Antitrust threat to Apple grows as House committee approves bill

The House Judiciary Committee has this morning approved a bill that potentially poses a significant antitrust threat to Apple.

The American Choice and Innovation Online Act would make it illegal for companies to give preferential treatment to their own products over those of competitor products hosted on the same platform. The debate began yesterday morning, and only reached a vote in the early hours of this morning …

Background

2019 saw the start of a year-long investigation into whether tech giants were guilty of anti-competitive behavior. Apple was one of the companies investigated, with Tim Cook required to testify before Congress – and was among the tech companies found to engage in “deeply disturbing” anticompetitive behavior.

Congress was initially expected to try to pass a single antitrust bill to tackle all of the issues identified, but instead for multiple bills. We’re currently up to six of these, one of which had been described as putting the entire Apple ecosystem at risk

If passed into law, it would impact Apple’s treatment of apps like Spotify, but some have suggested it could even bar the company from pre-installing its own apps on iPhones.

Democratic Representative David Cicilline says that “a proposal prohibiting tech platforms from giving an advantage to their own products over those of competitor would mean Apple can’t sell devices with pre-installed apps on its iOS operating platform.”

“It would be equally easy to download the other five apps as the Apple one so they’re not using their market dominance to favor their own products and services,” the Rhode Island Democrat said.

Antitrust threat to Apple reaches next step

The WSJ reports that the House Judiciary Committee approved the bill overnight, meaning that it will now go forward for a full vote in the House.

A House committee approved far-reaching legislation to curb the market dominance of tech giants, including Alphabet Inc.’s Google and Facebook Inc., but much of the effort faced intensive lobbying by affected firms that slowed the committee’s work and foreshadowed a pitched battle in the Senate.

The centerpiece of the six-bill package, a measure to bar big tech companies from favoring their own products in a range of circumstances on their platforms, was approved early Thursday by a vote of 24 to 20. Known as the American Choice and Innovation Online Act, the legislation would prohibit big platforms from engaging in conduct that advantages their own products or services, or disadvantages other business users, or discriminates among similarly situated business users.

Apple has been lobbying hard against the legislation, making calls, writing letters, publishing white papers, and conducting interviews to present its side of the story. I argued yesterday that Apple could have proactively headed off these threats years ago, but instead finds itself left in a defensive position.

Photo: AP Photo/Jose Luis Magana

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