The top tech businesses in the United States are very concerned about impending antitrust regulations. According to a report from Punchbowl News citing “several Senate aides,” Apple CEO Tim Cook and Alphabet CEO Sundar Pichai have been individually “calling and meeting with senators,” encouraging them to oppose the proposed legislation.
The American Innovation and Choice Online Act is a bipartisan measure championed by Amy Klobuchar (D-MN) and Chuck Grassley (R-IA) (R-IA). The bill is now in its early stages, and the Senate Judiciary Committee will consider it today. The bill would have to pass both the House and Senate to become law, but it’s easy to see why it’s ruffling Silicon Valley’s feathers.
The law makes it illegal for online platforms to promote their own “products, services, or lines of business” above those of competitors. Only the biggest tech companies are affected: Apple, Amazon, Facebook’s 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 prohibited from engaging in practices such as favoring their own search results, restricting rivals’ access to platform data, and competing against them using non-public data from customers (activities that companies including Amazon and Google are accused of).
Although the legislation’s exact impact is impossible to anticipate, one component that concerns Apple is a potential challenge to its App Store business model. Apple said in a letter to the Senate Judiciary Committee that if the bill passes, it will be required to allow customers to “sideload” program s onto iPhones and iPads the same way it does on Macs, which means installing them from sources other than the App Store. Apple claims that putting unvetted apps onto devices endangers consumers’ security and cuts into one of its primary revenue streams (Apple collects up to 30 percent commission on App Store sales).
“The bill does not force Apple to allow unscreened apps onto Apple devices,” a representative for Klobuchar told Bloomberg in response to Apple’s arguments. All of Apple’s claims against’ sideloading’ are actually just a desperate attempt to keep their app store monopoly, which they utilize to demand extortionate fees to firms they compete with.”
Despite the fact that the Klobuchar-Grassley measure has been vehemently opposed by the tech industry’s biggest players, lesser firms have come out in favor of it. A group of 35 tech businesses recently sent a letter to the Senate Judiciary Committee’s leaders, stating that the bill is needed to stop “the myriad anticompetitive self-preferencing practices dominant technology corporations utilize to achieve and entrench their gatekeeper status.”
“For far too long, dominant technology companies have made it difficult for others to compete in the digital marketplace by abusing their gatekeeper status to give themselves and their partners preferential treatment and access on their platforms,” the letter’s signatories, which include DuckDuckGo, Patreon, Sonos, Wyze, and Yelp, wrote.
It’s not the first time that Silicon Valley’s top CEOs have taken a stand against antitrust laws. Cook called Speaker Nancy Pelosi last year to “send a caution” regarding the impact of “rushed” legislation as US lawmakers debated five new antitrust bills.