You know, I really thought the most political things were going to get over here at AppleToolBox would be over a fight between Apple and Fortnite. Over the last week, however, a committee from the House of Representatives passed six bills for Big Tech.
Regardless of how you feel about these bills (I’ll get into my own opinions later in this piece), the results are sure to be exciting. Unlike the Epic vs. Apple case, which I see as being a dud however it goes, I think this set of bills will seriously change Silicon Valley forever.
And to be clear, these bills are specifically aimed at Big Tech. That includes Microsoft, Facebook, Amazon, Google, and Apple. The bills have a clause that states these regulations (currently) only apply to tech companies that have a $600 billion market cap or greater and at least 50 million users.
It has to be both – not just one or the other. And combined, these two factors only apply to five companies in America.
In this post, I’m going to break down what each of these bills is set to change for these companies. I’ll try to cover it in plain language so that anyone can understand it. After that, I’ll give my opinions on these bills and lay out some predictions for how this might change Apple.
Also, keep in mind that I am not a lawyer or senator, so I may make a mistake here and there. I’ll be linking to reputable sources all throughout this piece so you can do your own research. I’ll also be keeping my statements on the other Big Tech companies pretty limited as Apple is my area of expertise.
Alright, let’s get started!
- What are the six bills for Big Tech?
- Are the six bills for Big Tech a good thing?
- How the six bills for Big Tech could change Apple’s business model
- What are your thoughts on the six bills for Big Tech?
What are the six bills for Big Tech?
As stated, the first thing we’re going to be covering is what these six bills for Big Tech actually are. I won’t be going too far into how effective each one will be, as we won’t know that for sure until some time goes by. But I will go through the goals of each bill and how they aim to accomplish those goals.
It’s also worth noting that even though there hasn’t been much opposition to these bills, they still haven’t been signed into law yet. There’s still a chance that they might be rejected or altered before they take full effect.
1. American Choice and Innovation Online Act
First up is the American Choice and Innovation Online Act. This bill aims to end (or at the very least reduce) the amount of preference tech companies show to their products and services on their own platforms.
For instance, let’s say Apple puts its word processing app Pages before other apps like Microsoft Word in the App Store’s search results. If Apple puts Pages at the top of the results even if the person searched for Microsoft Word and/or Microsoft Word is more popular, that could be considered Apple favoring its own products on its own platform.
In other words, if a tech company uses a separate standard to promote its content on its own marketplace, that should be stopped by the six bills for Big Tech. After all, these kinds of preferences make it harder for others to compete against these giants.
Aside from Apple, this could also reduce Amazon promoting its private-label products ahead of competitors on the Amazon Marketplace. Amazon is particularly grievous about this when it comes to its big-ticket products like Echo. Google also will be less likely to advertise Google products/services to you in your Google searches.
2. Platform Competition and Opportunity Act
The second of the six bills for Big Tech is the Platform Competition and Opportunity Act. This bill is aimed at killing anti-competitive acquisitions, which is a pretty rampant practice among the Big Tech companies.
Specifically, this bill will prevent tech companies with at least 50 million U.S.-based monthly users from holding more than a quarter of stock from their competitors. That will effectively prevent companies like Apple and Facebook from buying up companies that could compete with them.
As mentioned, Facebook is far and away the most egregious when it comes to this practice. The biggest example of this is Facebook’s acquisition of Instagram, which happened in 2012. Facebook purchased Instagram when it was still a startup for $1 billion.
That not only prevented Instagram from competing with Facebook but also made it harder for businesses like Twitter to compete with Facebook. Facebook pulled a similar move when it acquired WhatsApp.
This bill aims to prevent these acquisitions from happening in the future. It also might prevent tech companies from buying smaller tech companies that are advancing a technology that the bigger company wants to advance. As an example, Apple purchased a small search engine to improve search on the App Store.
It isn’t totally clear if these types of acquisitions will also be prevented, but I imagine that they would. Even if Apple’s goal with acquisitions like this isn’t to crush smaller competition but instead to further Apple’s research, the end result is that a small competitor is crushed.
3. Ending Platform Monopolies Act
Third is the Ending Platform Monopolies Act. This thing had the hardest time passing of the six bills for Big Tech. It took hours of debate and only passed by one vote.
I’m not surprised, given that the content of this bill is a bit vague, to say the least. Its goal is to prevent these massive tech companies from creating products and services that compete with competitors that are just getting started.
For example, if Apple notices that fitness streaming services are growing in popularity, it might be prevented from creating its own fitness streaming service. That’s because a fitness streaming service created by a company of Apple’s size would snuff out a significant amount of the competition.
This could also apply to existing products and services from the companies. The Pages, Keynote, and Numbers apps could be forced to be removed from Apple’s products. Amazon might be forced to stop selling products under the Amazon brand, and Google might have to sell YouTube to someone else.
