Big Tech Warns Against New Antitrust Legislation Claiming that it will Threaten Privacy of Users

January 26, 2022

The recent Facebook whistle-blower allegations sparked action in Congress with the introduction of new bills to attempt to regulate the tech industry.

The bill that was cosponsored by Minnesota Democrat Amy Klobuchar and Iowa Republican Chuck Grassley seeks to destroy the technological monopolies and encourage competition in a market that has been monopolized for so long. The proposal would prohibit tech giants such as Amazon, Apple, Facebook, and Google from boosting their own services and products over those of rivals on their platforms. It would stop these companies from using data to hurt their smaller competition. This bill is meant to update competition laws to the modern, digital age. Klobuchar, when justifying the need for these restrictions, stated that “there has been a major assault on competition, and our country is built on open markets and fair competition.”

The proposal would prohibit tech giants such as Amazon, Apple, Facebook, and Google from boosting their own services and products over those of rivals on their platform.

As to be expected, smaller tech companies applaud the bill for helping to restore the competition within the digital market. Mark Pincus, founder of Sonos Inc., Yelp Inc., and Zynga Inc., stated that these tech giants are “abusing their gatekeeper status to give themselves and their partner’s preferential treatment and access on their platforms.” 

Recently, Apple replied to the legislation with a letter expressing their concerns with the enactment of such restrictions and prohibitions. The first issue addresses how the changes would allow for Apple users to install apps outside of the App Store or engage in something known as ‘sideloading’. This ‘sideloading’ would disrupt Apple’s privacy and security stance and would impact elements of its business model. For instance, Apple contends that the new legislation will put its app tracking transparency feature in danger even though it has received positive reviews from users. Apple’s senior director of government affairs, Tim Powderly, accounts that the proposed legislation would make protecting the privacy and security of users much harder, which would be counterintuitive to the actions that the government should be taking due to the past year of controversies. Also, Google argues that it would put a major strain on its most popular products such as Google Search and Gmail and cause their contributions to be less useful and secure for consumers. A spokesperson for Klobuchar refuted Apple’s claim regarding the issue of ‘sideloading’. The individual argued that the new legislation did not require or force Apple into including unscreened applications on to their devices, thus risking privacy and security issues. The representative believed that this argument was an attempt to preserve the app store monopoly. The spokesperson went even further to state that Apple, being a multitrillion-dollar company, was perfectly capable to ensure that privacy and security of its users was maintained even with the enactment of this legislation.

Apple urges senators to include language that allows conduct that “increases consumer welfare,” which is the typical standard for antitrust enforcement. Although Apple urges for the inclusion of this language, the Senate version specifically omitted it due to the belief that it created “too big of a loophole for companies.”

There has been no official endorsement from the White House regarding this legislation, but the press secretary did insinuate a general approval. She stated that President Joe Biden is “encouraged to see bipartisan interest in Congress in passing legislation to address the power of tech platforms through antitrust legislation and to protect privacy.” This proposal is like a bill that was approved by The House Judiciary Committee in June of 2021. In contrast to the House version, the Senate version includes different language and simplifies the penalties to ensure that tech companies will be able to “improve their products without fear of violating the law.” Although this proposal is similar to that made in the House previously, the House bill was stalled to focus on other priorities such as government funding and infrastructure bills. The bill is to be considered by the Senate Judiciary Committee as soon as this week.    

Cassandra Zietlow

Cassandra Zietlow is a second-year law student from Raleigh, NC. She graduated from UNC in 2020 with a Bachelor of Arts degree in Public Policy and Political Science. In addition to being a staff writer for JOLT, Cassandra is a member of the Sports Moot Court Team, Vice-President of Law Students Against Sexual and Domestic Violence, and Marketing Coordinator for Women in Law.  

See the author’s previous blog post here.