A new proposal aiming to encourage competition and curtail Big Tech in California may have unintended consequences for small businesses.
The California Law Revision Commission is currently reviewing state antitrust laws and is considering a recommendation to ban “self-preferencing.” This describes the practice of digital platforms prioritizing their own content or products and services. For example, when you search for a business using Google, the first results tend to come from Google My Business or other platforms owned by Google. Under this new rule, that prioritization would not be allowed.
This move is meant to encourage competition among tech platforms instead of allowing the most popular companies like Google and Meta to control most of the online experience. However, some argue that it would ultimately harm small businesses by making it more difficult to reach customers online.
Angela Harris, owner of Wellness of Life Internal Restoration Clinic and Wellness of Life Products in Sacramento, recently wrote in an opinion piece for CalMatters, “What does that mean for me? Right now, if you search for my business online, our Google business profile will immediately pop up, allowing you to click on a map to find our location, read reviews of our business, check our hours, click a button to visit our website or call to talk to an expert. The law revision commission suggests breaking all that information apart and forcing Google to show other companies’ maps, reviews and compilations of our business information.”
California wouldn’t be the first government to adopt this type of rule. In fact, the European Union recently passed similar regulations under the Digital Services Act and Digital Markets Act. These rules are meant “to establish a level playing field to foster innovation, growth, and competitiveness, both in the European Single Market and globally.”
It’s certainly true that a few of the largest tech companies seem to control much of the online experience for both consumers and businesses. But these companies also provide many convenient and affordable solutions that can help small businesses reach their customers.
So, while the idea of curtailing big tech companies and encouraging competition is admirable, it’s important for agencies like this one to consider all the potential consequences. For small businesses, this type of change could make certain tools like Facebook and Google My Business pages less effective. Ultimately, trying out different solutions and advocating for positive changes may be the only thing that businesses affected by these and similar regulations can do.
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