Monopoly in jeopardy: The two US bills that have Big Tech worried
Apple and Google have bashed these bills
The American Innovation and Choice Online Act
This billwas first introduced in the Senate last October with an aim to prevent companies from favoring their own products on their platforms.
It’ll primarily affect companies like Apple and Google as they place their ownapps alongside third-party apps on their app stores, and in search results.It’ll also question Amazon, which sells private-label goods on its platform that compete with other sellers.
The act says companies should allow competing businesses the same access to features and operating systems as the platforms’ own apps. For example,Spotify should have the same access to system-level features as Apple Music on iOS, and YouTube Music on Android.
It notesplatform owners should also let you remove their pre-installed apps from your devices. That means you should always have the option to remove Gmail from your Android phone, or Apple’s Mail app from your iPhone.
This way, consumers have more choice when looking for a product or service, and third-parties on a platform are on a more level playing field when it comes to becoming your preferred option for streaming music, searching the web, or shopping online.
The bill alsoprohibits these firms from taking advantage of non-public data to boost their own products, or making their own products more prominently visible in front of customers. In the past,YelpandTripadvisorhave complained about Google boosting Maps over their products on Search.
Amazon has also been accused of toying with search results togive its own brands an advantage.
In 2020, firms like Epic Games, Spotify,Match Group (which owns Tinder,Match.com, OkCupid, and Hinge, among others), and Proton Mail teamed up toform a collationand protest against Google’s and Apple’s anti-competitive app store practices.
Last night, a group of companies, including Basecamp, DuckDuckGo, Genius, Quora, and Sonos,wrote a letter to the committee to support the bill.
You can read the full text of the billhere.
The Open App Markets Act
While the previous act focused on preferential treatment on all goods, this one focuses solelyon mobile app store monopoly, i.e. Apple and Google’s domination on their respective platforms.
If you’re using an iPhone or an iPad, you have to download all your apps from the App Store. If you’re using an Android phone, you’re allowed to sideload apps or get them from other app stores on your device — but Google will show you a ton of security warnings when you do that.
That means it’s not easy for other companies to build a business around app stores to offer alternatives to these giants’ marketplaces — both of which take large cuts out of app developers’ revenue.
There’s also an argument about Apple and Google charging high fees from developers for in-app purchases.Many countries across the world have already forced these companies toallow third-party payment systems, so they don’t have to pay platforms between 15%-30% of their revenue for in-app purchases and subscriptions.
The bill proposes these companies lift the aforementioned restrictions on their platforms, and allow usersto download third-party app stores — even set them as default sources. Plus, it wants platforms to clearly mark ads that promote their own apps.
The idea is thatyou should be able to download an app from any app store— not just Google’s or Apple’s. Plus, developers can offer discounts or different prices for digital goods on these alternative sources.
You can read the full text of the billhere.
Big tech’s defense
These bills have drawn similar responses from Apple and Google, and they both focus on maintaining user privacy. Ina letter written to the Senate Justice Committee, the iPhone-maker said, “The bills put consumers in harm’s way because of the real risk of privacy and security breaches.”
It bashes these bills by saying they will give more power to bad actors:
The firm has vehemently discouraged sideloading to avoid security incidents. It even published a whitepaper to highlight howApp Store protections keep users safeagainst malware and phishing campaigns.
Google also publisheda long blog postlisting several negative consequences of these bills, such as harming US technological leadership, anddisregarding user privacy. It tried to deflect the topic of discussion bysaying regulators should focus on issues like privacy, and children’s safety:
Both companies have tried hard to make the future look like doomsday if these bills are passed. However, there’s some hyperbole in their communication, and critics are not holding back to point that out.
Apple and Google are not the only companiesunder the antitrust scanner in the US. Meta is facingnumerous investigations, including the latest US bill aimed at banningtargeted online ads. Microsoft might also come under the radar with itsActivision Blizzard acquisition. It feels like the beginning of a new antitrust season.
Story byIvan Mehta
Ivan covers Big Tech, India, policy, AI, security, platforms, and apps for TNW. That’s one heck of a mixed bag. He likes to say “Bleh.“Ivan covers Big Tech, India, policy, AI, security, platforms, and apps for TNW. That’s one heck of a mixed bag. He likes to say “Bleh.”
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