California’s BASED Act Defeated
Senator Scott Wiener (D-San Francisco) announced SB 1074, the Blocking Anticompetitive Self-preferencing by Entrenched Dominant platforms (BASED) Act, which is sponsored by Y Combinator and Economic Security California Action. The BASED Act 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.
[…]
Preferencing conduct prohibited under SB 1074 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.
- Employing policies, charges, or practices that put business users at an unreasonable cost disadvantage relative to the provider
- Favoring the products of a company based upon the profit margin return to or paid to the provider
The intention was to allow other apps to become more visible, instead of the platform owner’s own services.
The bill was formed by a group of small companies backed by startup incubator Y Combinator, as well as consumer groups. However, that support was undermined by the sheer amount of lobbying Apple and Google decided to perform.
[…]
Lobbyists then started to drive constituent calls to member offices, informing them that Apple and Google’s products and services could degrade if the bill passed. Ads were also run, saying that search results would be “less useful,” that deliveries would be “slower,” and it would also make smartphones insecure.
Previously:
