A small business owner in Brooklyn first came to understand what predatory pricing meant in 2014 when customers started walking into her kitchenware shop and asking why prices for select items — mostly KitchenAid electrics — were higher than those advertised on Amazon.
What she wanted to tell them was that not only was the store’s price following the minimum advertised price (MAP) set by KitchenAid — prices that netted them only a small margin — but that Amazon’s retail prices were often below the wholesale cost itself.
Does This Scenario Sound Familiar?
This scenario might change if lawmakers in Congress pass a package of six bipartisan bills aimed atrestoring competition to the digital marketplace and rein in the largest tech platforms including Amazon, Google, Facebook and Apple.
Making this happen won’t be a small feat but there is growing support by retailers across the country and legislators who are recognizing how catastrophic not doing something will be for our economy and communities.
“Right now, unregulated tech monopolies have too much power over our economy,” Chairman of the House Judiciary Subcommittee on Antitrust David N. Cicilline, a Democrat from Rhode Island, said in a press release. “They are in a unique position to pick winners and losers, destroy small businesses, raise prices on consumers, and put folks out of work. Our agenda will level the playing field and ensure the wealthiest, most powerful tech monopolies play by the same rules as the rest of us.”
The bills garnered support from both sides of the aisle, with many Republicans joining their Democratic colleagues to express their support. “Big Tech has abused its dominance in the marketplace to crush competitors, censor speech, and control how we see and understand the world,” Representative Ken Buck, a Republican from Colorado, said in the press release. “Apple, Amazon, Facebook, and Google have prioritized power over innovation and harmed American businesses and consumers in the process. These companies have maintained monopoly power in the online marketplace by using a variety of anticompetitive behaviors to stifle competition. Doing nothing is not an option, we must act now.”
“A Stronger Online Economy: Opportunity, Innovation, Choice” package features six bills, four of which are of particular importance to small and independent retailers:
The American Choice and Innovation Online Act The bill will ensure that small and independent businesses can compete on fair terms on the big tech monopoly platforms. It will bar the tech giants from forcing small businesses to buy services or products in exchange for access to or preferential placement on their platforms, and from spying on their users and scraping their data in order to make and sell their own competing products. The bill will prevent the big tech monopolies from gouging small businesses with sky-high tolls they charge in exchange for placement on their platforms — fees that inevitably drive up the cost of goods and services to consumers. The bill will also ensure customers are seeing the best, most high-quality results when searching online, rather than seeing the goods and services the tech monopolies want its users to see.
The Platform Competition and Opportunity Act Includes some important provisions to protect third-party sellers like independent retailers and other businesses from predatory behavior by Amazon and the other dominant platforms.
- The Ending Platform Monopolies Act — Federal legislation unveiled in June would create a competitive online market by barring the Big Tech companies from owning both a dominant online platform (a “covered platform”) and a line of business that sells products or services on the platform. This would, for example, require Amazon to spin off its retail and product division into a separate company from its online marketplace.
- The Merger Filing Fee Modernization Act — Creates a high hurdle that the four tech giants must overcome to be allowed to acquire other companies. This bill could block many or most acquisitions.
Small Business Rising Is a coalition of over 20 national and local associations representing over 150,000 small and independent businesses nationwide. Its members include booksellers, apparel and gift shop owners and fair-trade businesses as well as national trade associations such as the American Booksellers Association, American Specialty Toy Retailing Association, Local First and Main Street Alliance.
Visit www.smallbusinessrising.net to learn about how to get involved and to learn more about what’s happening on Capitol Hill and how it might affect you, your community and your business.