Apple slams proposed antitrust legislation in scathing letter to committee

Apple slams proposed antitrust legislation in scathing letter to committee

“We write today to provide a high-level overview of the harms these bills present”

What you need to know

  • Apple has written to the House Committee on the Judiciary to warn of the harm posed by emerging antitrust legislation.
  • Apple says the bills would create a “race to the bottom for security and privacy”.
  • Apple says the move would not promote competition and would hamper innovation.

Apple’s Senior Director for Government Affairs in the Americas, Timothy Powderly, has written an open letter to the House Committee on the Judiciary’s Subcommittee on antitrust to blast proposed antitrust legislation changes it says will harm competition and innovation on iOS and the App Store.

In the letter Apple states “We are concerned that many provisions of the recent package of antitrust reform legislation would create a race to the bottom for security and privacy, while also undermining innovation and competition. We write today to provide a high-level overview of the harms these bills present.”

Apple claims the legislation “would undermine consumers’ ability to choose products that offer state-of-the-art privacy and security”, and that mandating sideloading on iOS “would prevent Apple from continuing to offer consumers this more secure choice, reducing competition and decreasing consumer welfare.”

Apple also says that “requiring Apple to provide developers all user data generated through the use of an app poses immense risks to privacy”, and that Congress should consider measures to increase, rather than decrease digital security. The company also states legislation mandating interoperability would “severely burden platforms’ incentives to innovate”.

Apple has already published its paper on the dangers of allowing sideloading on iOS, which it says would totally undermine the security and privacy of the iPhone and iOS.

You can read the full text of the letter provided to iMore below:

June 22, 2021

The Honorable Jerrold Nadler, Chair
The Honorable Jim Jordan, Ranking Member
House Committee on the Judiciary

The Honorable David N. Cicilline, Chair
The Honorable Ken Buck, Ranking Member
House Committee on the Judiciary
Subcommittee on Antitrust, Commercial, and Administrative Law

Dear Chairmen Nadler and Cicilline, and Ranking Members Jordan and Buck:

Apple has appreciated the opportunity to engage with the House Judiciary
Committee and its Subcommittee on Antitrust, Commercial, and Administrative Law on
our shared objective of ensuring that U.S. laws and Apple’s business practices promote
competition, foster innovation, and provide benefits and critical protections to consumers.

The App Store creates competition, and it is a place where all developers—no
matter their size—can turn their passion and creativity into a thriving business. The App
Store offers customers access to nearly 2 million apps, and it supports more than 2.1
million jobs across all 50 states. We are concerned that many provisions of the recent
package of antitrust reform legislation would create a race to the bottom for security
and privacy, while also undermining innovation and competition. We write today to provide a high-level overview of the harms these bills present.

The Legislation Would Undermine Consumers’ Ability To Choose Products That
Offer State-of-the-Art Privacy And Security.

• Consumers are not one-size-fits-all, and Congress should not mandate smartphones
to be one-size-fits all, either. Apple offers consumers a choice of a smartphone that
offers the best possible security, privacy and performance. The iPhone is uniquely
suited to those who don’t want to balance risk every time they download an app.
Some customers might want to do that, but Congress should not force that model on
everyone. Legislation that would mandate that Apple allow sideloading would prevent
Apple from continuing to offer consumers this more secure choice, reducing competition and decreasing consumer welfare. Enclosed with this letter is a more detailed
document that outlines why proposals to require the sideloading of software on
Apple devices is detrimental to consumer privacy and security.

• Requiring Apple to provide developers all user data generated through the use of an
app poses immense risks to privacy. For instance, when apps track a user without
her knowledge, her data could be spread far and wide without her consent. Apple’s
App Store rules help prevent that. Consumers have a right to control their data; it is
not Apple’s role to give away data to developers eager to monetize it.

• With cyberattacks on the rise, Congress should consider measures to increase, not
decrease, digital security. Today, if an app surreptitiously collects user data, Apple
is able to take steps to address that behavior—whereas current proposals would tie
Apple’s hands. Further, sideloaded apps can carry ransomware, or trick users into
downloading fake versions of popular apps that can steal login credentials and spy on
users. This legislation will make it easier for criminal actors to put iPhone users at
risk.

• Parents have enough to worry about while protecting their children in the digital
world, and Congress should not add to this burden by mandating that the iPhone be
opened to less secure apps. Parents rely on Apple’s secure ecosystem to guard
against apps that would sell a child’s data or expose a child to inappropriate content.
In addition, proposals that target in-app purchasing would severely limit the effectiveness of child safety features such as “Ask to Buy” parental controls, purchase
history, and Family Sharing. These features are critical for enabling parents to monitor sales to children.

The Legislation Would Not Promote Competition.

• Of the nearly 2 million apps on the App Store, Apple offers approximately 70, and the
vast majority of them are free. We face strong competition from very successful developers in every category in which we offer our own apps, from music to maps to
weather.

• Apple’s structural incentive is to promote more and greater quality apps and facilitate
competition. We attract customers to the iPhone by continually improving its core
features, including the App Store’s many offerings. We support all developers, including those that compete with some Apple services, because innovation on the
App Store is great for customers and attracts them to the iPhone. The record of success on the App Store for third party apps speaks for itself. We have no incentive to
discriminate against developers and broad mandates against disparate treatment of
apps at all could skew the competitive landscape on the App Store.

• Apple provides developers access to technology to create quality apps because
better App Store offerings means greater customer satisfaction. Apple therefore only
limits developer access to application programming interfaces if there is an
independent compelling justification, such as safety or device performance. A good
example of this is access to sensitive health data or to accessibility tools that can
read emails aloud. Developers also rely on the App Store’s protections. Apple works
hard to ensure app safety, so developers can focus on building apps while benefiting
from the iPhone’s reputation for security. Congress should not force Apple to give
unfettered access to core technologies that could be abused to harm consumers and
put them at risk.

The Legislation Would Hamper Innovation.

• Interoperability mandates that require companies to hand over their intellectual
property to others severely burden platforms’ incentives to innovate. This will allow
third parties to free ride on Apple’s investments and hard work, dampening the ability
of platforms to create new products, services, and technology that benefit
consumers. These mandates would make it difficult, if not impossible, for us to innovate in accessibility, health, and other sensitive areas.• Consumers choose Apple products in part because they like the seamless interoperability between the hardware and the software that are specifically designed to work together. Moreover, Apple’s device-based business incentivizes it to create quality apps and set high app standards, increasing competition in downstream markets. Overly broad prohibitions on vertical integration would also harm consumers. Such integration has greatly benefited device innovation, and it differentiates Apple from its many rivals in the smartphone market. The iPhone would not be the same product without integration of services, like iTunes, the App Store, or iMessage.

Apple is concerned that current proposals would harm consumer privacy, device
security, and innovation. We urge the Committee not to approve the proposed legislation in its current form, and we look forward to engaging with the Committee going forward. We ask that this letter, and the attached document, be made part of the public
record.

Respectfully,
Timothy Powderly
Senior Director, Government Affairs, Americas
[email protected]

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