Here’s how Congress proposes to regulate Apple’s App Store (video)

Rep. David Cicilline would prohibit tech giants from running a platform and competing on it at the same time.

From Bloomberg’s “Key Lawmaker Vows to Loosen Big Tech’s ‘Deeply Disturbing’ Grip” posted Wednesday evening:

Representative David Cicilline, the Democrat leading a high-profile investigation into technology giants including Facebook Inc. and Amazon.com Inc. is poised to deliver recommendations as soon as next month that will take aim at the power of digital behemoths and could lead to the overhaul of antitrust laws.

Cicilline said in an interview Wednesday that his inquiry has confirmed that Alphabet Inc.’s Google, Apple Inc., Amazon and Facebook are abusing their market power to crush competitors and that Congress must act urgently to rein them in to protect consumers.

“All of these companies engage in behavior which is deeply disturbing and requires Congress to take action,” said Cicilline, the chairman of the House antitrust panel. “The kind of common theme is the abuse of their market power to maintain their market dominance, to crush competitors, to exclude folks from their platform and to earn monopoly rents.”

One possibility is what he described as a Glass-Steagall law for technology platforms. That Depression-era law separated commercial and investment banking until it was repealed during the Clinton administration. For tech companies, it would mean prohibiting them from running a platform and competing on it at the same time.

Cue the video:

My take: Lobbyists, start your engines.

27 Comments

  1. Jacob Feenstra said:
    “Rep. David Cicilline would prohibit tech giants from running a platform and competing on it at the same time.”

    Wow. Brilliant. How about groceries stores who have home brands—and butchery and bakery—and have other brands on their shelves? How about brewery outlets that sell only their own beers? How about malls that have their own stores or entertainment centers and tenants? If you want to open that can of worms you have your work cut out for you.

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    August 27, 2020
  2. Robert Harris said:
    Your take is correct they do these things to get the money. It’s as close to capitalism as most politicians ever get. Most just live off government until they retire with a pension and health benefits. The cycle starts over again and they become lobbyists. No real idea what it takes to run a company or make a payroll.

    4
    August 27, 2020
  3. Joe Murphy said:
    Congress’s answer is creating separate laws just for the tech industry thereby avoiding, reducing, even eliminating protests from other groups.

    Apple has available, what seems to me, a viable alternative — carry their products either in iOS: Settings or Apple Store.

    Granted, not perfect but good. Certainly better than what it sounds like Congress will do. The government has a proven track record of being heavy handed.

    What do you think?

    0
    August 27, 2020
  4. Fred Stein said:
    He offers rhetoric. He has no reasoning ability.

    “crush competitors”: Just the opposite. Indeed Epic’s success is due to Apple’s, and other vendors’, platforms. Total growth of non-Apple Apps is easily 10% annually. 23 million App developers – ‘nuf said.

    “‘monopoly rents”: This notion collapses in any comparative analysis, unless one cherry picks that data and discard all fees 30% and above.

    5
    August 27, 2020
  5. Fred Stein said:
    While I agree we need some scrutiny and some regulation. Rep C’s proposal is not it.

    Rep C’s sledgehammer proposal shows us the challenge. How do we prevent abuse? That is a really hard problem.

    Rep C relies on rhetoric and distortion to make his simplistic solution look OK.

    4
    August 27, 2020
    • John Konopka said:
      Apple could play dirty if it wanted. They could keep a lot of APIs just for themselves to always make their apps faster and more reliable. Basically they could turn all developers into their farm team.

      I’m not much interested in seeing restrictions on the App Store implemented as law. I’m OK with the legal process but it reacts too slowly to deal with fast changing tech. The App Store is not a flash in the pan. We will have this as part of our economy for a long time. It is in everyone’s interest to have a way to balance the interests of Apple and developers.

      Maybe Apple could setup their own ombudsman or some sort of nonbinding negotiation process to give developers a stronger voice and to provide more transparency to Apple’s decisions.

      The issue of “sherlocking” is thornier. There is not a bright line between Apple products and 3rd party apps. Some things, like the flashlight app, make total sense as part of iOS. Just because Apple didn’t include it out of the gate doesn’t mean they never should include it. If you want to start restricting Apple from competing where do you draw the line? Should Apple only make the OS? What’s part of the OS? What is an OS?

      I never imagined Apple would make an ECG product, but for the Watch it makes perfect sense. If you try to restrict Apple today in ways that make sense today you may inadvertently kill future products that aren’t yet imagined.

