Small business holds key to tech's antitrust fate
Big Tech giants and their adversaries are both trying to enlist a powerful constituency in their battle over looming antitrust legislation: small businesses.
Why it matters: Small businesses can have outsize sway with Washington lawmakers, and the fight for their support will shape the fate of Congress' crusade to limit tech power.
What's happening: The package of House bills under consideration, and companion legislation in the Senate, would prohibit the major tech platforms from unfairly favoring their own products and create barriers to new acquisitions.
Amazon has warned third-party sellers that the legislation could jeopardize its ability to host third-party sellers on its platform completely.
Meanwhile, Google has been notifying its small business customers that the legislation could make it harder for users to find business listings in Google Search or Maps results, and hurt the effectiveness of digital marketing.
- Mike Blumenthal, a consultant who helps companies with local marketing efforts, says he was stunned by Google's messaging. He worries small businesses "might just lap this up" because owners tend to believe regulation for somebody will be bad for them.
- "It’s so strange to me monopolies are trying to leverage small businesses to make their case," Blumenthal told Axios.
Connected Commerce Council, a small business group that receives funding from Amazon and Google, coordinated virtual meetings last month between business owners and over a dozen lawmaker offices to discuss the legislation and their concerns, executive director Rob Retzlaff told Axios.
- "We felt the need for elected officials to hear from their own constituents to discuss the issues that are really important to them," Retzlaff said.
The other side: Rep. Ken Buck, (R-Colo.), ranking member of the House Judiciary antitrust subcommittee and the leading Republican on the bills, says Big Tech's outreach to small businesses shows "desperation." He was initially skeptical of the committee's Big Tech investigation until he heard first-hand from companies struggling with the platforms.
- A former prosecutor, Buck said stories shared during a field hearing in his home state in 2020 struck him as cases he would prosecute. "They just steal a product, and then crush the competition because they have a monopoly platform."
- "[Big Tech companies] know that these bills will create competition in the marketplace," Buck told Axios. His message to small businesses is: "the cavalry is on the way. You're going to have a choice of platforms to deal with in the future and you're going to be so much stronger as a result."
- During a virtual roundtable with small businesses, Sen. Amy Klobuchar, who leads the Senate's antitrust bills, said: "I love the scare tactics, like we somehow want these platforms to completely go away or that Amazon prime will go away. It's just a total lie."
A tale of two Amazon sellers: Doug Mrdeza, who owned a Michigan college town barber shop, shifted to selling products on Amazon in 2014 when he realized he could sell more online in the summer months.
- Mrdeza grew a business reselling products on the platform, but said he eventually struggled with Amazon's fees, rule changes and cost discrepancies, filing bankruptcy this fall.
- "The reason why I'm paying all these costs is because in the future there's going to be bigger opportunities — that's the pipe dream I was sold," said Mrdeza, who has shared his story with the Institute for Local Self Reliance, an anti-monopoly group in support of the antitrust bills. "But it didn't pan out. [N]ot only were the sales not coming in at the velocity they once were, but the cost of sales had increased."
Alfred Mai launched his tabletop games company, ASM Games, four years ago, and uses Amazon's fulfillment services to handle shipping, now selling in seven countries.
- "The one thing that I'm most concerned about, and I think any marketplace seller should be concerned about, is will this bill create an environment where it makes it almost not viable for Amazon to continue having third party marketplace sellers," said Mai, who has appeared in a webinar hosted by Connected Commerce Council. "[T]hat would be disastrous for someone like me."
- "Even if Congress smashes Amazon into a million pieces, Jeff Bezos will be fine. But we might not be."