New Senate bill targets Apple and Google dominance in the App Store



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The bipartite legislation proposed by Sens. Richard Blumenthal, Amy Klobuchar and Marsha Blackburn would ban certain contractual obligations that app developers say they are forced to accept from major app stores in order to reach consumers.

If passed, the bill could impose sweeping new demands on major technology platforms; its provisions apply to all application distribution services with more than 50 million users.

Under the bill, Apple (AAPL) – for example – couldn’t force apps to use the iPhone maker’s exclusive payment channels to process the sale of digital goods and services – an issue that turned into a major legal battle between Apple and Epic Games, the creator of Fortnite. (A decision is expected in this case this month.) It might be necessary to allow third-party app stores to work on the iPhone. And Apple couldn’t stop app developers from communicating with their users in a way that could hurt its own bottom line.

App store operators would also be prohibited from placing their own proprietary apps above those of their competitors in app store searches.

Tech industry groups immediately expressed their opposition to the bill. Chamber of Progress, a group supported by Apple and Google (GOOG), said the legislation sides with lobbyists from Epic Games, Spotify and Tile – all outspoken critics of big business.

“This bill is a finger in the eye of anyone who has purchased an iPhone or Android because phones and their app stores are safe, reliable and easy to use,” said Adam Kovacevich, CEO of Chamber of Progress. “I don’t see any consumers marching in Washington demanding Congress make their smartphones dumber. And Congress has better things to do than intervene in a multi-million dollar business-to-business dispute.”

Corie Wright, vice president of public policy at Epic Games, applauded the bill. “The introduction of this bill is an important step in the continued fight for fairer digital platforms,” Wright said in a statement. “Its passage would allow developers to seek injunctions for violations of the law, which will help level the playing field for small businesses facing monopolies that abuse their market power. “

Smaller app developers such as Proton – the Swiss company behind the privacy-focused email service ProtonMail – echoed the sentiment, saying the bill would help tackle monopoly practices that have effectively become a “massive Internet tax”.

“Proton congratulates Senators Blumenthal, Blackburn and Klobuchar for recognizing these realities and for bringing forward a bill that would unleash a level of seismic innovation,” said Andy Yen, CEO of Proton.

Dozens of states sue Google over App Store practices

The legislation comes as we increasingly examine the impact of the tech industry on competition in general, as well as the practices of Apple’s and Google’s app stores in particular. Numerous investigations into the application ecosystem are underway around the world, particularly in Europe and the United Kingdom. Earlier this year, Klobuchar, who chairs the Senate antitrust subcommittee, held a congressional hearing to examine the app market. Technological dominance has proven to be an area where Democrats and Republicans have found common ground, as evidenced by the bipartisan nature of the new bill.

“For years Apple and Google have crushed their competition and kept consumers in the dark – pocketing big deals while acting as the supposedly benevolent stewards of this multibillion dollar market,” Blumenthal said in a statement. “I am proud to join with Senators Blackburn and Klobuchar in this decisive blow against Big Tech intimidation. This bipartisan bill will help break the rock-solid hold of these tech giants, open up the saving apps to new competitors and giving mobile users more control over their own devices. ”

Blackburn said the terms of the tech giants’ app store were a “direct affront to a free and fair market,” and Klobuchar said the bill would level the playing field.

In a statement, an Apple spokesperson said, “The App Store is the cornerstone of our work to connect developers and customers in a safe and trustworthy way. … At Apple, our goal is to maintain an App Store where people can trust that every app must meet our rigorous guidelines and that their privacy and security are protected. “

Google did not immediately respond to a request for comment. Apple and Google have both championed their app stores as driving innovation and supporting small businesses, without hurting them.

The legislation contains a trap that could offer a way out for app stores: the bill includes exceptions for app store practices necessary to promote user privacy and security, or to combat it. fraud – and as long as app store operators provide “clear and compelling evidence” that these practices are not designed to discriminate between app developers.

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