The controversy of the Ending Platform Monopolies Act
There are two main issues that this bill creates.
First, as mentioned, it’s vague. It tells these giants to “stay in their lane” but doesn’t go into much detail on what constitutes a lane. Will this only apply to Apple’s default apps? Or will it also remove iCloud and other Apple services? Or will it mean the removal of the App Store altogether? Where is the line drawn?
It’ll be up to the FTC to determine and draw these lines, as they haven’t been made too clear in the bill itself. I expect that for the most part, the current business models of these tech giants will remain unaffected by this bill.
Apple may have to get rid of a streaming service or two, and Amazon may have to kill its private label. Mostly, though, I think this will affect things going forward, not things that have already been set in place.
Second, this bill might just end up changing the way these businesses compete with each other rather than how they compete with small businesses.
An example brought up by Gizmodo is that this bill might prevent Apple from creating a search engine to compete with Google Search. However, Google might have to get rid of YouTube, which will make it harder for YouTube to compete with Netflix.
In this scenario, we can see how Google benefits on the one hand and loses on the other. So this might just end up shifting the products and services of these Big Tech companies around to the detriment of everyone without enacting any productive change.
We’ll have to see how it plays out, I suppose!
4. Augmenting Compatibility and Competition by Enabling Service Switching Act
Next up is what I would say is probably the least controversial of the six bills for Big Tech. That’s the Augmenting Compatibility and Competition by Enabling Service Switching Act. It sounds like a terrible name until you realize it follows the old American affection for long-winded acronyms – The ACCESS Act.
The ACCESS Act is aimed at giving you more control over your data. However, unlike other regulations concerning your data, which are mostly concerned with privacy, this is directed at compatibility.
Have you ever wished that you could move all of your Facebook data to Twitter? Or, put better, have you ever kept a social media app that you don’t want to use anymore just because all of your data, friends, and family are on that app?
This act is set to solve that problem. Its goal is to make it easier to switch between different social media apps and to feel less locked into each of them.
If that sounds pretty radical, it’s because it is. I had never even considered something like this existing. So the fact that the House wrote and passed this bill has substantially increased my confidence in their ability to tackle tech issues.
To be clear, this isn’t a perfect bill. It doesn’t outline how a standard like this should be developed or how much compatibility that standard should allow for. But it’s a huge step in the right direction and sets the stage for a lot of benefits for consumers.
5. State Antitrust Enforcement Venue Act
Another non-controversial act of the six bills for Big Tech is the State Antitrust Enforcement Venue Act.
This one is pretty straightforward. It’ll make it harder for tech giants to manipulate the court system in their favor.
Google, for instance, has been trying to move a suit against it with the Texas AG to a Californian court. The goal of doing so is to hold the trial in a court friendlier to Google and to drive up the costs of the process for those involved.
We can all agree that that’s a pretty crummy practice! This act should make it harder for things like that to happen. That means that businesses like Apple and Google will be taken to task easier in the future.
6. Merger Filing Fee Modernization Act
The last of the six bills for Big Tech is the Merger Filing Fee Modernization Act. This is another straightforward bill that I don’t think anyone will have a problem with.
The act will increase the budget and powers of representatives tasked with enforcing antitrust laws on these Big Tech companies. That funding will come from the tech companies themselves. Under this act, they’ll be required to pay much higher fees whenever they make large transactions, such as merging with other companies.
In short, this will allow the government to enforce the other five bills in this sweep as well as all preexisting regulations. This way, sketchy acquisitions like the Facebook-Instagram incident will be able to be stopped.
Are the six bills for Big Tech a good thing?
Alright! That’s the gist of the six bills for Big Tech that were just passed. With that general idea in mind, I want to spend the rest of the article digging through these bills.
Let’s start with the question that should be on everyone’s mind: Are these bills a good thing?
Of course, the answer to that question depends on who you ask. I doubt Tim Cook thinks it’s a good thing that Apple is going to be regulated more strictly.
However, I’m assuming most of you are not Tim Cook, so you have a different kind of stake in these bills.
For you and me, I think that these bills are mostly a good thing. Most of the changes seem to either benefit or have little effect on users. You will probably never notice that Apple’s ability to manipulate the courts has changed, but you will notice that it’s easier to switch between tech platforms.
Below are some of the benefits I see coming from these bills.
The six bills for Big Tech will limit the political influence of Apple and company
First and foremost, I think the six bills for Big Tech are going to reduce Apple’s political influence.
You’ve probably noticed how over the last ten years, it’s started to feel like these tech companies have more influence over our lives than the government. When Apple changes something about its platform, good or bad, it affects your life.
That’s a lot of power, the kind of power unique to these companies. I’m never worried that my Frosted Flakes are going to change my life, but Apple and company could at any moment.
