Federal lawmakers backing a new bill introduced in the Senate say they want there to be more online shopping options for consumers. However, a close review of their proposal shows their draft legislation may only strengthen entrenched brick-and-mortar stores while weakening the biggest online marketplace in the world, possibly making shopping worse for consumers overall.
The American Innovation and Choice Online Act has been circling Congress for years and was recently reintroduced in slightly tweaked form. Originally, the legislation was borne out of allegations that Big Tech was “self-preferencing” certain products.
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The bill targets so-called “systemically important” platforms with average annual gross revenues of at least $175 billion, banning target firms from self-promoting private-label brand products, such as batteries or clothing; misusing nonpublic business-user data against small businesses; and limiting competitor access to platform features. The Justice Department, Federal Trade Commission, and state attorneys general can civilly sue companies to enforce the rules. The bill looks like a direct assault on Amazon, in particular, though some critics say it could also affect Walmart, at least theoretically.
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“In today’s digital age, a handful of dominant companies control what Americans can buy, hear, and say online,” Sen. Chuck Grassley (R-IA) said this month after reintroducing the bill. “When these companies abuse their market power to give themselves a leg up … American consumers and small businesses pay the price.”
Grassley worked with Sens. Amy Klobuchar (D-MN), Dick Durbin (D-IL), and Sheldon Whitehouse (D-RI) on the measure. The three Democrats just so happen to represent states that are home to major retailers, including Target, Walgreens, and CVS, all of which sell lower-priced private-label products that compete with Amazon and Walmart, and none of which would be regulated by the AICOA under its current drafting.
Federal campaign records show the senators have received contributions over the years from employees, executives, and affiliated political committees connected to those companies. Critics argue that those retailers could benefit from legislation that restricts Amazon’s ability to promote similar products online, especially because only it currently meets the AICOA’s definition of a “systemically important” platform.
Amazon’s rise to the top isn’t only due to its lower prices on name-brand items. When users search for supplements, clothing, or batteries, Amazon features Amazon Basics products before others — at cheaper prices. Critics argue that the AICOA could discourage Amazon from prominently featuring lower-cost private-label products, possibly reducing some of the savings consumers receive, while allowing traditional retailers to engage in the supposedly “regulated,” objectionable behavior.
That in turn could result in “affordability” critiques of the AICOA, as opposed to mere “thumb on the scales cronyism” objections, which experts are already calling out.
“Retailers have always decided what to stock, where to place products, and when to offer their own lower-cost alternatives,” said Ashley Baker, executive director at The Committee for Justice. “AICOA would turn that ordinary retail behavior into a federal antitrust problem only when certain online platforms do it, which makes the bill look less like competition policy and more like protectionism for favored competitors.”
Amazon is meaningfully different from traditional big-box retailers because it does not simply sell products to consumers — it gives independent sellers, small businesses, and niche brands a storefront, fulfillment infrastructure, advertising tools, and national customer reach that they could not easily replicate on their own. Independent sellers account for more than 60% of sales in Amazon’s store, and Amazon reported that more than 75,000 independent sellers surpassed $1 million in sales in 2025. U.S. sellers on Amazon averaged more than $375,000 in annual sales, and Amazon’s third-party seller-services business alone generated $172.2 billion in 2025.
By contrast, retailers such as Target, CVS, and similar chains are far more controlled and curated retail environments. Target has built a third-party marketplace, but Target Plus remains selective: As of 2024, it featured more than 2 million products from just over 1,200 partners chosen by Target’s in-house team. Target has said it wants to grow third-party digital sales from roughly $1 billion in 2024 to more than $5 billion by 2030 — meaningful growth, but still a fraction of the scale Amazon has built around independent sellers. CVS is an even sharper contrast: Its public supplier pathway is framed around becoming a CVS supplier or entering CVS Launch for emerging brands, not joining a broad, open marketplace.
This means that the practical result of a bill that singles out Amazon is not just an attack on the world’s largest retailer, but it’s also an attack on the world’s largest platform for small businesses to find and supply products to their customers. Anything that threatens that would be quite detrimental to small businesses in America.
“The companies that are getting screwed by this kind of self-preferencing regulation that would sort of break up integrated back platforms are the small businesses that rely on Amazon.com to distribute their products,” said Joshua Withrow at the R Street Institute. “Lawmakers don’t seem to care about the harms to them.”
It’s a sharp difference from a previous version of the bill that used a “covered platform” test with multiple requirements, including 1 billion worldwide active users or $550 billion in U.S. net annual sales.
Critics believed those rules also targeted Amazon. It also drew a public rebuke from the online retailer in 2022.
“The bill’s authors are targeting common retail practices and, troublingly, appear to single out Amazon while giving preferential treatment to other large retailers that engage in the same practices,” a spokesperson said.
This isn’t just an American debate.
To a certain extent, the AICOA represents an American version of Europe’s Digital Markets Act. Both use similar regulatory structures by identifying special classes of “systemically important platforms” using revenue and user or household reach thresholds. Both prohibit companies from ranking their own products and services more favorably than similar third-party products. They also establish preset “dos” and “don’ts” for companies in daily operations.
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“The White House has called the DMA extortion of American companies,” said Robert Winterton, vice president of public affairs at NetChoice. “AICOA is the domestic version of that same playbook, and its authors know it.”
While Congress may want to increase online competition, the legislation it is considering effectively applies to one company — protecting established retailers instead of helping customers. If lawmakers want more choices and lower prices, they should avoid regulating away the marketplace that small businesses and shoppers already rely upon. They could also immunize themselves from attacks that they are targeting a single competitor by clearly rolling Walmart into the same legislation, but thus far, they have declined to do so.
Taylor Millard is a freelance journalist who lives in Virginia. Follow him on X @TaylorMillard.
