Publisher Trade Group Letter Calls Out Apple and Google App Stores in Antitrust Bills

Last week, a trade group representing major publishers including The New York Times, National Public Radio, News Corp. and Associated Press wrote to leaders of the Senate Judiciary Committee advocating for two bills that would curtail the dominance of tech giants in the U.S. The Open App Markets Act, aimed at Big Tech companies such as Google and Apple, is one of the bills, which aims to increase competition in the mobile app store market. “If the bill passes Congress, it will benefit publishers by giving them more leverage to avoid the App Store's 30% commission,” said Paul Gallant, a policy analyst with investment banker Cowen & Co. The publishers then can directly collect payment from users rather than going through the IOS and Android's app store and paying a commission to the tech giants. The other piece of legislation supported by Digital Content Next (DCN), the group overseeing these bills, aims to prevent companies such as Amazon and Google from giving preferential treatment to their own products when people look for products on these platforms. “Platforms should be able to moderate their services to protect consumers, police IP theft and prevent security lapses,” reads the letter from DCN. “However, some dominant platforms have leveraged their privileged status as gatekeeper to unfairly compete in other markets.” Top line According to the Open Apps Market bill, companies that operate app stores with more than 50 million U.S. users shouldn’t engage in any anticompetitive practices since it gives rise to an unfair business market that only gratifies the big, powerful gatekeepers of the market. According to the bill, punitive actions cannot be taken against developers for offering their apps at different price points through another in-app payment system or on another app store. With the bill, app stores will also allow developers to directly reach out to users for business purposes such as use of non-public business information from a third-party app to compete with the developer's app. Some in Congress think Apple and Google's app stores are anticompetitive and tend to be unfair to developers and apps such as publishing platforms, explained Gallant. Between the lines This is not the first time a publisher trade group has pushed against tech giants over what they see as a market monopoly and unfairly siphoning much-needed ad revenues. Previously, 200 publishers pushed a lawsuit against Facebook and Google alleging the tech giants control the digital advertising market and make it difficult for local newspapers to survive. But Big Tech is on its toes to keep up with pushback. Last year, Google lowered its fees for subscription app stores to 15% following criticism about 30% fees from companies including Spotify. And with the recent privacy changes by Apple and Google, Big Tech is attempting to build goodwill with Congress to halt the passing of the bill, according to Gallant. In similar efforts, Apple has voiced out its opposition to the bill, arguing that consumers could lose privacy protection due to side-loading, a practice that lets users load apps on their phones without using Apple's App Store. This could open the door to malware and would allow those app companies to avoid Apple's consumer privacy protections. Bottom line Initially, both bills saw some hesitation from Sens. Dianne Feinstein and Alex Padilla in California who were concerned that they merely targeted companies based in their state. Eventually, they both voted to advance them. Currently, the bills have momentum and recently passed the Senate panel, despite heavy lobbying, by a 20-2 vote. In the next steps, the bills need to be voted on by the full Senate, a definite timeframe for which cannot be estimated. However, “it has a solid chance of becoming law this year,” noted Gallant.