Here’s the House bill that could take a slice out of Apple

From Ben Thompson’s “The Cicilline Salvo” ($) posted Tuesday on Stratechery:

American Innovation and Choice Online Act: This bill, sponsored by Cicilline (D-RI) and co-sponsored by Lance Gooden (R-TX), bans covered platforms from giving an advantage to their own products, services, and lines of business over competitors; disadvantaging competing products, services, and lines of business; or discriminating between similarly situated business users. It further:

    • Bars any restrictions on interoperability that do not similarly apply to the platform owner
    • Explicitly bans tying (i.e. conditioning the use of one product on use of another)
    • Bans the use of data about the activities of third-party businesses to improve the platform’s own product
    • Forbids the platform from restricting the right of third-party businesses to use their own data generated on the platform
    • Requires platform owners to allow users to uninstall pre-installed applications and change defaults
    • Bans anti-steering provisions (i.e. Spotify being able to tell iOS users to subscribe online or link to the web)
    • Restricts the platform owner from treating the platform’s own products differently in search or rankings
    • Restricts the platform owner from controlling a business user’s pricing
    • Restricts the platform owner from limiting a business user’s interoperability
    • Bans retaliation by the platform owner against any business user that raises concerns with regulators

The bill does provide a privacy exception: actions that violate the above provisions can be legal if the platform owner can prove they were necessary to preserve user privacy while being narrowly tailored, non-discriminatory, and nonpretextual.

My take: Thompson does a good job in the rest of the piece to distinguish between the bills that have a chance and those (like Representative Representative Pramila Jayapal’s Ending Platform Monopolies Act) that don’t. He writes:

I suspect that Cicilline’s goal is to stake out the most extreme position — the Jayapal bill — with the goal of getting his own bill passed as a compromise… Certainly the tech industry would be right to push back against not only Jayapal’s bill but also Jeffries anti-acquisition bill; I explained in First, Do No Harm why a blanket ban on acquisitions would be so destructive to the Silicon Valley ecosystem and consumer welfare.

11 Comments

  1. Bart Yee said:
    If we are banning acquisitions, start first with leveraged buyouts or takeovers by private money “investors” who rape and pillage the company, drain it of money to enrich themselves, and load it up with debt before discarding it in the trash heap. IMO, these types of transactions have a 95% failure rate of the company while enriching these vampires.

    4
    June 15, 2021
  2. Bart Yee said:
    Well, just close down the App Store, make iPhones a completely closed software and hardware system and tell developers sorry, you’ll have to just work with Android, they do have a great majority of the market and installed base. Plus you can all band together with Epic and build a new competing platform which has super hardware, a competing operating system, and sell it with all the apps you can develop. Or go work with all those Chinese manufacturers.

    IMO, Apple can just develop its own apps and take the financial hit on its services revenue. In exchange, all the complaining IOS developers can also take the financial hit of being happy with not having a 15-30% taken off of ZERO revenue. Developers, your choice.

    9
    June 15, 2021
    • Jerry Doyle said:
      @Bart Yee: A couple of years past I proposed similarly & got lambasted in subsequent written comments. I welcomed reading your comments on the subject. None of us desire to think in terms of doing away with the App store as it is, but I do believe Apple has the uniqueness, the ingenuity and the professional ability to make the transition to its own Apple branded App Store. I want the continuity-of-integrity the Apple secured Wall-Gardened gives me. I believe in the long run Apple would be able to successfully create its own Apple App Store of apps & offerings using existing employees & through contractual relationships with Developers. This approach initially would result in a modest hit to Service revenues, but in a short period I truly believe the Apple App Store would regain those revenues & continue on its growth trajectory. This proposal is not as ludicrous as it initially may sound. Think about it and flesh it out if worse to worse comes.

      2
      June 15, 2021
      • Bart Yee said:
        @Jerry I agree with your comments. I suspect regulators would force Apple (and other developers) to put a price on the initial app lest “free” apps are advantaged competitively. IMO, all apps should also have a Freemium or In-App purchase cost menu stated right up front in the App Store listing showing at EVERY purchase opportunity the costs of a purchase. I suspect that list could be several scroll pages long for most games and other impulse buying Apps, especially those games with layers and layers of play and purchase opportunities.

        Those that may be “advantaged” would be subscription-based apps because of ease of transaction vs monthly or annual costs VS the cumulative in-app purchase costs that could be considerably more for impulsive or frequent buyers.

        0
        June 15, 2021
      • Kirk DeBernardi said:
        @ Jerry Doyle —

        Hmmm…go rogue. Maybe fly a pirate flag high above the Cupertino spaceship.

        Sound familiar everyone?

        1
        June 15, 2021
  3. Kirk DeBernardi said:
    Let’s see…

    Bars…

    Explicitly bans…

    Bans…

    Forbids…

    Requires…

    Bans…

    Restricts…

    Restricts…

    Restricts…

    Bans…

    That this App Store has been such a wonderful marketplace of creation, broad reward and utility, is it in real need of any of this?

    And if so, who “benefits”?

    Smells more of sour grapes. You certainly don’t see the consumer end of it crying out for such.

    4
    June 15, 2021
  4. Daniel Epstein said:
    Well I am sure the lawyers will make out like bandits figuring out what all this means as it goes through the legislative process and if any of it becomes law. As I have said before some of these changes make sense from a regulation standpoint but some of these solutions are as bad or worse than the problem. This could be construed as government seizure or restriction of the use of property intellectual or otherwise because you have reached a certain size and success. It seems like a mine field legally. Forcing the product to suffer in order to protect the rights of other developers to make money will be at best a mixed bag in terms of success. What if Apple decides to stop making new tools for developers to use to make apps as they don’t get any benefit from it themselves? What safety or protection to the public is being improved?

    2
    June 15, 2021
    • Jerry Doyle said:
      @Daniel Epstein: “…. Forcing the product to suffer in order to protect the rights of other developers to make money will be at best a mixed bag in terms of success.”

      Reference my comments to Bart Yee. Your words above are exactly my feelings. There are over 1 billion Apple users. I say the vast majority of us would gladly trade the existing Apple App Store for a closed software & hardware system with Apple developing its own apps with existing employees & through contracting with Developers willing to work with Apple in developing apps. This approach retains my secured and zen-like Wall Garden experience which is the reason I switched many years ago to Apple from Windows.

      4
      June 15, 2021
      • Daniel Epstein said:
        Well one thing that Apple has been dealing with and will continue to deal with is different rules for different countries. Can’t imagine what a mess it will be if there are too many different interpretations and regulations of what the App store rules are and can be by country or region. I don’t think Apple will cut off their nose to spite their face. Can’t say the same thing about the people who are writing laws like this. They don’t seem to be guaranteeing Apple or other companies which might fall under these rules anything while trying to regulate the situation.

        2
        June 15, 2021
    • Gregg Thurman said:
      I think I’m in agreement that some of the proposed sections appear to be an illegal seizure of privately owned property.

      2
      June 15, 2021
    • Kirk DeBernardi said:
      @ Daniel Epstein —

      “…protect the rights of other developers…”

      ???

      It’s a contract that developers have agreed to. Let’s not misconstrue. Soon there’ll be plenty of that to go around from all sides.

      0
      June 16, 2021

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