.
The situation is compounded further, as Amazon’s marketplace includes sellers shipping inexpensive goods from overseas, sidestepping safety regulations and taxes that American businesses must adhere to. Local family-owned shops are struggling to compete with foreign entities that don’t follow the same rules. Amazon’s search results often channel buyers toward these cheaper listings, which benefit the company financially, regardless of who sells them. Meanwhile, American families are caught in the middle.
Moreover, conservatives have pointed out the other side of Amazon—a company that has censored books based on political leanings. The selection is often influenced by changing elite preferences, making the marketplace feel less neutral and more like a gatekeeper with its own biases.
This week, Iowa Senator Chuck Grassley reintroduced AICOA. The premise is straightforward: if you run a marketplace, you shouldn’t manipulate it for your gain. AICOA aims to prevent major tech platforms from disadvantaging competitors, forcing unfair prices, and using their dominance to stifle smaller entities. This could restore competition and reduce prices, giving smaller players a better chance.
AICOA is just one part of a broader effort. Two additional bills have also been put forth in the Senate Judiciary Committee, designed to work alongside AICOA.
The Open App Market Act targets major players like Apple and Google, who take a significant cut from app purchases and subscriptions. It likens their control to a landlord confiscating a third of a store’s sales while prohibiting shopping elsewhere—an unbalanced scenario for app users.
U.S. laws are also addressing Google’s practices in digital advertising, where it controls both the auction and the marketplace. Consequently, businesses must pay inflated advertising costs, which, in turn, leads to higher prices for consumers. Correcting these conflicts of interest could redirect funds back to local economies.
The objective remains clear with the three bills: end gatekeeping that imposes undue costs on the economy.
AICOA has gained bipartisan support from over 100 organizations, ranging from conservative advocates to consumer rights groups. It’s an issue that resonates widely with an increasingly frustrated public.
Lobbyists are sure to push back, arguing that regulating these giants might benefit competitors overseas or harm innovation. But, it’s worth remembering: every monopoly throughout American history has claimed that competition would ruin everything until it proved otherwise.
New startups are also rising to challenge big tech, demonstrating that real competition fosters innovation, while monopolies often stifle it. As competition thrives, so does progress, and allowing American entrepreneurs to flourish is essential for the nation’s success.
The Senate Judiciary Committee should prioritize these bills with no delays. Americans have had enough of footing the bill for corporations that prioritize their interests over public welfare.
It’s time to remove these barriers and revitalize competition in the marketplace.
