Legislation Aims to Block Amazon, Google, Apple, and More from Favoring Their Own Products and Services

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Although Epic Games has failed to convince the U.S. courts so far that Apple’s control of the App Store is breaking any laws, those laws themselves could soon change as a result of a new bill that has just moved out of committee onto the floor of the U.S. Senate.

Introduced last summer, The American Innovation and Choice Online Act is a piece of antitrust legislation that’s aimed squarely at the big tech firms. If passed, it would forbid them from favouring their own products and services over those of their competitors — something that’s been a bit of a hot-button issue among several lawmakers for some time now.

According to The Wall Street Journal (Apple News+), the Senate Judiciary Committee approved the bill today in a 16–6 vote in favour, showing strong support from both parties. This means that it will now move to the Senate floor, but it may still be a long way from becoming a reality since many Senators feel that it doesn’t go far enough, while others are concerned that it’s far too specific.

In the past, some U.S. Senators have gone so far as to suggest that Apple shouldn’t be allowed to create its own iOS apps at all, as this gives it an unfair advantage over third-party developers – this latest bill doesn’t go quite that far.

In fact, Senator Chuck Grassley (R-IA), who is the top Republican on the Judiciary Committee, stated that “This bill is not mean to break up Big Tech or destroy the products and services they offer,” rather its aim is “to prevent conduct that stifles competition.”

What’s Wrong with the Bill?

Senator Dianne Feinstein (D-CA) criticized several elements of the bill, noting that it’s “specifically designed to target a small number of specific companies, most of which are headquartered in my home state.”

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It’s difficult to see the justification for a bill that regulates the behavior of only a handful of companies while allowing everyone else to continue engaging in that exact same behavior.Senator Dianne Feinstein (D-CA)

Others worry that the bill is written too broadly, and could result in unintended “collateral damage.” Senator Mike Lee (R-UT), the top Republican on the antitrust subcommittee expressed concerns that the bill “may actually entrench the very four companies at which it is aimed by creating a strong incentive to simply cease doing any business with third parties.” The result would be to make the state of online competition even worse, rather than improving things.

What This All Means

To be clear, The American Innovation and Choice Online Act is about far more than Apple’s App Store, but there’s also no doubt that the future of iOS app distribution will get caught up in the mix.

Since the new legislation would prevent companies from favouring their own services and products, it stands to reason that the App Store would be included as one of Apple’s “favoured” services. It has the potential to open the door to sideloading, although it may still be up to the courts to interpret the legislation to determine exactly how far it goes in that regard.

The bill’s primary sponsor, Senator Amy Klobuchar (D-MN), noted that many of the provisions in the proposed legislation came out of testimony from Sonos and Tile, the latter of which was raising concerns about Apple’s AirTags being anticompetitive over a year before they were actually released.

However, the complaints raised by both Sonos and Tile focused primarily on how Google and Apple had made it difficult for their products to work on their respective platforms. In Tile’s case, the issue seemed to be largely related to Apple’s tighter privacy restrictions that prevented third-party apps from easily requesting permission to always track the user’s location in the background.

Klobuchar also pointed to reports of Amazon accessing data to copy products created by Amazon sellers and turn them into their own “Amazon Basics” products.

Time and time again we heard about how these companies abuse their power. At some point, we have to have rules of the road to make things fair.Senator Amy Klobuchar (D-MN)

Perhaps seeing the writing on the wall, Apple has been quick to open up its Find My network to third-party products, going so far as to highlight competing products from Belkin, VanMoof, and Chipolo, two weeks before it unveiled its own AirTags, making it clear that third-party products were free to participate — as long as they were willing to play by Apple’s rules, of course.

Lobbyists for Apple, Amazon, Google, and Meta have argued that the language is so broad it could end up outlawing services that consumers actually want to use. For instance, Google says it could be forbidden from showing any Google Maps results in a search, and Amazon says the current bill could be interpreted in such a way as to force it to shut down its marketplace for third-party sellers.

Apple has also expressed concerns that the bill could prevent it from requiring that apps ask permission before accessing personal data such as a user’s location — a concern that Senator Ted Cruz (R-TX) said he heard personally from a conversation he had with Apple CEO Tim Cook.

To be fair, the Judiciary Committee has added a few exceptions to address these concerns before moving the bill onward. For instance, fee-for-service subscriptions, such as Amazon Prime are excluded, as are platform features that improve functionality or users’ privacy.

Responding to concerns that the bill could put U.S. tech giants at a disadvantage over foreign competitors, the legislation was also expanded to include large foreign-owned internet platforms that operate in the U.S. However, it still only covers companies with a market cap greater than $550 billion that have more than 50 million monthly active users.

Several Senators reportedly still aren’t happy with the bill as it currently stands, so it’s quite possible it could be pared back somewhat before it even comes up for a vote. The Biden Administration also has yet to take a position on the legislation.

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