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House Bills Seek to Break Up Amazon and Other Big Tech Companies

House lawmakers proposed a raft of bipartisan legislation aimed at reining in the power of Big Tech, including a bill that seeks to make

Amazon.

AMZN -0.08%

com Inc. and other large companies effectively split into two companies or shed their private-label products.

If the bills become law—a prospect that still faces significant hurdles—they could substantially alter the most richly valued companies in America and reshape an industry that has extended its impact into nearly every facet of work and life.

One of the proposed measures, titled the Ending Platform Monopolies Act, seeks to require structural separation of Amazon and other big technology companies to break up their businesses. It would make it unlawful for a covered online platform to own a business that “utilizes the covered platform for the sale or provision of products or services” or that sells services as a condition for access to the platform. The platform company also couldn’t own businesses that create conflicts of interest, such as by creating the “incentive and ability” for the platform to advantage its own products over competitors.

A separate bill takes a different approach to target platforms’ self-preferencing. It would bar them from conduct that “advantages the covered platform operator’s own products, services, or lines of business over those of another business user,” or that excludes or disadvantages other businesses.

The proposed legislation would need to be passed by the Democratic-controlled House as well as the Senate, where it would likely also need substantial Republican support. While Republicans are concerned about technology companies’ power, many are skeptical about changing antitrust laws.

Each of the bills has both Republicans and Democrats signed onto it, with more expected to join in the coming days, congressional aides said. A total of seven Republicans are backing the bills, with a different group of three signing on to each measure, according to a person familiar with the situation.

“Unregulated tech monopolies have too much power over our economy,” said Rep. David Cicilline (D., R.I.), the top Democrat on the House Antitrust Subcommittee. “They are in a unique position to pick winners and losers, destroy small businesses, raise prices on consumers, and put folks out of work. Our agenda will level the playing field.”

Rep. Ken Buck

(R., Col.), the top Republican on the panel, said he supports the legislation because it “breaks up Big Tech’s monopoly power to control what Americans see and say online, and fosters an online market that encourages innovation.”

The four companies didn’t immediately comment on the proposed legislation. All four companies have defended their competitive practices and said that they operate their products and services to benefit customers.

The proposed bills are among five bills announced Friday that aim to curb the dominance of technology giants.

A third bill would force online platforms to make their services interoperable with those of competitors, a provision that could force different social networks to allow their users to communicate or allow e-commerce sellers to export their customer reviews from one site to another, according to a summary provided by lawmakers.

A fourth bill targets mergers, making it unlawful for a large online platform to acquire competitors or potential competitors. The bill would have prevented only “a small percentage of all technology sector deals” over the past decade, the summary said.

Lawmakers also introduced a bill to raise filing fees for mergers valued more than $1 billion and lower them for transactions under $500,000. It would generate an estimated $135 million for antitrust enforcement agencies in its first year, the summary said. Similar legislation recently passed the Senate.

Amazon’s Worldwide Consumer CEO Jeff Wilke discusses the prevalence of the company’s private brands. He speaks at WSJ Tech Live.

Four of the five bills are narrowly focused only on big technology companies. The definitions of companies targeted by the bills state that they must have a market capitalization of $600 billion or more, must have more than 50 million active monthly users or 100,000 monthly active business users, and must be a “critical trading partner” that has the ability to restrict or impede another business’ access to customers or services.

Only four companies—Amazon, Apple, Facebook and Google—currently meet the parameters laid out in the bills, according to the person familiar with the matter. They are the same companies that Congress investigated as part of its probe into Big Tech.

Walmart Inc.,

WMT 0.62%

for instance, operates an online marketplace and has private-label products, but only has a $392 billion market valuation, so wouldn’t be subject to the restrictions.

While the bills don’t name any companies, they reflect issues raised by Big Tech critics. The bill on self-preferencing bars actions that “restrict or impede business users from communicating…to covered platform users to facilitate business transactions,” invoking a common complaint from Amazon’s third-party sellers about limits on their ability to communicate with customers.

Amazon operates one of the world’s largest platforms for third-party sellers to hawk their goods, but also competes against these vendors with its business selling similar products under an assortment of its own in-house brands—often priced below the items from its third-party sellers.

Some lawmakers have said that the platform favors Amazon’s own goods at the detriment to sellers and have rebuked Amazon’s use of third-party data to inform its own line of private-label goods. Last year, the Journal reported about Amazon employees using the third-party data of sellers on its website to launch its own private-label lines, violating an internal policy.

Amazon later opened an investigation into the practice. When testifying to Congress, Amazon Chief Executive

Jeff Bezos

said: “I can’t guarantee you that that policy has never been violated.”

In the past, the Seattle company has said that “large companies are not dominant by definition, and the presumption that success can only be the result of anti-competitive behavior is simply wrong.”

If the Ending Platform Monopolies bill were to be passed, Amazon could have to split its business into two separate websites, one for its third-party marketplace and one for first-party, or divest or shut down the sale of its own products. Amazon’s private-label division has dozens of brands with 158,000 products. It is also a market leader on devices such as Kindle eReaders, Amazon Echos, Fire TV streaming devices, Ring doorbells and a line of wearable devices.

The Ending Platform Monopolies Act has been compared with the banking industry’s Glass-Steagall Act, which separates commercial and investment banking.

The new bill would effectively mean “a search engine could not own a video service that it has incentives to favor in search results,” the summary from lawmakers said, in a thinly veiled reference to Google’s YouTube.

The bill that aims at self-preferencing could affect how Amazon conducts its retail business and how Apple operates its app store.

Congress has blocked or reversed big companies’ expansion before. Though the separation of investment and commercial banks in the 1933 Glass-Steagall Act has since been repealed, banks are still restricted from nonfinancial businesses under the 1956 Bank Holding Company Act. The 1906 Hepburn Act restrained railroads from ancillary businesses such as coal mining.

Absent congressional action, technology critics are looking to federal agencies. Google and Facebook are already fighting antitrust lawsuits, while Amazon and Apple are under antitrust investigation. Democrats on the Federal Trade Commission also want to explore the agency’s authority to regulate unfair methods of competition, although that authority is relatively untested and could face legal challenges.

Write to Dana Mattioli at dana.mattioli@wsj.com and Ryan Tracy at ryan.tracy@wsj.com

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