Category: monopoly

The five best arguments that Apple’s App Store is a monopoly

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Apple and Google testified in front of the Senate Judiciary’s Antitrust Subcommittee Wednesday, and it’s fair to say the committee members came with their A game and that Apple walked away the biggest loser. At issue are the strict rules Apple imposes on app developers for the privilege of being listed in the App Store, which is virtually the only way developers can access the huge worldwide market of iPhone users. Google may be somewhat less in the antitrust crosshairs because it allows Android users to side-load apps from other marketplaces and websites. But both Apple and Google require many developers to use their respective marketplaces’ own proprietary payment systems to sell their apps, and they charge the developers up to 30% to do so. Both Democrats and Republicans in the hearing seemed surprised at that high toll and wondered out loud whether it would be so high if the two main app stores faced more competition. The subcommittee members had clearly coordinated their efforts before the hearing and presented Apple with a wide-ranging, and nonoverlapping, set of informed and relevant questions. However, the hearing was especially fiery because some big-name app developers who have a beef with the app stores—Spotify, Tile, and Tinder’s parent, Match Group—were sitting at the witness table too. Some of the best arguments against Apple’s App Store policies came from them. Spotify’s App Store blues Case in point: Spotify’s lawyer Horacio Gutierrez pointed out that not only is his company required to use Apple’s payment system (and pay the “Apple tax”), but the music app is also prohibited from directing users of its free iOS app to online promotions offering three months of Spotify Premium for 99¢. Gutierrez called this a “gag order.” Spotify had the sympathy of Democrat Amy Klobuchar of Minnesota, the chair of the Senate Judiciary Committee’s antitrust subcommittee, even before the hearing. “[Telling people] they can get a better deal [on an app] on a website, when the companies . . . on the app store are banned from doing that, that’s pretty outrageous,” Klobuchar told me on the phone Tuesday night. Spotify has a particularly interesting viewpoint because it competes directly with Apple’s own Music service, which naturally gets more visibility in the App Store. Klobuchar called this “self-preferencing.” Gutierrez said Apple had threatened retaliation against Spotify and in some cases carried it out. He claimed Apple told Spotify straight out that it would not promote the Spotify app and forced Spotify to wait for months for app-upgrade approvals. Read More …

Amy Klobuchar: Apple, Google app store rules are “pretty outrageous”

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Executives from Apple and Google will testify in front of Congress on Wednesday, and are likely to face tough questioning about the way they manage their respective app stores. Apple’s chief compliance officer Kyle Andeer and Google’s senior director of government affairs Wilson White will appear in front of the Senate Judiciary Committee’s antitrust subcommittee, which is chaired by Democrat Amy Klobuchar of Minnesota. The hearing  comes as Congress readies legislation that could revamp antitrust law to better deal with 21st century monopolies, and better arm government agencies to enforce the law. The main topic of discussion will be the revenue sharing requirement imposed by the app stores on developers. Larger developers must pay 30% of their app or subscription revenue to Apple or Google during the first year of inclusion in their respective app stores. Many developers, whether they’ll say so publicly or not, think the 30% fee is onerous. Some have spoken out, including the music app developer Spotify, the dating app developer Match Group, and the Bluetooth tracker app developer Tile–and all will testify Wednesday. They’ll likely find some sympathetic ears on the other side of the room. You can’t argue that telling consumers they can get a better deal another way somehow jeopardizes security.” Sen. Amy Klobuchar “The 15% to 30% tax is such a whopping amount of money that the companies are charged for advertising on the app store,” Klobuchar told me on Tuesday evening. “The thing that I noticed myself was, like other consumers, I sometimes wonder why I can’t get that app on the app store–what’s wrong with that company? I never understood it until I looked at this [app store issue], and it’s because they don’t want to pay that amount of money.” Klobuchar says she hopes hopes her committee can learn some things about the app stores and the app economy by hearing both sides of the debate. But, she said, it’s also important that the public learn about the business practices of Apple and Google. She zeroes in on the fact that Apple makes it very hard for developers to avoid using its In-App Payment system, and paying the 15% to 30% fee. Read More …

When broadband monopolies pushed out scrappy local ISPs, we all suffered

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Over time, computers have become easier to use and the internet easier to access. It used to be that people needed special training to be able to use software on a machine. Now, small children can do it. Instead of a long, noisy process of connecting through dial-up, our devices can connect to the internet (and each other) instantly, without human intervention or even awareness. Mostly this is a good thing. More intuitive design means getting more people online and bringing more access to powerful tools for self-expression and community. It would be excruciating to try and use sophisticated online tools and platforms using old-school modems and routers. One advantage, though, of older technologies is that they forced us to think about what’s under the hood of the devices we use every day. The clicking, whirring, and beeping of old-school dial-up made it obvious that digital connections don’t just magically appear—they have to be built and maintained. Read More …

Google’s former ad chief is challenging its search engine monopoly

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The government is getting its antitrust game on this year after leaving it mostly dormant for the better part of two decades, and its sights are set squarely on Big Tech. Democratic Senator Amy Klobuchar from Minnesota is leading Congress’s powerful Senate Judiciary antitrust committee. “We’ve got to look at everything when it comes to putting rules in for tech,” she says Read More …

Two new bills could put a dent in technology’s ‘homework gap’

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It’s only taken a year since the onset of the pandemic, but serious help is finally coming for students and their parents who haven’t had reliable internet bandwidth for distance learning. First, a bill passed in the dying days of the Trump administration will bring $50 discounts on internet access for lower-income households. Second, the Biden administration’s first major bill will let schools and libraries share connectivity beyond their own premises. Combined, they could make a sizable dent in a problem that educational advocates identified as the “homework gap” years before the coronavirus pandemic aimed a harsh spotlight at it. “The homework gap exists in rural America, urban America, and everywhere in between,” said the Federal Communications Commission’s Jessica Rosenworcel in April 2019 , almost two years before President Biden elevated her from FCC commissioner to acting FCC chair. The first phase of help arrived with the Consolidated Appropriations Act that President Trump signed on December 27. That mammoth spending bill allocated $3.2 billion for an Emergency Broadband Benefit that will bring $50 monthly discounts ($75 on tribal lands) for internet access to cash-strapped Americans. This benefit and a one-time $100 reimbursement for computer purchases will be open to far more people than the FCC’s existing Lifeline subsidies . Beneficiaries will include parents of children eligible for free or discounted school lunches, workers whose incomes plunged since last February, Pell Grant college-aid recipients, and people who already qualify for internet providers’ low-income options. The second phase arrived with the American Rescue Plan Act that Biden signed Thursday. That sets up an Emergency Connectivity Fund of $7.171 billion to pay for schools and libraries to expand their existing connectivity beyond their own properties so that nearby students, staff, and patrons can connect wirelessly. The need is there Both of these measures promise to get millions of Americans online, although the number of millions isn’t clear yet. “The agency hasn’t published any estimates on how many households could benefit,” said Paloma Perez, press secretary for Rosenworcel, in an email. Demand clearly exists. A Morning Consult poll conducted in early March found that 16% of white adults making less than $50,000 annually had missed paying an internet-service provider bill in the last year—and that the figure among Black, Latino, and other nonwhite adults was 27%. Both programs also face big challenges, judging from such earlier broadband subsidies as Lifeline —which as of January had sign-ups only from an estimated 26% of eligible households nationwide . “More people have not used Lifeline because they don’t know about it,” says Nicol Turner-Lee, director of the Center for Technology Innovation at the Brookings Institution , a centrist policy institute in Washington Read More …