Executive Summary

Six years ago, a House Judiciary Committee report declared America’s largest digital platforms a competitive dead end: entrenched, unassailable, closed to new entry. That report remains the intellectual foundation of the American Innovation and Choice Online Act (AICOA), first introduced in 2021 and reintroduced this June by Senators Grassley and Klobuchar as S. 4746. The trouble is that the world it described no longer reflects reality. Nearly every empirical assumption underlying AICOA has since been tested, in U.S. markets, in European regulation, and in two federal courtrooms, and the results all point the same way: digital markets are highly dynamic, with strong innovation cycles and intensifying competitive pressures from new technologies such as AI.

CCIA will publish a four-part series examining what the evidence now shows. AICOA is a solution designed for a market that no longer exists, modeled on a regulation that has already failed, aimed at a “sector” that can no longer be meaningfully defined.

Part One: The Experiment Has Already Been Run In Europe

Policymakers are rarely afforded the opportunity to observe a policy’s results before enacting it. On ex-ante digital regulation, they can. The EU’s Digital Markets Act (DMA), which AICOA closely mirrors in structure, targets, and prohibited conduct, has governed designated “gatekeepers” since March 2024, and its record is lopsided. The European Commission projected compliance costs near €1.41 million per platform per year; actual figures have run roughly two orders of magnitude higher, even as the promised benefits, like alternative app stores, lower prices, and contestable search, largely failed to materialize. Most damning, a majority of the consumers the law was purportedly intended to help cannot identify it, and 59% would pay to reverse two of the DMA’s effects. AICOA imports this architecture, aims it at five of the same firms, and in several respects makes it harsher. Congress need not guess how the ex-ante model performs; just look at the European precedent.

Part Two: The Market AICOA Describes Is the Most Dynamic in a Generation

AICOA’s supporters insist the technology sector is stagnant and closed to entry. The data say the opposite. U.S. venture capital deployed more than $412 billion in the first half of 2026 alone, nearly a third more than all of 2025, with the majority flowing to AI companies founded since 2015, several now approaching trillion-dollar valuations. New business formation is running well above its pre-2020 pace, and AI-related investment accounted for an estimated 39% of U.S. GDP growth in the first three quarters of 2025, exceeding the 28% share the same investment categories reached at the height of the dot-com boom in 2000. When a five-year-old entrant can overtake the incumbent leader in enterprise share within three years, the market is clearly contestable.

Part Three: There Is No “Tech Sector” Left to Regulate

AICOA singles out certain “tech” companies for special rules. But those whose job it is to draw sector lines have spent a decade conceding the line cannot be drawn cleanly. Ongoing incorporation of digital technologies and strategies by companies across the economy suggests these lines should not be drawn at all. The Bureau of Economic Analysis built a Digital Economy account, conceded from the outset that it could not cleanly isolate partially digital goods and services, and stopped producing it in 2023; Wall Street’s index providers have moved Alphabet, Meta, Visa, and Mastercard out of Information Technology. Walmart calls itself a “tech-powered” retailer, Goldman Sachs employs more than 12,000 engineers, and nearly half of America’s software developers work outside the industries we label “tech.” When most of the economy runs on code, a statute that regulates by label rather than conduct reaches one company and exempts its direct competitor for identical behavior.

Part Four: The Courts Have Already Shown Why Ex-Ante Rules Fail

Two 2025 federal decisions from the same courthouse drive the point home that you cannot judge competition in a dynamic market, or design remedies for a dynamic market, based on a snapshot from years ago. Judge Boasberg ruled against the FTC after a full trial against Meta, finding its market definition, built on 2012-era behavior, no longer described a 2025 world where TikTok and YouTube compete for the same attention. Judge Mehta declined the government’s broadest remedies against Google because generative AI had transformed the landscape mid-litigation. Outcomes varied by case, but they shared a core point: a court cannot assess present market power by assuming conditions have stood still since an investigation began, and must take ongoing market dynamism and innovation into account. If two experienced judges with full trial records had to update their analysis in real time to avoid error, a prescriptive statute like AICOA, primarily drafted around the market of 2021, has no chance of keeping pace.

The Through-Line

AICOA asks Congress to import a European experiment that has already underperformed, to fix a purported problem that innovation and market dynamism are making irrelevant in the AI era, in a sector that no longer exists as a discrete category, using a rigid design the judiciary has shown to rely on a flawed assumption. The premises that animated the push six years ago have not aged well. Over the next four pieces, we will show how in detail, and explain why the most innovative period in the history of American industry is precisely the wrong moment to freeze it in place.