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      August 27, 2020
  6. Gregg Thurman said:
    If it ain’t broke don’t fix it.

    If there is no abuse you can’t prevent It.

    With idiot logic like that being espoused you can be assured that idiot legislation will follow. My feeling is that, ultimately, this issue is headed to the Supreme Court.

    As a side note 30% isn’t the issue, the complainers would complain ifcharged 25%, 20%, or 15%. They want free access to Apple’s customers.

    10
    August 27, 2020
    • Fred Stein said:
      Good point about the fee. The “plaintiffs” want to use legislation or the DoJ to take their side in their negotiations. W.r.t. Apple, there is no case for monopoly, restraint of trade, etc.

      Epic, in particular, wants to set up a store within Apple’s store to compete with Apple. They want to pay no commission, no insurance, and no rent for the software and hardware that deliver their customers experiences. Indeed, their 12% fee (which they can raise anytime) only makes sense if Apple gets zero. We’re talking pennies on the dollar, literally.

      3
      August 27, 2020
  7. Dan Scropos said:
    This is why the “sharks” on Shark Tank get a cut. They bring tremendous value. If you do it without them, you make virtually nothing. But with them, and their corresponding cut, your addressable audience becomes massive.

    Apple doesn’t mandate a cut. They mandate a cut only if the developer charges. This is clearly a case of biting the hand that’s fed you.

    This is the gratitude that Apple gets for building the greatest platform in history? Think about what this will look like in 5,10 or 20 years. Health apps will change the world. Apple did that. Not Epic.

    2
    August 27, 2020
  8. Kirk DeBernardi said:
    Would I be correct that “Windows” would have to divest itself of “Office” if Mr. Cicilline‘s logic wins out?

    Doesn’t one exist because of the other?

    Didn’t “Office” make “Windows” the thing? Or was it the other way around?

    What’s the difference of iOS offering the App Store?

    Clarifications requested, please.

    3
    August 27, 2020
    • Fred Stein said:
      Good points. Office is decoupled. We can use Office on the Mac or in the cloud. Likewise, we can use Google’s cloud equivalent from Windows. And yes, Office and Windows help each other. They make each other stickier. Neither are monopolies. We could compare this to Disney’s theme parks and their branded characters – no I’m not being funny.

      The DoJ did force MSFT to uncouple Window and IE. That forced coupling was anti-competitive.

      0
      August 27, 2020
      • Kirk DeBernardi said:
        @ Fred S. —

        I’m staunchly in the camp that it’s Apple’s damn App Store and they can run it any way they damn-well please and it is now (pick one)…

        • success
        • size
        • influence
        • power
        • platform ubiquity

        …that has qualified it as an everyman’s utility now “unquestionably” ripe for control.

        Outside of Apple not treating everyone the same, the only push-back that makes any sense to me is the argument that one is free to get their apps independently paid for and downloadable from most anywhere through the MacOS — so why not on iOS?

        1
        August 27, 2020
        • Kirk DeBernardi said:
          Personally, I prefer and will pay the premium for the quality-safety-security-curation that is iOS w/o the outside meddling, thank you.

          2
          August 27, 2020
  9. Gregg Thurman said:
    Listening to the video, the issues he speaks of are relative to Amazon and Facebook, not Apple.

    We’ve discussed anti-trust re: Amazon many times here. I personally believe that Amazon is clearly a monopolist.

    3
    August 27, 2020
    • S Lawton said:
      And how is Amazon a monopoly?

      0
      August 27, 2020
    • Fred Stein said:
      Yes, and that is why my comment about “potential” abuse. Broadly speaking, the digital transformation has this potential. Apple’s ethical grounding mitigates the risk. Try convincing Rep C. hmm.

      0
      August 27, 2020
  10. David Emery said:
    Hmmm… If Apple were prohibited from -selling- products, would it also be prohibited from -giving them away-?

    Actually, a rule that says you can’t sell/give away products AND restrict similar products from your store might be worth supporting. It annoys me no end I can’t buy Kindle books on my iPad. (And usually I check Apple bookstore, and the Kindle store is cheaper. That’s when I truly regret the failure of the ‘can’t sell cheaper than Apple store’ clause!)

    0
    August 27, 2020
  11. Fred Stein said:
    Back again.

    Walmart’s on-line sales surged 74% in the quarter ending May 2, 2020. Chewy, all on-line, grew 46% same quarter. Not crushed by Amazon.

    We could on and on blowing holes in Rep C’s assertions.

    1
    August 27, 2020

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