Senate Committee Passes Tech Antitrust Bill That’s Making Apple and Google Lose Their Minds

Senate Committee Passes Tech Antitrust Bill That’s Making Apple and Google Lose Their Minds
Photo: Alex Wong, Getty Images

Legislative efforts to rein in Big Tech’s alleged anti-competitive, self-preferential business practices took a big step forward on Thursday as a bipartisan group of lawmakers on the Senate Judiciary Committee voted overwhelmingly (16-6) in favour of advancing new antitrust legislation. Now, the hotly contested American Innovation and Choice Online Act will head to the Senate floor, according to The Wall Street Journal.

If passed into law, the Bill would make it illegal for tech’s largest internet companies to unfairly favour their own products and services on their platforms. In theory, this legislation could prevent Google and Apple from running their own apps in front of competitors in app stores, or make it more difficult for Amazon to sneak its AmazonBasics branded junk above other competitors on its marketplace. The bill would also require platforms to apply their terms and services rules equally to all users.

Senators made some last-minute additions to the legislation after hours of debate, such as a new provision that would include large foreign-owned platforms like ByteDance owned TikTok.

 

The Senate decision comes despite vigorous pleas from two of tech’s biggest players: Google and Apple. In a blog post published earlier this week, President, Global Affairs & Chief Legal Officer at Google, Kent Walker, claimed the legislation under consideration could “break” some of Google’s most widely used services like Search and Google Maps, and potentially damage American competitiveness.

“Antitrust law is about ensuring that companies are competing hard to build their best products for consumers,” Walker said, “But the vague and sweeping provisions of these bills would break popular products that help consumers and small businesses, only to benefit a handful of companies who brought their pleas to Washington.”

Meanwhile, in a letter sent to lawmakers by Apple around the same time, the iPhone maker claimed the antitrust efforts could lead to an increased chance of security risks for iPhone users. Specifically, Apple expressed concerns the legislation could lead to the sideloading of apps, which would give Apple less control over what apps make it to consumers. A spokesperson for Senator Amy Klobuchar’s office refuted this argument in an interview with Bloomberg this week.

“The bill does not force Apple to allow unscreened apps onto Apple devices,” the spokesperson said. “All of Apple’s arguments about ‘sideloading’ really amount to a desperate attempt to preserve their app store monopoly, which they use to charge huge fees from businesses they are competing against.”

The two tech heavyweights were reportedly so concerned over the antitrust efforts that CEOs Sundar Pichai and Tim Cook both personally contacted multiple lawmakers urging them to oppose the legislation, according to multiple Senate aides cited in a Punchbowl News Report. Texas Republican Senator Ted Cruz meanwhile reportedly spoke with Cook over the phone for 40 minutes on the eve of the vote, according to CNBC. Unsurprisingly, Cruz left the vote Thursday advocating for several new amendments, according to The Verge.

The bill was also scrutinised by a noteworthy collection of senators from across the aisle, including California Democrat Dianne Feinstein, who took issue with what she saw as laws specifically targeting a handful of companies based in her state, according to the Journal. Others like Utah Senator Mike Lee worried the bill could cause “collateral damage,” and may have unintended consequences and entrenched the biggest tech giants by, “creating a strong incentive to simply cease doing any business with third parties.” Progressive groups like Free Press also expressed some concerns that certain provisions in the legislation as written would make it more difficult for platforms to combat disinformation.

Renewed antitrust fervour is simmering across multiple avenues of the U.S. government. Just two days prior to the Senate Judiciary Committee decision, the Federal Trade Commission and the Department of Justice announced a joint public inquiry intended to revise and strengthen the agency’s mergers and acquisition guidelines. Though it’s too early to say definitely what, if any, changes will come out of those revisions, both FTC chair Lina Khan and DOJ Assistant Attorney General Jonathan Kanter have shown repeated interest in strengthening regulators’ abilities to target Big Tech’s business practice.

Among other things, the FTC and DOJ said they wanted to know if current guidelines adequately assess whether mergers are harming workers, a seeming nod to recent scrutiny of the consumer harm principle, which up until now has allowed for mergers so long as they do not result in increased prices — a principle that corporations have found is incredibly easy to game.

However, the senate’s new antitrust legislation marks a potentially much more direct threat to tech companies. Unlike FTC or DOJ rulings that can be litigated into obscurity by courts, the senate’s proposal would carry the more substantial weight of approved U.S. law. The Senate proposals would also more narrowly target the business practices used by tech’s biggest and most profitable giants.

All this renewed, bipartisan interest in reigning in Bug Tech mirrors similar sentiment among the general U.S. public. In a July 2021 poll conducted by Pew Research, 70 per cent of U.S. adults identifying as liberal democrats and 59 per cent identifying as conservative Republicans said they believed tech companies should be more than they are now. Both of those groups saw an increase in the per cent of respondents who agreed with that sentiment compared to when asked a year prior.