CV NEWS FEED // A congressional hearing turned up a number of disturbing anti-competitive practices on the part of Google and Apple, leading to speculation that the tech giants may soon face “trust-busting” legislative actions that would considerably lessen their power.
During a Wednesday hearing, the Senate Judiciary Subcommittee on Antitrust heard from Apple and Google representatives, but also from representatives of smaller tech companies who accused the tech leaders of maintaining a monopoly through the use of threats, arbitrary fees, and throttles on the functionality of competing apps on their platforms.
Apple and Google claimed the accusations against them were unwarranted, and that the practices others described as manipulative were only policies designed to guarantee privacy and security.
The smaller firms seemed familiar with that line of argument, and repeatedly accused Google and Apple of using “security and privacy” as blanket justifications for keeping competitors down.
The Hill reports:
“When the veneer of their safety security and privacy arguments shatter under the weight of scrutiny, Apple and Google respond that they built the platforms and should be able to decide what business models they use,” said Jared Sine, chief legal officer and secretary of Match Group.
“Members of the committee, I submit that the railroad companies built the railroads. The steel companies built the steel mills. The telephone companies built the telephone lines. The creators of all of these incredible innovations each made the same argument at different times. It did not justify a monopoly then, and it should not today,” Sine added.
And:
“Apple uses privacy as a blanket excuse to subject competitors to different rules,” [Tile general counsel] Kirsten Daru said. “This is what happens when you have a monopolist acting as a defacto regulator. The regulations will always favor the monopolist. If Apple turned on us it can turn on anyone.”
Analysis
“Sen. Mike Lee’s statements at this app store hearing demonstrate what a ‘crossing the Rubicon’ moment the collective deplatforming of Parler was for the GOP,” tweeted analyst Rachel Bovard Wednesday. “As Lee points out, these companies wielded market power in a way that suggests they don’t face meaningful competition.”
“How many small businesses flounder and die, he asks, because of the possibly pretextual terms imposed on them by app store gatekeepers?” Bovard continued. “He notes the potential harm this poses to innovation, competition, and consumers. So basically, the free market.”
Sen. Mike Lee, R-UT, was the ranking member of the subcommittee holding the hearing, and seems optimistic that antitrust legislation will soon be brought to bear, curbing the power of tech companies such as Apple and Google.
As for the companies themselves, they may be signaling some vulnerability as well.
Ahead of Wednesday’s hearing, Lee wrote a letter asking Apple to explain its decision to deplatform the conservative-funded social media app Parler, which the tech company had removed nearly four months earlier based on “security” concerns.
Just two days before the hearing began, Apple reinstated Parler.