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Senate Judiciary Panel Clears Tech-Focused Antitrust Bill

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(Bloomberg) -- The Senate Judiciary Committee on Thursday approved an antitrust bill aimed at Apple Inc., Meta Platforms Inc., Amazon.com Inc. and Alphabet Inc.’s Google, bringing the measure one step closer to consideration by the full Senate.

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The bill, S. 2992, sponsored by Minnesota Democrat Amy Klobuchar and Iowa Republican Chuck Grassley, would prohibit covered platforms from giving an advantage to their own products on their platforms. Smaller competitors have said these so-called gatekeeper companies use unfair business practices to maintain their dominance.

Klobuchar, who also chairs the panel’s antitrust subcommittee, said she and Grassley are working to build enough support among Democrats and Republicans to reach the 60-vote threshold needed to pass in the full Senate. She said she has kept Majority Leader Chuck Schumer apprised of the bill’s progress and will work with him and other Democratic leaders to get the measure to the floor.

“I’ve shown that I’m practical about this bill,” Klobuchar said in a phone interview after the vote, describing how the bill could move on its own or packaged with other legislation. “There are a lot of things out there that could be put together to get this passed.”

The 16-6 committee vote in favor of the bill demonstrated bipartisan support for the measure. Some senators, however, expressed concern about the bill’s national security implications and the criteria to determine which companies would be considered a covered platform.

One of the amendments the committee adopted would address how data is shared with China, companies controlled by China or other foreign adversaries. Another amendment added criteria to the covered platform definition to include companies that have $550 billion in net annual sales or 1 billion worldwide users, which could capture platforms like Bytedance Ltd.’s TikTok.

The bill gives the Federal Trade Commission and the Justice Department the authority to determine which firms would be covered under the criteria. When asked whether the new criteria would apply to Chinese social media giants like TikTok and the properties of Tencent Holdings Ltd., Klobuchar said “we’d have to look at how it applies.”

The affected companies warn that the legislation would hurt U.S. innovation by giving an advantage to foreign competitors, would risk user privacy and security and would damage products enjoyed by consumers. Google has said that the bill could force the company’s search engine to show low quality results and make it harder to find local businesses. Apple has said the bill would put mobile devices at risk by allowing unvetted apps to be downloaded outside Apple’s own app store.

Brian Huseman, Amazon’s vice president of public policy, described the measure as an “ambiguously worded bill with significant unintended consequences” that could hurt the small businesses that reach customers through the company’s retail platform and fulfillment service.

Advocates for the bill described it as a way to level the playing field in the digital economy and create the conditions that will allow new products and innovations to thrive. Andy Yen, the founder and chief executive of privacy-focused Proton Technologies AG, a Google competitor said the committee vote “marks one of many crucial steps toward revitalizing America’s tech sector and maximizing choice for consumers.”

Barry Lynn, head of anti-monopoly group Open Markets Institute, cast the bill as a way to address “the great economic threat of our time” from the control that big technology companies have over “the critical infrastructure of American commerce and communications.”

The House Judiciary Committee approved a similar bill in June last year, giving this measure more momentum than other proposals aimed to curb what some lawmakers describe as anti-competitive practices by dominant digital firms. Democratic leaders have not yet given any indication of when the bill could come before the full House and Senate.

President Joe Biden hasn’t taken a public position on the legislation, despite fierce lobbying from the bill’s supporters and opponents. The White House on Wednesday met virtually with some smaller tech companies, including Yelp Inc. and Sonos Inc., who have been strong advocates for the bill.

(Updates with Klobuchar quote in the fourth paragraph)

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