I think these bills are going to be the first step towards changing this. It’ll make it harder for these companies to keep dominating new niches. It’ll increase the government’s ability to nerf them. That should reduce the feeling that these tech companies are corporate overlords by at least a bit.
The six bills for Big Tech will increase competition in the tech industry
Second, I think the six bills for Big Tech will make the tech industry more competitive. If you have an idea that you think could compete with the likes of Apple, Google, Facebook, or Amazon, you probably haven’t had a shot at success, no matter how good the idea or execution.
That’s because Apple and company could crush your business in a myriad of ways. They could make you an offer that you couldn’t refuse, and take your company from you before it becomes a threat. They could market their products ahead of yours on their platforms, making it impossible for you to compete. Or they could just rip you off, integrate the rip-off into their platform, and watch you choke out.
Moving forward, all of these negative actions should be less likely to take place. It’ll make it easier for startups to compete against the giants and harder for the giants to be crummy.
That will not only lead to more tech companies rising over the next decade but should also force Apple and company to improve their service. After all, if Apple is forced to compete with startups (which it hasn’t had to do in at least a decade) then Apple will start stepping up its game.
So in the end, you’ll either get a better product from Apple or from someone else.
The six bills for Big Tech will give consumers more control and options in tech
Building on the previous point, the six bills for Big Tech should give you more control over your tech. You’ll be able to do more with your data than before. That’ll keep you from being as locked into tech services and platforms as you are now.
You should also have more options, too. More competition means more products and platforms to choose from. More control over your data means you’ll be able to change “tech camps” with more freedom. And if these Big Tech companies are broken up by these bills, then you’ll have more services and branches of these companies to choose from.
How the six bills for Big Tech could change Apple’s business model
Of course, it’s not all good. Specifically, these changes aren’t very good for Apple and its competitors. But this is an Apple blog, so we’re going to focus on the impact the changes are likely to have on Apple.
I think users will see some drawbacks as a result of these bills. The benefits should outweigh these drawbacks. But if Apple’s power is weakened, that means its services and products are going to be weakened, too.
Here are my predictions for what that might look like.
Weakening the power of the Apple ecosystem
For one thing, I think the Apple ecosystem is about to get a lot weaker. A tech ecosystem is when owning more than one product/service from a tech company gives you exclusive features.
For instance, owning a MacBook and an iPad gives you Sidecar. And using AirPods with iPhone over another pair of Bluetooth headphones gives you automatic switching between your Apple devices.
A big part of the six bills for Big Tech is to reduce the amount of nepotism that these tech companies show to their products. For Apple, that might mean that it can’t keep as tight of a grip on its ecosystem.
If you only own one or two Apple products, that might sound like a big deal. But if you’re like me and own an iPad, MacBook, AirPods, iPhone, iCloud, and Apple Music, a weaker ecosystem could actually damage your experience with Apple products.
It’ll be harder to lock people in as “Apple users”
However, I don’t think the drawbacks to the Apple ecosystem will be that significant. My prediction is that the Apple ecosystem will have just as many features as it does now. The walls keeping you locked into that system, though, might lower significantly. That will make it easier to leave or join the Apple ecosystem as you please, rather than feeling trapped in it.
That means it’ll be easier to switch between Android and iPhone. You might have less trouble moving photos and files between cloud platforms or syncing contacts on different phone operating systems.
Apple’s ability to innovate in specific sectors might be stunted
Finally, I think we might see a little less innovation from Apple. Especially in fields that Apple has traditionally struggled with. That includes Siri, search, AI, and smart homes.
In the past, Apple has generally made big strides in these areas by acquiring a startup that is working on these things. If Apple wants to improve its search engines, it buys a startup innovating a new search engine. If it wants to make Siri smarter, it buys a startup working on virtual assistants. And so on.
After the six bills for Big Tech take effect, I don’t think Apple will be able to make acquisitions like this nearly as frequently.
There are going to be regulations in place preventing these acquisitions from taking place and a team dedicated to investigating these acquisitions. And the fees associated with these mergers are going to go up dramatically.
While that’s good for competition, it might slow down Apple’s ability to improve certain aspects of its products and services.
What are your thoughts on the six bills for Big Tech?
And that’s it! That’s everything I have to offer on the six bills for Big Tech. Now, I pass it off to you – what do you think about these bills?
Whatever your thoughts, there’s no denying that these are landmark regulations for the tech industry. As far as I can tell, this is the first major legislation passed to address issues within the tech industry.
Moving forward, I would like to see even more action taken. Specifically, I’d like to see stricter privacy regulations and policies promoting the right to repair.
Until then, you can keep up on all things Apple by reading the rest of the AppleToolBox blog.
See you next time!