Center for American Entrepreneurship Urges Policymakers to Proceed Carefully Regarding the American Innovation and Choice Online Act, Citing Risk of Unintended Consequences

October 19, 2021

For Immediate Release
3 minutes

WASHINGTON, D.C. – John R. Dearie, President of the Center for American Entrepreneurship, today issued the following statement regarding the introduction of the American Innovation and Choice Online Act:

“On October 18, 2021, members of the Senate Judiciary Committee introduced the American Innovation and Choice Online Act, the intention of which is to prevent the ‘self-preferencing’ of products made by large digital marketplace companies over those of third-party businesses who operate on the digital platforms.  The Center for American Entrepreneurship respectfully urges policymakers to proceed carefully and cautiously, as the risk of unintended consequences associated with marketplace-focused legislation is very real – particularly following the Covid-19 pandemic which, as we have previously noted, dramatically accelerated the adoption of digital technologies by businesses and customers alike.

Forced by Covid-related restrictions to limit foot traffic in stores or to close physical locations entirely, businesses have increasingly turned to online platforms like Amazon, Google, Facebook, Ebay, and Shopify to open digital storefronts, social media sites like Instagram, Twitter, and LinkedIn to market to customers, video conferencing platforms like Zoom and Microsoft Teams to interact with suppliers and investors, and digital payment tools like PayPal, Venmo, and Square to facilitate sales.  Indeed, some entrepreneurs have told CAE that they would not have been able to build their business, or to survive the pandemic, without the digital marketplaces.

The trend toward the digitalization of business has been underway for years, but the pandemic dramatically accelerated the shift.  According to a recent analysis by consulting firm McKinsey & Co., the pandemic compressed into a few months the adoption of e-commerce by customers that would have otherwise taken 10 years, with three out of four Americans having tried a new shopping method due to the pandemic.

At CAE, we regard such trends as permanent.  Speaking at a European Central Bank forum last November, Federal Reserve Board Chairman Jerome Powell said: ‘We’re not going back to the same economy.  We’re recovering, but to a different economy – one that is more leveraged to technology…You’ll probably see an acceleration of automation.  All of that was in the process of happening, but you’re going to see much more of it.’

The Covid pandemic has accelerated the shift to technology-powered e-commerce by at least a decade, significantly altering the nature and operation of the U.S. economy – and the competitive requirements of business success.  As a result, America’s post-Covid economic recovery depends in large part on new and small businesses operating, selling, growing, and thriving online.

With these new realities in mind, the Center for American Entrepreneurship respectfully urges policymakers to proceed carefully and cautiously – with the heightened risk of unintended consequences firmly in mind – as they deliberate antitrust legislation.”

About the Center for American Entrepreneurship (CAE)
The Center for American Entrepreneurship (CAE) is a nonpartisan research, policy, and advocacy organization whose mission is to engage and educate policymakers in Washington, and at state and local levels across the nation, regarding the critical importance of entrepreneurs and startups to innovation, economic growth, and job creation – and to pursue a comprehensive policy agenda intended to significantly enhance policy circumstances for new business formation, survival, and growth.

For more information, visit www.startupsUSA.org

Follow CAE on Twitter: @startupsUSAorg

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