Saturday, April 10, 2021

Bipartisan senators' letter to stonewalling Apple bookends week with public sentiment turning against App Store terms, policies, and practices

There was a high density of significant--mostly regulatory--developments concerning Apple's App Store policies during the first week of March. The week that is ending now is at least as important, but in a different way. It looks like the tide has turned against Apple, with more and more decision makers and opinion leaders starting to realize just how harmful Apple's abuse of its App Store monopoly is.

When Epic Games sued Apple last summer, I was glad about it in one way but skeptical in others. I was equally unconvinced of whether the subsequently founded Coalition for App Fairness could achieve its goals. By now I actually think it's a question of when, not if, the App Store monopoly will fall. I'm looking forward to the day--whenever it may finally come--when I'll be able to install apps from third-party app stores on an iPhone or iPad. Short of that option, Apple's conduct is going to create too many problems for regulators to keep up with.

Change is potentially coming from different directions. Apple (and Google, the sole ally it has in this) can put out some fires, or contain them for the time being, such as in the Arizona state legislature. But there's already far more than just a crack in the shell. It won't go quite as fast as Scrat's continental crack in the Ice Age movie, yet jurisdiction by jurisdiction, #OpentheAppStore is going to become a reality.

In the middle of the night from Wednesday to Thursday, Epic and Apple filed their proposed findings of fact and conclusions of law (see also my two other posts about those documents: redefinition of "commission", full text of requested injunction).

Pretty much all that Apple can try to accuse Epic of is having planned its "Project Liberty" since 2019 and having given one of its outside counsel an Epic email address. By contrast, Epic's filing contains so many revelations that I haven't even found the time yet to blog about all of them (I plan to discuss some of them in May in connection with trial testimony), and even my numerous tweets just provided examples of all that's wrong with the App Store, but top-notch media discovered a lot in Epic's filing and reported on it. There's a whole parade of horribles from Apple deciding not to publish an Android version of its iMessage app because it wants to lock users into its platform to an internal admission that the App Store review's contribution to security is like bringing a plastic butter knife to a gunfight. In fact, it has now been confirmed that the App Store monopoly was justa "policy" decision and Apple's security experts weren't even involved in the internal discussions. Probably the most appalling part is that Apple approved a school shooting game just two weeks after the Parkland tragedy.

In light of those developments, I tweeted the following on Friday:

A few hours later, it became known that the chairwoman of the Subcommittee on Competition Policy, Antitrust, and Consumer Rights, Senator Amy Klobuchar (D-Minn.), and the subcomittee's Ranking Member, Senator Mike Lee (R-Utah), sent a letter to Apple CEO Tim Cook (PDF), basically calling on him to stop stonewalling. What had happened? There's an upcoming Senate hearing on app store competition issues this month. As a matter of audiatur et altersa pars, senators would want to talk with Apple and not just about Apple. But Apple refused to provide a witness under the pretext of pending litigation (sorry I have to the word "pretext" and the related adjective all the time in connection with Apple, but that's due to how they act). As the senators note, the Epic case was also pending when Apple sent witnesses to state legislatures (North Dakota and Arizona), and Apple gives interviews about this all the time. Tim Cook participated in a House of Representatives hearing on the same topic last year.

According to the senators, Apple was originally cooperative with the Senate Antitrust Subcommittee, and it appeared as if the only question was whom Apple was going to dispatch to DC. But then, Apple decided to decline the invitation.

Apple must be really afraid of that May trial. They obviously know that U.S. antitrust law is pretty defendant-friendly, but the App Store situation is as intolerable as it is unjustifiable. How frightened must Apple be that it would snub the United States Senate after actually testifying in the lower chamber and in state legislatures about the same issues?

Actually, whatever Apple says there under oath will have to be the truth, the whole truth, and nothing but the truth--just like whatever its witnesses have already said in their depositions in the Epic case, and whatever they will say next month in the Oakland federal courthouse.

If anything, Apple's stonewalling--which the senators' letter calls "unacceptable"--helps to build bipartisan consensus that something must be done about the problem.

In 2013, this blog already reported on a couple of occasions on which Senators Klobuchar and Lee jointly wrote letters about a serious antitrust issue: the abuse of standard-essential patents. In that context, they actually supported Apple--as did I in my modest way:

Later that year I (favorably) mentioned Sen. Klobuchar in the context of the fight against patent trolls. In 2018, I proposed that the tech industry lobby for Sen. Lee to be nominated to the Supreme Court, though I was really disappointed last month that he opposed Lina Khan's nomination to the Federal Trade Commission.

For your convenience, here's the full text of the senators' letter to Apple's CEO:


April 9, 2021


Mr. Timothy Cook
Chief Executive Officer
Apple Inc.
One Apple Park Way
Cupertino, CA 95014


Dear Mr. Cook:

We write regarding Apple Inc.’s refusal to provide a witness to testify in a timely manner before the Senate Judiciary Committee’s Subcommittee on Competition Policy, Antitrust, and Consumer Rights at a hearing to examine the competition issues raised by app stores.

More than half of internet traffic comes through mobile phones, whose users rely on mobile applications to access online content and services—and the vast majority of mobile apps are downloaded from either Apple’s App Store or Google’s Play Store. Apple’s power over the cost, distribution, and availability of mobile applications on the Apple devices used by millions of consumers raises serious competition issues that are of interest to the Subcommittee, consumers, and app developers. A full and fair examination of these issues before the Subcommittee requires Apple’s participation.

Apple has been aware for weeks that the Subcommittee was planning a hearing on this topic and was engaged in discussions with our staff regarding who would testify on Apple’s behalf. Yet a little more than two weeks [16 days] before the planned hearing, Apple abruptly declared that it would not provide any witness to testify at a hearing in April.

Earlier this year, Apple provided witnesses to testify before the North Dakota Senate and the Arizona House of Representatives to oppose state bills that would regulate the very same conduct that the Subcommittee intends to explore. You testified before the House Antitrust Subcommittee regarding these same issues last year. And on the exact day Apple informed the Subcommittee that it would not provide a witness for an April hearing, the New York Times released a podcast interview in which you discuss competition issues relating to Apple’s App Store, including Apple’s pending litigation with Epic Games.

Finally, your staff has noted ongoing litigation as the reason for not providing a witness this month. Many other representatives of companies, both inside and outside of the technology sector, have testified before Congress in similar circumstances, and your staff was aware of the ongoing litigation when they were initially working with us to provide a witness. Apple’s sudden change in course to refuse to provide a witness to testify before the Subcommittee on app store competition issues in April, when the company is clearly willing to discuss them in other public forums, is unacceptable.

We strongly urge Apple to reconsider its position and to provide a witness to testify before the Subcommittee in a timely manner.

Thank you for your urgent attention to this matter.





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