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Anti-Privacy Antitrust Returns to Congress
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Anti-Privacy Antitrust Returns to Congress

A bipartisan coalition of senators has reintroduced the American Innovation and Choice Online (AICOA) Act, a sweeping proposal that would micromanage the operations of America’s largest online platforms. AICOA’s advocates, who first introduced the legislation in 2021, allegedly offered the legislation to make online commerce fairer. The bill’s arbitrary and idiosyncratic provisions would do the opposite. Eminent economist Art Laffer notes that AICOA “will vastly expand the regulatory state, make inflation worse, and crush American consumers.”

AICOA’s quixotic quest after progressive notions of “fair” competition also endangers users cybersecurity. The bill’s provisions would likely bar platforms (e.g., Apple’s iPhone iOS) from materially impeding the user’s ability to download applications from third parties rather than a vetted app store – also known as “sideloading.” Restricting sideloading protects users from malware since individuals cannot themselves vet apps effectively. Android devices discourage (but allow) sideloading. A Nokia report found that Android devices had infections at 15 times the rate of iPhones that outright disallow the practice.

Users have the option in the market to sideload if they choose and they can do so on Android devices. However, AICOA’s advocates wish to force all users and manufacturers to hazard that risk. AICOA’s title, which promises “Choice Online,” misrepresents its effect, denying the choice for greater security at the point of device purchase.

AICOA would further require platforms such as Amazon to disclose consumer data to third-party vendors and to allow third parties to transfer those data. Thus, this provision would all but ensure the proliferation of Americans’ personal information to all manner of potentially unsavory online actors.

AICOA provides platforms an affirmative defense for features that protect user privacy and security. To qualify for this exemption, platforms bear the burden of proof to establish the security feature is “reasonably tailored and reasonably necessary, such that the conduct could not be achieved through materially less discriminatory means.” This suggests that the bill’s sponsors intend that regulators and courts ought not take user safety seriously when implementing and litigating AICOA.

Economic micromanagement invariably produces minefields of unintended consequences, particularly in technologically complex and ever-changing ecosystems such as the internet. The privacy and cybersecurity threats AICOA would impose on unwilling users demonstrate this to the fullest.

David B. McGarry is a policy analyst at the Taxpayers Protection Alliance.

Published on August 1, 2023