Apple, Google App Store Dominance Targeted in Senate Proposal
(Bloomberg) -- U.S. lawmakers introduced bipartisan legislation that would impose new rules on how Apple Inc. and Alphabet Inc.’s Google run their app stores following complaints from software developers that the companies are abusing their dominance over the digital marketplaces.
The bill proposed Wednesday in the Senate takes aim at the tight grip Apple and Google have over the distribution of apps on mobile devices. The two have an effective duopoly in the mobile app market outside China and have come under increasing antitrust scrutiny by lawmakers and competition authorities around the world.
“This legislation will tear down coercive anticompetitive walls in the app economy, giving consumers more choices and smaller startup tech companies a fighting chance,” said Democratic Senator Richard Blumenthal of Connecticut, one of the bill’s sponsors. “For years, Apple and Google have squashed competitors and kept consumers in the dark -- pocketing hefty windfalls while acting as supposedly benevolent gatekeepers of this multibillion-dollar market.”
The proposal joins a raft of measures moving their way through Congress that are intended to rein in the power that tech giants have over the digital economy and would radically reshape how they do business. The proposals are aimed at Apple, Google, Amazon.com Inc., and Facebook Inc., which were all accused in a House investigation of choking off competition.
The bill introduced Wednesday would allow software developers to tell consumers about lower prices available elsewhere and ensure users have alternative methods of installing apps, known as “sideloading,” according to the lawmakers’ statement. It would also “open up competitive avenues” competing app stores on mobile devices, they said.
Google declined to comment on the legislation, which is also sponsored by Republican Senator Marsha Blackburn of Tennessee and Democratic Senator Amy Klobuchar of Minnesota. Apple didn’t comment specifically on the bill but said in a statement that the company’s focus is maintaining an app store where consumers can “have confidence that every app must meet our rigorous guidelines and their privacy and security is protected.”
Tech industry group NetChoice, which counts Google among its members, said in a statement that the proposal would weaken security and privacy protections for consumers.
Paul Gallant, an analyst at Cowen & Co., said in a note that the bill has a realistic chance of passing given that it’s bipartisan and could become a compromise if other antitrust legislation that would apply more broadly to Amazon and Facebook fails to gain enough support.
“It won’t be opposed by Amazon and Facebook -- and might even be quietly supported by them to steer Congress away from more problematic bills,” he said.
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