Tech
Tech Leaders Support California Bill to Stop ‘Dominant Platforms’ From Blocking Competition
A new bill proposed in California “goes after big tech companies” writes Semafor. Supported by Y Combinator, Cory Doctorow , and the nonprofit advocacy group Fight for the Future, it’s called the “BASED” act — an acronym which stands for “Blocking Anticompetitive Self-preferencing by Entrenched Dominant platforms.”
As announced by San Francisco state representative Scott Wiener, the bill “will restore competition to the digital marketplace by prohibiting any digital platform with a market capitalization greater than $1 trillion and serving 100 million or more monthly users in the U.S., from favoring their own products and services on the platforms they operate.”
More from Scott Wiener;s announcement:
For years, giant digital platforms like Apple, Amazon, Google, and Meta have used their immense power to promote their own products and services while stifling competitors — a practice also known as self-preferencing. The result has been higher prices, diminished service, and fewer options for consumers, and less innovation across the technology ecosystem.
Self-preferencing also locks startups and mid-sized companies out of the online marketplace unless they play by rules set by their competitors. As a new generation of AI-powered startups seeks to enter the marketplace, their success — and public access to the innovations they produce — depends on their ability to compete on an even playing field.
“Anticompetitive behavior is everywhere on the internet,” said Senator Wiener, “from rigged search results, to manipulative nudges boosting the ‘house’ product, to anti-discount policies that raise prices, to the dreaded green bubble that ‘breaks’ the group chat. When the world’s largest digital platforms rig the game to favor their own products and services, we all lose. By prohibiting these anticompetitive practices, the BASED Act will protect competition online, empower consumers and startups, and promote innovations to improve all our lives.”
The announcement includes a quote from Teri Olle, VP of the nonprofit Economic Security California Action, saying the act would “safeguard merit-based market competition. This legislation stands for a simple principle: owning the stadium doesn’t mean that you get to rig the game.”
Some conduct prohibited by the proposed bill includes
- Manipulating the order of search results to favor a provider’s products or services, irrespective of a merit-based process,
- Using non-public data generated by third-party sellers — including sales volumes, pricing, and customer behavior — to develop competing products that are subsequently boosted above the third-party sellers’ product…
And the announcement also notes that “under the terms of the bill, providers could not prevent consumers from obtaining a portable copy of their own data or restrict voluntary data sharing (by consumers) with third parties.”
Read on for reactions from DuckDuckGo, Proton, Yelp, Y Combinator, and Cory Doctorow.
“This is exactly the kind of common-sense antitrust reform we need if we want the next generation of startups to have a fair shot rather than watching Big Tech pull up the ladder behind them.”
— Jeremy Stoppelman CEO and Co-Founder, Yelp
“California has led the way on privacy, and now it has a chance to lead on digital competition. SB 1074 would prohibit the self-preferencing tactics that dominant platforms use to box out competitors — the same tactics that make it harder for people to discover and switch to privacy-respecting alternatives like DuckDuckGo.” — Kamyl Bazbaz, Chief Communications and Policy Officer, DuckDuckGo
“When users can freely choose privacy-focused alternatives without artificial barriers, everyone benefits — from independent developers to everyday people who deserve control over their digital lives.”
— Raphael Auphan, Chief Operating Officer, Proton
“[The BASED act] is about stopping market corruption — the moment when a platform uses its control over the pipes to bury rivals, tax every transaction, and quietly swallow the open web. This bill restores something simple and very American: if you build something great, you should win or lose on the merits, not on whether a gatekeeper decides to rig the rules.” — Garry Tan, CEO of Y Combinator
“If there’s one thing we’ve learned from the enshittification of digital platforms, it’s this: *someone* is going to regulate the way you use the internet. If governments don’t step in, that regulator will be a powerful *company*, a platform that structures markets to maximize its interests, at the expense of technology makers, technology users, buyers *and* sellers.”
— Cory Doctorow
The proposed bill has sparked “broad support from tech leaders and open markets,” according to an announcement from Senator Wiener’s officer:
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