New App Lobby Group Touts Independence From Google, Apple

(Bloomberg) -- Nine mobile app companies are launching a new trade group to weigh in on the nation’s most controversial tech policy issues, banding together to assert their independence from Apple Inc. and Alphabet Inc.’s Google.

Booking Holdings Inc.’s Priceline, OpenTable Inc. and Kayak, along with Perry Street Software, which operates dating applications, are among the founding members of the App Coalition. The group kicked off its operations Wednesday calling on Congress to ensure that startups can access loans and grants designed to help small businesses weather the coronavirus pandemic.

“It’s important that Congress recognizes that the multi-billion dollar app ecosystem remains vital as part of the overall efforts to restart and rebuild the economy,” Perry Street Chief Executive Officer Eric Silverberg said in a statement.

The new trade group is forming at a time when the technology lobby in Washington has split into different groups as it grapples with intensifying regulatory pressure and a proliferation of business models. Companies are confronting tricky policy questions around privacy, content moderation and competition, and the concerns of the growing app industry sometimes diverge from those of the biggest platforms and mobile phone operators they rely on.

The App Coalition’s main trade group competition is ACT-The App Association, which weighs in on policy issues affecting developers, but also counts Apple and Microsoft Corp. as sponsors, according to its website.

“The difference between our group and that group is that they’re funded by Apple, Microsoft and a host of other large technology and platform companies,” said Michael Drobac, a senior advisor of McGuireWoods Consulting LLC, the lobbying firm running the coalition. “We hope we have the same agenda and we look forward to working with them. That’s not where the funding for this is going to come from.”

Ashley Durkin-Rixey, a spokeswoman for the App Association, said that it welcomes dialogue with the new coalition, “both in agreement and not.”

Apps have occasionally chafed at living in a world shaped by the app rules written by Apple and Google’s Android. Blix Inc., a founding member of the coalition, has alleged in a lawsuit that Apple copied patented technology from its BlueMail app, then removed it from the App Store to stifle competition in violation of antitrust law.

The European Union is also looking at Spotify Technology SA’s complaint that Apple unfairly squeezes rival music-streaming services by imposing ever-changing rules and a 30% fee for apps that compete with Apple Music. In 2018, Google faced an antitrust fine from the EU and was ordered to change the way it puts search and web-browser apps onto Android mobile devices at the expense of competitors.

Google is appealing. Both Google and Apple say they face robust competition and have fostered a thriving ecosystem of apps. Google has also been blamed for troubles by travel websites.

The first priority of the coalition is making sure that apps, which often receive venture funding in their infancy, have access to the small business relief in the Paycheck Protection Program, which was a response to the spread of Covid-19.

The program has barred many tech startups by counting the employees of its funders’ other investments, putting them over the 500-worker threshold in the law, according to an April 14 letter from the coalition’s rival, the App Association. The coalition said members of Congress need to understand that they’re imperiling the companies at time when people around the world rely on apps for communication, telemedicine and entertainment amid the coronavirus lockdowns.

Among the other policy issues the group plans to focus on are privacy and content moderation. Gregory Guice, also of McGuireWoods Consulting, said the group would advocate against unnecessary intrusion by platform companies into apps to moderate content. He added that the App Coalition also plans to support laws that would spell out exactly what kind of data can be collected from users and how it can be used.

“What we want to do is ensure that consumers that use our products, our apps are getting what they expect out of those and that involves privacy and data security practices,” Guice said.

Although the group said it isn’t focused on competition issues initially, it said its long-term focus is on creating “a market free from control by artificial barriers, such as those created by gatekeepers.”

“We’re not closing the door on anything,” Drobac said. “Nothing is off the table.”

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