Two bipartisan bills seeking to ban alleged anti-competitive behavior by big tech companies failed to reach a 2022 U.S. Senate vote despite an 11th-hour push to include them in the U.S. spending bill. year end presented Tuesday morning. .
The bills in question were the Open App Markets Act and the American Innovation and Choice Online Act, which would have opened the door to third-party payment systems and banned self-preference, respectively. Tech giants including Amazon, Apple, Meta and Google’s parent company Alphabet opposed the legislation and spent tens of millions of dollars on federal lobbying this year.
Lobbyists at the four companies reported more activity related to the American Online Innovation and Choice Act than any other bill in the first nine months of 2022, an OpenSecrets analysis of the disclosures found of federal lobbying. Only the Open Application Marketplaces Act tied for the bill most pushed by Apple lobbyists.
These tech companies went on an all-out offensive against the bills. Apple CEO Tim Cook and Google CEO Sundar Pichai met with members of the Senate Judiciary Committee, which passed both bills out of committee with broad bipartisan support, and aides to the Congress told Bloomberg they had received more publicity about the bills than any other. they had worked for years.
Using data from OpenSecrets, a report released Friday by the progressive group Public Citizen found that entities opposing the American Online Choice and Innovation Act spent nearly $277 million on lobbying across all issues, including the law, over the past two years. That compares with just $45 million spent by businesses and groups supporting the legislation on all federal lobbying during the same period, a six-to-one advantage.
Lobbyists opposing the American Innovation and Choice Online Act also reported more than $2.3 million in contributions to members of Congress through Oct. 19 in the 2022 election cycle, compared to only $734,000 in contributions from lobbyists supporting the act.
Although the White House made it clear that passing the Open Application Marketplaces Act is a priority before Republicans regain control of the House in January during private meetings with Senate Majority Leader Chuck Schumer (D–NY) and House Speaker Nancy Pelosi (D–Calif.), the bipartisan open markets bill did not come up for a Senate vote.
Schumer, whose daughters work for Amazon and Meta, appeared to be the lock. The majority leader told Bloomberg he didn’t believe he had the votes even though the bills’ co-sponsors, including Sens. Marsha Blackburn (R-Tenn.) and Richard Blumenthal (D-Conn.), said they had the numbers.
“Big Tech has once again exerted its insidious influence through powerful armies of lobbyists and deceptive promotional campaigns, undermining essential efforts to protect children and consumers,” Blackburn and Blumenthal wrote in a joint statement in OpenSecrets. “He has succeeded in obstructing reforms to make children safer online and to ensure a fair market for app consumers.”
The lobby was not, of course, the only nail in the coffin of the ticket. In an interview with 45 lawmakers, lobbyists, technology experts and advocates, Bloomberg heard reports of personal animosity between key lawmakers, a hierarchy of legislative priorities and old-fashioned partisan gerrymandering.
A landmark fine announced Monday morning against one of the leading proponents of the Open App Markets Act didn’t help.
On Monday, Epic Games announced an agreement to pay the Federal Trade Commission $520 million to settle a lawsuit alleging the video game company illegally collected data from children and tricked users into making purchases unwanted It is the largest fine ever issued for an FTC violation.
Epic Games agreed to pay $275 million in civil penalties, the largest civil penalty ever imposed for a violation of the Children’s Online Privacy Protection Rule, according to a press release issued by the Department of Justice. Epic Games also agreed to pay an additional $245 million to reimburse consumers the FTC alleges were misled by deceptive billing practices and “dark patterns” used to drive players to make unintended purchases while obscuring features cancellation or refund.
“We agreed to this agreement because we want Epic to be at the forefront of consumer protection and provide the best experience for our players,” Epic Games said in a press release.
Supporters ‘consistently focused’ on Open Application Marketplaces Act, senators vow to reintroduce
Since Epic Games hired its first lobbyists in January 2021, the Fortnite developer has reported spending $790,000 on federal lobbying. Natalie Muñoz, a spokeswoman for Epic Games, said OpenSecrets’ lobbying “has consistently focused on supporting the Open App Markets Act and addressing competition from app stores.”
When asked why Schumer seemed stalled in an interview with The Verge last week, Epic Games CEO Tim Sweeney said, “Well, maybe it has something to do with the sheer amount of pressure that are being done by Apple and its associated trade and lobby groups to prevent the legislation.”
Apple lobbyists reported lobbying on the Open App Markets Act and the American Innovation and Choice Online Act more than any other law in the first nine months of 2022, an OpenSecrets analysis of the disclosures found of federal lobbying. The tech giant has spent $6.5 million in the first nine months of 2022, more money than it has spent during the same period in any previous year.
An Apple spokesperson told OpenSecrets in August that the bill would “undermine the privacy and security protections our users rely on.”
Muñoz noted that Apple has faced its own legal challenges when it comes to privacy. In 2014, Apple paid $32.5 million to settle its own FTC lawsuit alleging that the company charged for in-app purchases from children without their parents’ consent. The Department of Justice is reportedly weighing an antitrust investigation into Apple.
A lawsuit by Epic Games against Apple alleges anti-competitive behavior related to third-party payment in its App Store, which would directly address the Open App Marketplace Act. The two sides appealed a September 2021 “split decision” in which a federal judge ruled that Apple is not a monopoly, but found that the company cannot restrict payments to App Store purchases.
But the Coalition for App Fairness, a nonprofit that advocates for “freedom of choice and fair competition in the app ecosystem” on behalf of its more than 70 members, rejected Apple’s claims that only the security of your App Store can protect consumers from malware and other attacks.
The coalition has reported spending $320,000 on federal lobbying in the first nine months of 2022, almost entirely focused on passing the Open Application Marketplaces Act. Epic Games, Spotify and Tile, a consumer tracking company that was acquired by Life360 in 2021, are founding members of the nonprofit. All are involved in high-profile disputes with Apple.
Their efforts won’t die with these two bills, Munoz told OpenSecrets in a written statement: “We, along with many other developers, will continue to push for competition in App Store distribution and payments.”
In a joint statement to OpenSecrets, Blackburn and Blumenthal said they plan to reintroduce the Open App Markets Act in the 118th Congress.
