The four horsemen of tech are sending proxies to Washington

Apple’s guy, Kyle Andeer, worked for both DOJ and FTC before coming to Cupertino.

From “Apple, Amazon, Facebook and Google to testify to Congress on antitrust” in Wednesday’s Washington Post.

Apple, Amazon, Facebook and Google have been summoned to Capitol Hill to testify next week as part of House lawmakers’ wide-ranging investigation into big tech companies and the threats they may pose to competition.

The hearing, scheduled for July 16 in front of the House Judiciary Committee’s subcommittee that deals with antitrust, will bring simmering Democratic and Republican frustrations with Silicon Valley into public view, potentially setting the stage for further scrutiny — or regulation — of an industry that’s long insisted that its size doesn’t harm rivals or consumers.

Scheduled to testify are Kyle Andeer, Apple’s vice president for corporate law and chief compliance officer; Nate Sutton, an associate general counsel at Amazon; Matt Perault, the head of global policy development at Facebook; and Adam Cohen, the director of economic policy at Google…

House lawmakers embarked on their sweeping antitrust investigation of Silicon Valley in June, expressing rare, bipartisan alarm then that “dominant, unregulated platforms have extraordinary power over commerce, communication and information online.” They pledged not only to review Apple, Amazon, Facebook and Google but the government’s own competition laws and enforcement agencies, part of an effort to determine if the industry had come to wield dangerous “monopoly power” without repercussion.

First comment, posted by “Average every day common sense Joe”:

Apple doesn’t have a big enough market share to even come close to trigger anti-trust action.

My take: Depends how the market is defined. The way Spotify sees it, the App Store is a market unto itself. If that’s where Congress is headed regarding the regulation of platforms, all bets are off.

6 Comments

  1. Gregg Thurman said:

    “The way Spotify sees it, the App Store is a market unto itself.”

    So what? Now if Spotify had no other [effective] way to reach potential subscribers it might have an argument. The deal is that it has at least two very viable ways to reach potential subscribers: 1/ going direct via the internet (that is ubiquitous) and 2/ through Android Stores and possibly Amazon (although I don’t see the latter as being realistic).

    The question that Spotify raises is Apple’s refusal to allow apps that it hasn’t curated to protect subscribers from malware and unbridled data collection. Without that authorization from Apple, Spotify’s ability to go direct to iOS users is denied.

    The counter argument is that WalMart offers Green Giant vegetables AND (importantly) its own private label. Also, Green Giant guarantees WalMart X$ Revenue per square foot of shelf space.

    This guarantee is a long standing practice in the food distribution industry that effectively denies smaller (regional?) manufacturers access to WalMart customers. The practice has decades long legal history supporting it.

    Apple does not demand a revenue guarantee, to the contrary, if Spotify chose to offer its service for free Apple would allow it.

    The issue is that Spotify wants access to iOS users without paying Apple’s 30% fee (first year 15% thereafter).

    I can’t think of an argument that would have Apple violating the Sherman Anti-trust Act, without changing the Act (which would then be subject to Supreme Court review and cause John Adams to rollover in his grave).

    There are no precedents supporting Spotify’s view in US jurisprudence.

    3
    July 10, 2019
  2. Robert Paul Leitao said:

    In my view, Spotify’s big challenge isn’t Apple’s distribution fee. It’s how to turn a profit. Recent public statements by Apple suggest Spotify pays such a small amount of its revenue to Apple for distribution through the App Store it’s essentially an immaterial number. In other words, Spotify’s claims are nothing but a red herring thrown on the trail to mislead the public and distract anti-trust regulators.

    The majority of Apple’s App Store revenue is generated from games. That is slowly changing over time as hardware advances and continued iOS development provide developers with the most robust environment on the planet to craft and deliver solutions. It’s best to look beyond the headlines and evaluate the facts.

    While App Store revenue is an important component of Services revenue, there’s much more to Apple’s fastest-growing revenue segment than distribution fees. In my view, complaints about Apple’s distribution fee model are less about the fees and more about the desires of some developers to have unfettered access to Apple customers and the data of device owners without the quality control Apple demands to safeguard user privacy and security.

    3
    July 10, 2019
    • Jerry W Doyle said:

      @Robert Paul Leitao: “… and more about the desires of some developers to have unfettered access to Apple customers and the data of device owners without the quality control Apple demands to safeguard user privacy & security.”

      Robert, if you read this request would you be so kind as to expound on that statement of yours as I am puzzled by its implications, if I understand the issue as unfolding.

      Congress wants to limit parties’ (developers) access to consumer data & protect consumers’ privacy & security. Congressional Hearings already are targeting that very desire with bipartisan support. Some presidential candidates are running for office targeting that very desire. So, Apple already has Congressional bipartisan support and I suppose (at least I hope for an outcome as such) will prevail with judicial support in the courts.

      0
      July 11, 2019
      • David Emery said:

        Depending on Congress to solve privacy problems within the next 6 years is a very risky bet (independent of who wins in 2020.)

        0
        July 11, 2019
        • Jerry W Doyle said:

          @David Emery: I disagree respectfully with your statement David. With bipartisanship support for new legislation targeting this area the time frame for introducing a bill and getting it moved through both Houses of Congress and to the president for signing is reduced significantly, and nowhere near a six year period as you suggest. It can be done in one session.

          0
          July 11, 2019
  3. Jerry W Doyle said:

    “… In my view, complaints about Apple’s distribution fee model are less about the fees and more about the desires of some developers to have unfettered access to Apple customers and the data of device owners without the quality control Apple demands to safeguard user privacy and security.”

    Let me provide with more specificity my question to Robert Paul Leitao. The view Robert Paul states may very well have merit. If that is the desires (strategy) of some developers (to have unfettered access to Apple customers and the data of device owners without the quality control of Apple to safeguard user privacy and security), then that desire (strategy) is a “losing” strategy. It is not going to happen in this legislative environment involving bipartisan support.

    0
    July 11, 2019

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