Apple Inc. is in Washington’s crosshairs as new legislation ramps up that would curb the revenue the tech giant collects through its App Store.
The Senate Judiciary Committee voted 20-2 this month to advance legislation that could reduce the fees Apple collects on digital app revenues. CEO Tim Cook called senators earlier this month in an effort to hinder the progress of the bill, saying that it would hurt user privacy and security.
Apple has argued that it provides a digital ecosystem that users want and that the fees it collects—up to 30% of transactions—are fair for the technology it is providing, according to the Wall Street Journal.
The Bigger Picture
Lawmakers in both parties are united on the bill, using the legislation as a stepping stone to greater regulation of the tech sector. Most legislators agree that Big Tech should be reigned in, but have yet to reach a consensus on how to do so. Apple is just the latest company to be targeted in the greater debate on anti-trust laws, power in the marketplace, online privacy, and freedom of speech on social media.
Apple’s rivals, including Epic Games Inc. and Microsoft Corp. are backing the bill – a tactic that could backfire considering the larger effort to regulate the industry.
Joining the Fray
Until now, Apple has largely avoided Washington’s crackdown. Cook’s relationship with Donald Trump’s family even exempted Apple from some of the tariffs imposed by the former president.
Facebook (now Meta Platforms inc.) has been the primary recipient of Congress’s wrath, with CEO Mark Zuckerburg testifying on several Senate and House Committee hearings for scandals from privacy breaches to the military of Myanmar using Facebook for communication during the Rohingya genocide.
“For a long time, Apple floated above the fray in Washington,” said Paul Gallant, a policy analyst with Cowen & Co, adding that the company has now “been pulled down into the muck.”
Apple is also being fined €5 million ($5.7 million) on a weekly basis by Dutch antitrust watchdog Authority for Consumers and Markets. The fine is being incurred for not allowing local dating apps to use third-party payment providers, instead mandating the apps use Apple’s commission fee-based payment infrastructure.