By Dana Mattioli and Ryan Tracy
House lawmakers are preparing to propose bipartisan legislation
that could require Amazon.com Inc. and other technology giants to
effectively split into two companies or shed their private-label
products, according to people familiar with the matter and
documents viewed by The Wall Street Journal.
The bill, which the people said could be announced Friday, could
mandate structural separation of Amazon and other big technology
companies that Congress spent 15 months investigating as part of an
inquiry into the size and power of Big Tech. Another bill that also
could be announced Friday targets the ability of big tech companies
to leverage their online platforms to favor their own products over
Each of the bills has both Republicans and Democrats signed onto
it, with more expected to join once they are announced, according
to a person familiar with the matter.
Called the Ending Platform Monopolies Act, a draft of the
proposed structural separation bill reviewed by the Journal says:
"It shall be unlawful for a covered platform operator to own or
control a line of business, other than the covered platform, when
the covered platform's ownership or control of that line of
business gives rise to an irreconcilable conflict of interest."
That language could change in the bill's final draft.
The proposed legislation would need to be passed by the
Democratic-controlled House as well as the Senate, where it would
likely also need substantial Republican support. While Republicans
are concerned about tech companies' power, many are skeptical about
changing antitrust laws.
The proposed bills are among five bills under consideration that
aim to curb the dominance of tech giants including Apple Inc.,
Facebook Inc. and Alphabet Inc.'s Google in addition to Amazon. The
other bills target issues such as data portability and the ability
of large companies to conduct acquisitions that pose a competitive
The bulk of the legislation is narrowly focused only on big
technology companies. The definitions of 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 trading partner.
Only four companies -- Amazon, Apple, Facebook and Google --
currently meet the parameters laid out in the bills, according to
one of the people, and they are the same companies that Congress
investigated as part of its probe into Big Tech. Walmart Inc., for
instance, operates an online marketplace and has private-label
products, but only has a $392 billion market valuation, so wouldn't
be subject to any of the bills, according to a person familiar with
The Ending Platform Monopolies Act being proposed has been
compared with the banking industry's Glass-Steagall Act, which
separates commercial and investment banking.
Amazon operates one of the world's largest platforms for
third-party sellers to hawk their goods, but also competes against
these vendors with its business selling similar products under an
assortment of its own in-house brands -- often priced below the
items from its third-party sellers.
Congress has said that the platform favors Amazon's own goods at
the detriment to sellers and has rebuked Amazon's use of
third-party data to inform its own line of private-label goods.
Last year, the Journal reported about Amazon employees using the
third-party data of sellers on its website to launch its own
Amazon later opened an investigation into the practice. When
testifying to Congress, Amazon Chief Executive Jeff Bezos said "I
can't guarantee you that that policy has never been violated."
If a structural separation bill were to be passed, Amazon could
have to split its business into two separate websites, one for its
third-party marketplace and one for first party, or divest or shut
down the sale of its own products. Amazon's private-label division
has dozens of brands with 158,000 products. It is also a market
leader on devices such as Kindle eReaders, Amazon Echos, Fire TV
streaming devices, Ring doorbells and a line of wearable
Amazon didn't immediately have comment on the proposed
legislation. In the past, the Seattle company has said that "large
companies are not dominant by definition, and the presumption that
success can only be the result of anti-competitive behavior is
Other proposals circulating on Capitol Hill also aim to change
U.S. antitrust law in response to the perceived dominance of large
Another bill takes aim at self-preferencing, a practice where a
company leverages a dominant platform or exclusive access to data
to advantage other lines of its business, for instance by favoring
its proprietary products or services in search results. It could
affect how Amazon conducts its retail business and Apple's app
Congress has blocked or reversed big companies' expansion
before. Though the separation of investment and commercial banks in
the 1933 Glass-Steagall Act has since been repealed, banks are
still restricted from nonfinancial businesses under the 1956 Bank
Holding Company Act. The 1906 Hepburn Act restrained railroads from
ancillary businesses such as coal mining.
Absent congressional action, technology critics are looking to
federal agencies. Google and Facebook are already fighting
antitrust lawsuits, while Amazon and Apple are under antitrust
investigation. Democrats on the Federal Trade Commission also want
to explore the agency's authority to regulate unfair methods of
competition, although that authority is relatively untested and
could face legal challenges.
All four companies have defended their competitive practices and
said that they operate their products and services to benefit
Google, Facebook and Apple didn't immediately respond to
requests for comment.
Write to Dana Mattioli at email@example.com and Ryan Tracy
(END) Dow Jones Newswires
June 11, 2021 12:04 ET (16:04 GMT)
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