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Senator and U.S. Presidential hopeful Elizabeth Warren made a bold announcement via Medium last week that, if elected President, she would seek to block large tech companies from using their own platforms to promote their own products and services. For example, Amazon would be prevented from selling its own “Amazon Basics” products on its own retail store, Google would not be able to promote any of its products or services in its own search results, and Facebook would have to get rid of Instagram and WhatsApp.
While Warren’s announcement didn’t specifically call out Apple by name, the criteria that Warren cited — any company that makes more than $25 billion per year in revenue — would most certainly include Apple, and of course the company distributes its own apps on its own App Store. In an interview with The Verge, Senator Warren clarified that her plan most definitely includes Apple as well. When Editor-in-Chief Nilay Patel simply posed the question, “There was one company that fits the description that you did not mention,” Warren immediately responded by simply saying, “Apple. They’re in.”
Apple, you’ve got to break it apart from their App Store. It’s got to be one or the other. Either they run the platform or they play in the store. They don’t get to do both at the same time.U.S. Senator Elizabeth Warren
Senator Warren made it clear that under her proposal, Apple would not be allowed to sell their own apps on their own App Store because of the competitive advantages that the company benefits from by running the actual store. Warren notes that firstly Apple has access to information about all of the buyers and sellers before they even need to decide what apps they’re going to sell themselves, and secondly Apple has the capacity to ensure that their products are placed in prominence over any competing products. “It gives an enormous comparative advantage to the platform,” Warren adds.
What’s less clear is how this would affect Apple’s ability to distribute free apps via its own App Store. Presumably, this wouldn’t be a problem under Warren’s plan, since no revenue is being generated in this case. While the argument could be made that Apple’s free apps provide a competitive disadvantage to similar paid apps, that becomes a slippery slope as the same could be said for any app that’s built into macOS or iOS itself. Since the release of iOS 10, Apple actually distributes almost all of the built-in iOS apps via the App Store, as well as giving away almost all of its consumer apps like its iWork suite ( Pages, Numbers, and Keynote), iMovie, and GarageBand, although some of these apps do offer in-app purchases for additional content, which would likely violate the spirit of Warren’s porposal. Apple’s “Pro” apps such as Final Cut X and Logic Pro X would almost certainly be prohibited, however.
It’s also an open question as to how Warren would propose that Apple’s services be handled. Apple promotes Apple Music via the App Store and its own built-in apps, and the company’s upcoming news and video services would also face similar scrutiny. Based on Warren’s comments in her post on Medium and her interview with The Verge, it would seem that her plan would necessitate Apple having to divest itself of Apple Music and possibly even Apple Pay in the same way that she suggests that Facebook cannot own Instagram and WhatsApp.
Further, although Warren’s plan focuses primarily on the internet economy, taken to its logical end, it would also require Apple to either divest itself of its retail division, in the United States at least, or stop selling its own products within its own retail stores. While Warren doesn’t mention this specifically, she does cite Amazon’s acquisition of Whole Foods and Zappos as “anti-competitive mergers” that would be need to be reversed under her plan in order to “promote healthy competition in the market.”
Warren also cites her concerns with the political power that can be exerted by the big tech companies, and suggests that breaking up these companies will not only result in a healthier economy, but also reduce their political influence — something she believes has been a factor in making the Department of Justice and the Federal Trade Commission less aggressive than they used to be. Warren hopes that her policies will bring back “a golden age of antitrust enforcement.”