Antitrust Bills Could Have Unintended Consequences for Small Businesses

A series of new bills aims to curb monopolies among tech giants like Amazon. While the goal is ultimately to increase competition and help small businesses, some argue that their passage could actually have the opposite effect.

These bills, the American Choice and Innovation Online Act and the Ending Platform Monopolies Act address issues like large brands prioritizing their own products in search results. For example, Amazon’s private label product line, AmazonBasics, has been expanding in recent years, providing stiff competition for small businesses that sell on the platform.

However, critics of the proposed bills argue that the language may be too vague. And they do nothing to prevent Amazon and other tech companies from adjusting to pad their profit margins in other ways that may be even more harmful for small businesses.

For example, if Amazon becomes unable to sell its AmazonBasics line, it may look to earn more by partnering with larger brands.

In a recent opinion piece for The Hill, Hsing Kenneth Cheng, Ph.D. and Jingchuan Pu, Ph.D., of the University of Florida wrote, “Imagine you are a small business owner that is selling athletic shoes on Amazon and, rather than competing directly with AmazonBasics, you now need to compete with Nike or Adidas. That’s a major game-changer, and not in a good way. When backed into a corner, Amazon (being a profit-driven company) will look to maximize its revenue, and it won’t be doing small businesses any favors in the process. Amazon will seek to gain more bargaining power over companies like Nike. In the process, small business owners will lose visibility on the platform, and global brands will gain it.”

This doesn’t mean that fighting monopolies is useless. But considering all the potential implications of any changes is an important part of passing these bills. When attempting to regulate tech giants like Amazon that have offerings for small businesses, it’s important to understand that these companies will prioritize their own profits over nearly everything else. If the goal is really to support small businesses, then some extra scrutiny may be necessary before passing any legislation.

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