A big new report by the Democrat-led US House of Representatives has slammed Apple, Amazon, Facebook and Google for what it describes as “monopolistic” practices – and perhaps most notably, criticised Apple’s 30 per cent App Store cut.
That cut is, of course, a key issue in the ongoing Epic Games versus Apple lawsuit, a case which looks likely to drag on well into next year.
At 449 pages, the report takes its time to argue each of the aforementioned companies controls the lion’s share of their particular market, be it Apple’s mobile operating system, Google’s online search and advertising, Facebook’s social network and advertising, or Amazon’s dominance over the online retail market.
“To put it simply, companies that once were scrappy, underdog startups that challenged the status quo have become the kinds of monopolies we last saw in the era of oil barons and railroad tycoons,” the report begins (thanks, GamesIndustry.biz).
“Although these firms have delivered clear benefits to society, the dominance of Amazon, Apple, Facebook, and Google has come at a price. These firms typically run the marketplace while also competing in it – a position that enables them to write one set of rules for others, while they play by another, or to engage in a form of their own private quasi regulation that is unaccountable to anyone but themselves.”
The Epic Games versus Apple fight is mentioned as part of the report, and specifically Apple’s refusal to allow Fortnite to offer an alternative payment method circumventing the App Store’s cut. None of this has gone unnoticed by Epic Games, of course, and its boss Tim Sweeney retweeted several posts sharing portions of the report on Twitter last night:
Here’s the relevant section about Apple. Report says it holds “gatekeeper” and “monopoly power” because of its hold over iOS. pic.twitter.com/bnBE3fovot
— James Clayton (@JamesClayton5) October 6, 2020
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According to congress, Apple ?exerts monopoly power in the mobile app store market,? which ?has resulted in harms to competitors and competition, reducing quality and innovation among app developers, and increasing prices & reducing choices for consumers.? https://t.co/SR7H51LCuP pic.twitter.com/CBrTjEoMLN
— Riles ? (@rileytestut) October 6, 2020
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The report suggests reforms are needed, including measures to limit these companies’ ability to encroach on competitors, and stricter rules to prevent further dominance from additional acquisitions.
So, how impactful will this report actually be? Well, it’s worth remembering this is a House of Representatives-led effort which simply offers suggestions. It’s tough to see increased regulation getting much Republican approval – and indeed, the House Judiciary Committee has already published a response agreeing with various points of the report but disagreeing with many of its recommendations. And, of course, it’s tough to say how any of this will pan out yet with the US election on the horizon.
Writing on Twitter last night, US lawyer and host of video game law podcast Virtual Legality Richard Hoeg said it appeared to be “a harbinger of a tumultuous period yet to come”.
So, this is a political document (Democrat-led), and should be taken as such, but it is certainly interesting to see a major House committee declare effectively all current Big Tech companies as monopoly abusers in violation of antitrust laws. https://t.co/CoJwyZSbeq
— Richard Hoeg (@HoegLaw) October 6, 2020
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“It certainly suggests that a Democrat-led Department of Justice would intend to knock some heads in Big Tech (and that Apple vs Epic will get a bit wilder before the end),” Hoeg concluded.
“But it is very much worth noting that this is not a legally binding conclusion. If/when DoJ sues one of these parties on these terms they will have to make (and prove) their case to a judge (or, on appeal, judges).”
