The Senate Judiciary Committee has overwhelmingly passed the bipartisan Open App Markets Act, according to its sponsors, Sens. Richard Blumenthal (D-Conn.) and Marsha Blackburn (R-Tenn.). The vote was 21-1 — with Sen. John Cornyn (R-Tex.) was the only nay — to favorably report the bill to a vote in the full Senate.
The legislation is billed by Blumenthal as “breaking Apple and Google’s ironclad grip on the multibillion-dollar app market,” including by stopping predatory fees on consumers and lowering barriers to rivals. Blackburn called it a response to market failure. She said she was not saying Big Tech is bad, but that it was clear that guard rails are now needed.
Defeated during the bill markup was an amendment offered by Sen. Ted Cruz (R-Tex.) that would add language about Big Tech censorship of conservative political and religious voices. Blumenthal said the bill was not about political speech but about protecting consumers.
The explicit goal of the bill is to “reduce gatekeeper power in the app economy, increase choice, improve quality, and reduce costs for consumers.”
Reading like an app net neutrality rule for Apple and Google, the legislation would prevent a covered company from restricting the use of alternative in-app payment systems; or from favoring their own terms of distribution, pricing or conditions of sale; or penalize developers for using different pricing terms or conditions via another in-app payment system.
It prevents a Google or Apple, for example, from using info derived from a third-party app to compete with that same app.
In general, reads the bill, “a covered company shall not provide unequal treatment of apps in an app store through unreasonably referencing or ranking the apps of the covered company or any of its business partners over those of other apps.” The definition of “unreasonable referencing” includes algorithms that prioritize apps owned by the covered company or its partners but does not include “clearly disclosed” ads.
Violations would be enforced by the Federal Trade Commission since those violations will be considered unfair methods of competition, which the FTC has authority to police. In addition, any state attorney general can also bring a civil action based on a violation of the act and there is also a private right of action so that any developer can also sue, and get treble damages if they win.
The bill's co-sponsors include Sens. Amy Klobuchar (D-Minn.), Marco Rubio (R-Fla.), Cynthia Lummis (R-Wyo.), Cory Booker (D-N.J.), Lindsey Graham (R-S.C.), John Kennedy (R-La.), Mazie Hirono (D-Hawaii), Josh Hawley (R-Mo.) and Dick Durbin (D-Ill.).
Praising passage was Consumer Reports, which has pushed for the legislation.
“Senators on both sides of the political aisle agree it is time to address the stranglehold that Apple and Google have on our smartphones," said Sumit Sharma, senior researcher for tech competition at Consumer Reports. "The Open App Markets Act will allow consumers to get better deals by introducing competition in payment systems on smartphones, and it will enable app developers to freely inform consumers about these cheaper alternatives.” ■
