Reviving AICOA: Third Time Isn’t the Charm

This week, Sens. Grassley (R-IA) and Klobuchar (D-MN) reintroduced the American Innovation and Choice Online Act (AICOA), for the third time. First appearing in 2021 and again in 2023 with declining support, AICOA failed to pass in part because of significant concerns over increasing costs on American consumers. At a time when consumers are facing rising inflation, AICOA would undermine the free and low cost digital tools consumers use to find lower prices, exchange information, and work and study online.

AICOA is an American version of the European Union’s Digital Markets Act (DMA). This U.S. version raises significant concerns regarding antitrust enforcement, economic competitiveness, consumers’ online safety and privacy, and risks turning digital safety protocols into a litigation trap.

AICOA Imports Costly International Regulatory Experiments 

Previous versions of AICOA were flawed attempts to pivot American antitrust enforcement toward a DMA-style, ex-ante regulatory model. Instead of applying an evidence-based approach to address specific competition issues, the DMA seeks to impose concepts of “contestability” and “fairness” through stringent regulatory obligations and behavioral prohibitions on designated “gatekeeper” platforms. AICOA mirrors the DMA by relabeling what older versions of the bill called “covered platforms” as “systemically important platforms.” This borrows the logic of banking regulations, implying that every core function of a private technology business warrants direct government oversight. Such a move would place enormous compliance costs on U.S. firms and increase risks to consumer privacy and safety.

Worsening Consumer Outcomes While Risking Online Safety and Privacy

Some of AICOA’s most concerning provisions are its adoption of DMA-like specific conduct obligations. AICOA’s requirements for cross-platform interoperability, data sharing, and forced “sideloading” of third-party app stores would introduce significant security, privacy, and safety risks for consumers. While interoperability can promote consumer choice and competition in some circumstances, these mandates risk exposing consumers to malware, fraud, and other cybersecurity threats from unverified developers, while also risking firms’ cybersecurity and intellectual property. 

Europe’s experience under the DMA illustrates these concerns. Major platforms have been forced to accommodate alternative app stores and third-party distribution channels that operate outside the platforms’ security safeguards. In some cases, alternative app stores have reportedly distributed pornographic content that would not have been permitted under the safety standards of major app stores. By importing similar interoperability and sideloading mandates, AICOA risks weakening platform security protections and exposing consumers to greater online harms, raising the risk that apps from unverified developers could introduce malware to users’ smartphones and erode their privacy.

AICOA also mirrors the DMA’s restrictions on self-preferencing and cross-service data use, which can degrade the quality of online services. Limiting how platforms rank, recommend, or integrate their own products may reduce the relevance of search results, diminish website discoverability, and fragment user experiences across interconnected services. Restrictions on data use can likewise reduce personalization and advertising efficiency, increasing costs for businesses while making services less useful for consumers. These concerns are reflected in consumer sentiment following the DMA’s implementation: recent survey data indicates that many European users perceive a deterioration in their online experience, with more than 40 percent of respondents reporting they would pay to restore pre-DMA services. 

Legal Burden-Shifting That Undermines Consumer Protection

Like its past iterations, AICOA threatens U.S. global technological leadership and innovation by fundamentally altering how liability is established in competition cases. Unlike traditional U.S. antitrust law, where plaintiffs bear the burden of proving unlawful conduct, AICOA adopts the DMA’s ex-ante approach of presuming liability and shifting the burden to designated platforms to prove otherwise. 

This latest version also raises the evidentiary bar, requiring companies to establish their conduct was necessary, justified, and lawful by “clear and convincing” evidence, a substantially higher standard than the ordinary preponderance-of-the-evidence test used in most civil litigation. This effectively creates a “sue first, figure it out later” framework, allowing plaintiffs to challenge a wide range of routine business practices.

The consequences extend beyond litigation costs. Under AICOA, routine business practices like removing bad actors, limiting data sharing, and deploying integrated security measures to protect consumers from fraud, malware, and data breaches could become legally risky. Faced with increased litigation risk and legal uncertainty, firms may become less willing to implement aggressive security measures, ultimately weakening consumer privacy, cybersecurity, and online safety. 

Misapplied Antitrust Enforcement as Content Regulation

AICOA extends antitrust law far beyond its traditional role by subjecting routine content moderation and editorial decisions to antitrust scrutiny, raising serious constitutional questions. Like its failed predecessors, the latest bill prohibits certain forms of “discrimination,” “self-preferencing,” “unreasonable delay,” and “impediment” toward business users, yet these concepts remain poorly defined in the context of digital services. As a result, companies would face substantial uncertainty regarding ordinary business decisions. Ranking, recommendation, moderation, and enforcement decisions could be recast as discriminatory treatment or unlawful self-preferencing. By effectively regulating how platforms display, prioritize, or remove content, AICOA risks transforming antitrust enforcement into a mechanism for regulating speech.

The likely result is increased litigation risk and regulatory uncertainty. Faced with vague statutory standards and potentially significant penalties, platforms may alter or limit consumer-facing features, reduce the use of ranking and recommendation tools, or modify their moderation practices to avoid legal challenges. Rather than promoting competition, the bill risks degrading product quality and limiting the ability of services to provide curated, safe, and useful experiences for consumers. The bill’s rule of construction does not eliminate underlying constitutional concerns if the substantive provisions continue to impose liability based on editorial and moderation decisions.

Conclusion

AICOA failed in the past because of a broad understanding that government should not be picking winners and losers in the economy; AICOA was a bill that deserved to die. This latest revival amplifies its failures into a regime of regulatory overdeterrence. This approach would weaken U.S. global competitiveness and tech leadership, which is already being challenged by foreign adversaries. U.S. competition policy should not be about making U.S. companies less competitive. For policies that truly promote competition, encourage innovation, and benefit consumers, Congress should look elsewhere.