Senator Wiener Announces Landmark Legislation To Crack Down on Big Tech’s Anticompetitive Behavior

The BASED Act will protect competition and unlock innovation by preventing Big Tech companies from favoring their own products and services over those of competitors over smaller companies.

SAN FRANCISCO – 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.

For years, giant digital platforms like Apple, Amazon, Google, and Meta have used their immense power to promote their own products and services while stifling competitors — a practice also known as self-preferencing. The result has been higher prices, diminished service, and fewer options for consumers, and less innovation across the technology ecosystem. 

Self-preferencing also locks startups and mid-sized companies out of the online marketplace unless they play by rules set by their competitors. As a new generation of AI-powered startups seeks to enter the marketplace, their success — and public access to the innovations they produce — depends on their ability to compete on an even playing field. 

“Competition is the key that unlocks lower prices and innovation. Yet real competition can be hard to find on our largest digital platforms,” said Senator Wiener. “Anticompetitive behavior is everywhere on the internet, from rigged search results, to manipulative nudges boosting the ‘house’ product, to anti-discount policies that raise prices, to the dreaded green bubble that “breaks” the group chat. When the world’s largest digital platforms rig the game to favor their own products and services, we all lose. By prohibiting these anticompetitive practices, the BASED Act will protect competition online, empower consumers and startups, and promote innovations to improve all our lives.”

Big Tech’s anticompetitive self-preferencing practices have faced serious legal scrutiny for years. Apple was found to have violated California’s Unfair Practices Act with its anti-steering policy by the Ninth Circuit Court of Appeals in 2023. The Federal Trade Commission sued Amazon for anti-discounting “most-favored nation” policies and a range of other anticompetitive practices the same year. Last May, Google was found guilty of violating the Sherman Act. 

These practices create a wide array of harms. Consumers often face higher prices from anti-discounting policies enforced by Amazon. iMessage users attempting to contact Android-using friends are punished with poor functionality marked by the infamous green bubble. Meta demotes links to competing platforms in Facebook’s News Feed, influencing what information the public can access.

"When the same company owns the marketplace it competes in, it is all too easy to unfairly tilt the scales in their own favor. It’s well documented that this is precisely what some of the largest tech companies have been doing," said Teri Olle, Vice President, Economic Security California Action. "Startups, small and medium tech companies, and independent entrepreneurs can't build and grow if the most ubiquitous digital platforms bury their products. The BASED Act would prohibit self-preferencing and safeguard merit-based market competition. This legislation stands for a simple principle: owning the stadium doesn’t mean that you get to rig the game."

“BASED is not about punishing success, it’s about stopping market corruption — the moment when a platform uses its control over the pipes to bury rivals, tax every transaction, and quietly swallow the open web,” said Garry Tan, CEO of Y Combinator. “This bill restores something simple and very American: if you build something great, you should win or lose on the merits, not on whether a gatekeeper decides to rig the rules.”

Federal law has proven incapable of reining in most anticompetitive behavior in the technology industry. SB 1074 fills that gap by establishing a clear list of prohibited anticompetitive conduct for the largest digital platforms — specifically, those owned by firms with a market capitalization of $1 trillion or more that serve 100 million or more U.S. monthly users. Enforcement is modeled on the Cartwright Act, California's foundational competition statute, and includes a private right of action for injured business users and consumers. The Attorney General may also bring actions on behalf of the state.            

"The BASED Act builds on a century-long tradition of state leadership in competition law,” said Jonathan Kanter, Assistant Attorney General, US Department of Justice Antitrust Division (2021-2025). “This important legislation will help ensure that digital markets remain open, competitive, and fair, and that economic opportunity keeps pace with the realities of our digital economy."          

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
• Conditioning access or placement on the platform based on the purchase or use of a product from the provider outside of an advertising context 
• Requiring most-favored-nation clauses or margin guarantees that restrict business users' ability to set their own prices on or off the platform

Additionally, providers may not:

• Provide a service to a consumer that preferences a third party entity with whom the provider has a relationship
• Deny business users access to platform, OS, hardware, or software features available to the provider's own products
• Prevent consumers from obtaining a portable copy of their own data or restrict voluntary data sharing (by consumers) with third parties

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