The Hill
By Rebecca Klar
A bill aimed at reining in Apple’s and Google’s app store market power advanced out of the Senate Judiciary Committee Thursday with support from all members of the panel except Sen. John Cornyn (R-Texas).
Other Republicans on the committee, as well as two California Democrats, expressed similar concerns as Cornyn regarding potential cybersecurity issues, though they voted to advance the bill, known as the Open App Marks Act, anyway.
It is the second major antitrust bill the committee has advanced so far this year, following the positive vote on the American Choice and Online Innovation Act last month. Although the Open App Marks Act advanced Thursday with even broader committee support, the ongoing concerns may pose hurdles for the bill if called for a full Senate floor vote.
Proponents of the bill, which is co-sponsored by a group of bipartisan senators, say it would provide guardrails for tech giants they argue are operating as gatekeepers and stifling competition through restrictive app store rules.
“It is important that our legislative agenda adapts with the times, and technology has outpaced legislation to such a grave extent that more burdensome measures are now necessary to reign in big tech. I’m not here to break up companies, but I am here to put executives and boards on notice. We’re not going to let you lobby your way out of this problem,” Sen. Marsha Blackburn (R-Tenn.) said.
The bill would restrict the owners of major app stores, like Apple and Google, from requiring users of their devices to use only their app marketplace, blocking the ability of developers to use alternative payment systems, and collecting commission fees up to 30 percent. Developers have criticized the practices and argued they are anticompetitive.
And those fees and restrictive policies in turn raise prices and limit options for consumers, said Richard Blumenthal (D-Conn.).
“If you're a consumer what this measure means to you is cheaper prices, more innovation, better products and more consumer safeguards by opening the walled garden so that new entrants are willing and able to compete on values like privacy and children's safety,” he said.
Several senators raised concerns the bill would create cybersecurity vulnerabilities — a point the tech giants and industry groups have also been hammering.
The version of the bill approved by the committee included amendments that aimed to mitigate those risks.
Chamber of Progress, a group that names Apple and Google among its corporate partners, centered its criticism on a provision of the bill allowing “sideloading,” or the ability for apps to be downloaded through third party app stores or directly from the web.
Apple does not allow apps to be downloaded on its devices from stores other than its official App Store.
“While the amendment recognizes the security concerns posed by sideloading, the amended bill would still require phone and tablet makers to open devices up to unvetted, unsecure apps,” Chamber of Progress said in the statement.
Apple similarly raised concerns about sideloading and security in a letter sent to top committee members.
“We are deeply concerned that the legislation, unless amended, would make it easier for big social media platforms to avoid the pro-consumer practices of Apple’s App Store, and allow them to continue business as usual. It does so by mandating that Apple allow the sideloading of apps and app stores that need not comply with the App Store’s pro-consumer privacy protections,” Apple wrote, according to a copy of the letter obtained by The Hill. “Instead, these companies will predictably seek to avoid the thorough review and consumer protections of the App Store and take advantage of the bill’s provisions to allow them to operate in an environment with no checks and balances.”
A spokesperson for Google did not immediately respond to a request for comment.
Among Democrats, the strongest pushback came from California Sens. Alex Padilla and Dianne Feinstein.
Feinstein called into question the scope of the bill. She said the definition seemed to “single out” companies based in her home state rather than because of its policy goals. She raised similar concerns during last month’s debate on the American Choice and Online Innovation Act.
Other amendments, including some offered by Cornyn, Sen. Ted Cruz (R-Texas) and Sen. Thom Tillis (R-N.C.), failed to be approved by the members but Blumenthal and Blackburn agreed to continue working with senators as the legislation moves forward.
The only amendment that the panel agreed to add to the bill during Thursday’s hearing was one put forward by Cruz that calls for the Federal Trade Commission (FTC) and the Justice Department’s antitrust division to create a report that analyzes and assesses the impact of the bill three years after it goes into effect.
Cornyn also pushed back on the process Democrats used to move the bill forward. He suggested the legislation is being rushed since there was not a full committee legislative hearing on the bill.
Judiciary Committee Chair Dick Durbin (D-Ill.) and Antitrust Subcommittee Chair Amy Klobuchar (D-Minn.) fiercely disputed Cornyn’s accusation that the legislation is being rushed through or that Democrats are setting a new precedent.
“I find this just another argument by the tech companies, another way to delay. They’ve delayed successfully for decades which is why we haven't done anything. So suddenly we have come up with this made up thing,” she said, adding that when Republicans were in charge of the committee more than 40 bills were considered without first holding a hearing in the full or subcommittees.
“To the contrary, we've had detailed [hearings]. This app store hearing went on for nearly three hours. We’ve actually done our work and I am proud of it,” she said.
The Coalition for App Fairness, which represents companies including Spotify, Match Group and Tile, cheered the committee's vote advancing the legislation.
“The Open App Markets Act directly addresses app store providers’ anti-competitive policies that harm developers and consumers. The bill will create a more competitive app ecosystem, maximize choice for consumers, and give needed protection to app creators who are fearful of retaliation,” the coalition said in a statement.
The coalition, and the apps it represents, had been strongly pushing for the legislation. Executives from Spotify, Match and Tile testified at a hearing on the app store market power last year and encouraged Congress to take action to regulate the dominant companies.
Executives for Apple and Google defended their app store policies at last year’s hearing, arguing they help keep users safe and secure and are not anticompetitive.
A companion bill to the one approved by the committee was introduced in the House in August.
Momentum has been building in Congress to revamp the antitrust laws that some members argue are outdated and fail to address the tech platforms.
A slate of other bills that advanced out of the House Judiciary committee last year, including a companion to the American Choice and Online Innovation Act, address other concerns critics raise about antitrust laws being outdated. The bills, however, have stalled due to some backlash on both sides of the aisle.
