Wednesday, December 21, 2022

The Open App Markets Act is dead, long live the Open App Markets Act

The United States Congress has practically concluded its 117th term without passing the Open App Markets Act (OAMA) into law. But one of the key sponsors of the bill--Senator Richard Blumenthal (D-Conn.)--has vowed to reintroduce it during the next term and that he and his sponsors would "redouble" their efforts:

The other key sponsors in the Senate are Sen. Amy Klobuchar (D-Minn.) and Sen. Marsha Blackburn (R-Tenn.), but they haven't tweeted about the failure of the OAMA and the American Innovation and Choice Online Act (AICOA) yet. Another tweet that I would like to show is from CNN's Jake Tapper:

There's some in-depth analysis out there of the nine-figure lobbying spend (mostly by Apple and Google) that got the OAMA blocked at this stage. Let me refer you to Techmeme for that. It is also a fact that astroturfing played a role. The Cash & Carry Industry Association--which calls itself Computer & Communications Industry Association, falsely claims to advocate open markets (in reality, they're just about protecting monopolies and enabling monopoly abuse), and has been officially accused of astroturfing by EU politicians--was particularly active: it is backed by Apple, Google, and Meta (which is in favor of open app markets, but not of the AICOA).

While I am in favor of the OAMA, I can see why some high-ranking politicians blocked a bill that actually came out of committee with overwhelming support (20-2). I don't want to engage in "(Majority Leader) Schumer-bashing" here. In the patent policy context I've seen how unprincipled he is: he wrote a letter trying to the influence the ITC in favor of a Kodak patent enforcement action (at a time when Kodak was simply a non-practicing entity) while pushing for legislation to protect other New York companies--i.e., banks--from NPE litigation. But politicians at that level usually can't be principled: they have to make tactical choices.

The decision to table the bill (for the British English speakers among my readers, I mean the term the way it is used in America, which is the opposite of how you define it) is somewhat understandable:

  • The EU's Digital Markets Act (DMA) won't actually impact the market until 2024 at the earliest (with a potential for litigation having a dilatory effect). If the OAMA had been voted on this month, it would likely have open up mobile app stores in the U.S. even before anything would really change in Europe. (Apple's App Store business is relatively small in Europe compared to the U.S., due to market share, purchasing power, and other factors.)

  • The Ninth Circuit is working on its Epic Games v. Apple appellate opinion, and while I know that many other observers believe Epic's appeal will be rejected due to a failure of proof, I got the impression that the appeals court is aware of the district court not having gotten the market definition right. In any event, that case won't be over after the Ninth Circuit panel opinion. We'll likely see a petition for an en banc rehearing and ultimately a cert petition.

  • The DOJ supports Epic, but may also bring its own case against Apple. The DOJ could bring that case anytime now, even before the Ninth Circuit panel has spoken, but it may also await the panel opinion in order to optimize its complaint accordingly.

As an app developer who is much more concerned about the app review tyranny than the app tax (though the latter is also unacceptable), I'm obviously disappointed about the OAMA not having come to fruition yet. But many roads lead to Rome, and 2023 is another year.

Sen. Blumenthal says he and his allies in Congress will "redouble" their work. That also applies to the companies pushing for the OAMA, and their organizations, above all the Coalition for App Fairness (CAF). On Twitter and LinkedIn, I often like and share the CAF's posts, though--to be honest--I sometimes find them repetitive. The CAF must get bigger and better. The problem with getting other companies involved in the fight is, of course, that too many are afraid of the two tyrants, especially of Apple. But possibly there are some companies that are truly suffering under the app story tyranny and thought they could stay on the best possible terms with the dictatorship, politically free-riding on other companies' efforts and courage to fight the good fight. Maybe some of the free-riders and cowards will now determine that they should play a more active role next time, or change won't happen.

I'm also disappointed that it often feels like there are only two people calling out those astroturfers: Epic Games CEO Sweeney, and yours truly. (To be fair, before I first called out ACT, NY-based attorney David Cohen had already done so on his KidonIP blog, but with a focus on patent policy as opposed to app store issues; and Bloomberg's Emily Birnbaum exposed ACT more than any of us did, but she's a neutral reporter and we need more anti-astroturfing activism.)

The Verge's Alex Heath interviewed Mr. Sweeney earlier this month. Strongly recommended. He's definitely not going to give up. I don't agree with Epic 100% of the time, but easily 80%, if not 90%. With more Epics, Apple and Google would lose this. And I do view Spotify's efforts more favorably now. It was reported in some media that Spotify founder Daniel Ek met with EU antitrust chief Margrethe Vestager a few months ago. A DG COMP ruling against Apple--provided that it's not too narrowly focused on the music streaming market--would be a huge milestone. But while Mr. Sweeney's criticism of the mobile app store mess is comprehensive and multi-faceted, I'd like to see such companies as Spotify and Match Group (Tinder)--the other key CAF founders--to tackle the problem from more angles as well.

I also believe that those advocating open app markets could do a better job explaining to journalists--and it shouldn't be hard when you look at the impact of App Tracking Transparency (ATT)--why we're effectively also fighting for their interests.

Some argue that a Republican House majority would make it hard or even impossible to bring back the OAMA. I don't think so. There are various ways in which it could still work, but those in favor of open app markets must get smarter and better. There's no denying that it's harder to build consensus between a Democratic majority in the Senate and a GOP majority in the House of Representatives.

Just learn your lessons from what didn't work out during this Congressional term and why, and then the OAMA may come back with a vengeance, either in 2023 or after the EU's DMA and the UK's DMU have made an actual impact and delivered proof that neither the security sky nor the privacy sky will fall if you allow third-party app stores and direct installs (aka "sideloading").