The United States’ biggest tech companies are seriously worried about new antitrust legislation. So much so that Apple CEO Tim Cook and Alphabet CEO Sundar Pichai have been personally “calling and meeting with senators,” urging them to oppose the mooted legislation, according to a report from Punchbowl News that cites “multiple Senate aides.”
The legislation in question is The American Innovation and Choice Online Act, a bipartisan bill spearheaded by Amy Klobuchar (D-MN) and Chuck Grassley (R-IA). The legislation is currently in its early stages, and is set to be considered by the Senate Judiciary Committee today. The bill would need to pass votes from both the House and Senate to become law, but it’s still easy to see why it’s ruffling feathers with Silicon Valley’s biggest beasts.
The legislation only affects the biggest US tech firms
The legislation prohibits online platforms from advantaging their own “products, services, or lines of business” over those of rivals. It applies only to the biggest tech companies: Apple, Amazon, Facebook-owner Meta, and Alphabet’s Google (though Bloomberg News reports it will be expanded to cover Chinese tech giants TikTok and WeChat, too). These platforms would be barred from behavior like biasing search results in their favor, limiting rivals’ access to platform data, and using non-public data from customers to compete against them (activities that companies including Amazon and Google are accused of).
Although the exact impact of the legislation is difficult to predict, one aspect that worries Apple in particular is a possible threat to its App Store business model. In a letter sent by the company to the Senate Judiciary Committee, Apple said that if the bill became law it would be forced to allow users to “sideload” apps onto iPhones and iPads as it does Macs — meaning installing them from sources outside the App Store. Apple says this threatens the security of its users by allowing unvetted apps onto devices, and cuts into one of its main revenue streams (Apple collects up to 30 percent commission on App Store sales).
In response to Apple’s arguments, a spokesperson for Klobuchar told Bloomberg: “The bill does not force Apple to allow unscreened apps onto Apple devices. All of Apple’s arguments about ‘sideloading’ really amount to a desperate attempt to preserve their app store monopoly, which they use to charge huge fees from businesses they are competing against.”
Although the Klobuchar-Grassley bill is roundly opposed by tech’s largest companies, smaller players have come out in support of the legislation. A coalition of 35 tech firms recently wrote a letter to the leaders of the Senate Judiciary Committee arguing that the legislation is necessary to curb “the many anticompetitive self-preferencing tactics dominant technology companies use to attain and entrench their gatekeeper status.”
“For too long, dominant technology companies have made it difficult for other businesses to compete in the digital marketplace by abusing their gatekeeper status to give themselves and their partners preferential treatment and access on their platforms,” said the letter’s signatories, which include DuckDuckGo, Patreon, Sonos, Wyze, and Yelp.