Democrats Laid A Trap In One Key Bill. Will Republicans Walk Into It?
A fatally wounded bear can eat you. A drowning man can drag you down with him. A dying bull can gore a matador.
And the failing and flailing Biden Administration and Democrat-controlled Congress can still draw blood between now and when they lose the House and Senate in November. But only if Republicans throw them a lifeline.
Democrat Senate leader Chuck Schumer’s best chance to trick conservatives and Republicans into giving his left-wing activists a huge victory is Sen. Amy Klobuchar’s “antitrust” regulation bill that has fooled some conservatives into thinking this would reduce (rather than increase) censorship of conservatives online.
The Klobuchar bill is a big government power grab and one of the biggest regulatory threats of Biden’s agenda. The bill would give Biden bureaucrats sweeping new power to reshape the economy in the service of left-wing social goals.
No Republican should vote to hand Democrats this last-minute legislative victory. The Klobuchar bill is bad policy, bad politics, and will exacerbate inflationary pressure on American families.
Klobuchar’s “American Innovation and Choice Online Act” (S. 2992) would ban online companies over a government-determined threshold from engaging in “self-preferencing,” where a company sells or promotes private-label products on their own platforms. Grocery stores do this all the time when they sell generic cereal that is cheaper than the name brands. In theory, this legislation is the online equivalent of a bureaucrat hauling a dumpster to Costco and demanding they stop selling and throw away every Kirkland product in the store.
Supporters promise the bill will only apply to companies with $550 billion in revenue and 50 million monthly users … for now. This opens the door for future government regulation based on the size of a company, a government cap on innovation and a one-way ratchet that Democrats control to trap more companies under the heavy hand of bureaucratic control.
If a bureaucrat determines that a company violates any part of this legislation, the government can swoop in and fine the company up to 15% of revenue. For retailers that operate with razor-thin margins, this fine could easily be twice as large as profits.
Currently, the bill targets about four or five of America’s largest technology companies: Amazon, Apple, Alphabet (Google), Meta (Facebook), and Microsoft. The practical effect of this legislation would be to break the services offered by these companies.
As written, Amazon would no longer be able to offer free two-day shipping or sell products with the Prime badge. Google would no longer be able to offer Maps directions or restaurant reviews when searched. Apple could no longer preload apps onto their devices, making your new iPhone virtually useless out of the box.
Generic private-label products are often cheaper than the name brands, but S. 2992 would make it virtually impossible for targeted companies to sell them. Shoppers looking to squeeze a few more bucks out of their budgets would no longer have the option to buy generic, increasing inflation’s pernicious effects on American families.
Several Republican lawmakers have endorsed the Klobuchar bill, likely in response to legitimate conservative anger at Big Tech censorship online. But S. 2992 does nothing to end censorship, on the contrary, Democrats have consistently called for more censorship. Twitter, the left’s favorite place to target and censor conservatives, wouldn’t be impacted. Meta is nearly too small to be impacted.
This bill will worsen Big Tech and big government abuse of conservatives. If Big Tech has to run and ask Biden bureaucrats for permission to conduct routine business activity, conservatives can easily envision a scenario where censorship gets worse.
Instead of running with a Democrat-led approach, Republicans should wait until they have the majority and can work on legislation that won’t make conservatives worse off.
While the policy is bad enough, the politics may be even worse. As American families grapple with inflation, record-high gas prices and a Biden-induced baby formula shortage, support for tech regulation is plummeting.
According to a recent Pew Research poll, just 44% of Americans think major technology companies need additional regulation, down from 56% in April 2021. At least 35% of conservative Republicans think tech companies need more regulation, down from 59% in 2021. A coalition of 35 free-market groups and activists including Americans for Tax Reform recently released a letter opposed to the Klobuchar bill.
The Klobuchar bill is fraught with problems and will backfire on conservatives. While sponsors sell the bill as a slice of pepperoni pizza, conservatives should know that there are shards of glass underneath the cheese.
Republican lawmakers should feel no need to give the Democrats credit for taking on Big Tech or give Klobuchar a phony accomplishment to tout in her 2024 presidential campaign.
Grover Norquist is the president of Americans for Tax Reform.
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