[Senate Hearing 117-771]
[From the U.S. Government Publishing Office]
S. Hrg. 117-771
ANTITRUST APPLIED: EXAMINING
COMPETITION IN APP STORES
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HEARING
BEFORE THE
SUBCOMMITTEE ON COMPETITION POLICY,
ANTITRUST AND CONSUMER RIGHTS
OF THE
COMMITTEE ON THE JUDICIARY
UNITED STATES SENATE
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
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APRIL 21, 2021
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Serial No. J-117-12
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Printed for the use of the Committee on the Judiciary
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
www.judiciary.senate.gov
www.govinfo.gov
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U.S. GOVERNMENT PUBLISHING OFFICE
54-138 WASHINGTON : 2026
=======================================================================
COMMITTEE ON THE JUDICIARY
RICHARD J. DURBIN, Illinois, Chair
PATRICK J. LEAHY, Vermont CHARLES E. GRASSLEY, Iowa, Ranking
DIANNE FEINSTEIN, California Member
SHELDON WHITEHOUSE, Rhode Island LINDSEY O. GRAHAM, South Carolina
AMY KLOBUCHAR, Minnesota JOHN CORNYN, Texas
CHRISTOPHER A. COONS, Delaware MICHAEL S. LEE, Utah
RICHARD BLUMENTHAL, Connecticut TED CRUZ, Texas
MAZIE K. HIRONO, Hawaii BEN SASSE, Nebraska
CORY A. BOOKER, New Jersey JOSH HAWLEY, Missouri
ALEX PADILLA, California TOM COTTON, Arkansas
JON OSSOFF, Georgia JOHN KENNEDY, Louisiana
THOM TILLIS, North Carolina
MARSHA BLACKBURN, Tennessee
Joseph Zogby, Chief Counsel and Staff Director
Kolan L. Davis, Republican Chief Counsel and Staff Director
SUBCOMMITTEE ON COMPETITION POLICY,
ANTITRUST AND CONSUMER RIGHTS
AMY KLOBUCHAR, Minnesota, Chair
PATRICK J. LEAHY, Vermont MICHAEL S. LEE, Utah, Ranking
RICHARD BLUMENTHAL, Connecticut Member
CORY A. BOOKER, New Jersey JOSH HAWLEY, Missouri
JON OSSOFF, Georgia TOM COTTON, Arkansas
THOM TILLIS, North Carolina
MARSHA BLACKBURN, Tennessee
Ajay Kundaria, Democratic Chief Counsel
Wendy Baig, Republican Chief Counsel
C O N T E N T S
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OPENING STATEMENTS
Page
Klobuchar, Hon. Amy.............................................. 1
Lee, Hon. Michael S.............................................. 4
WITNESSES
Andeer, Kyle David............................................... 6
Prepared statement........................................... 99
Responses to written questions............................... 111
Cooper, Dr. Mark................................................. 10
Prepared statement........................................... 69
Responses to written questions............................... 115
Daru, Kirsten.................................................... 13
Prepared statement........................................... 52
Responses to written questions............................... 114
Gutierrez, Horacio............................................... 11
Prepared statement........................................... 84
Responses to written questions............................... 116
Sine, Jared...................................................... 14
Prepared statement........................................... 66
White, Wilson.................................................... 8
Prepared statement........................................... 102
Responses to written questions............................... 118
APPENDIX
Items submitted for the record................................... 51
ANTITRUST APPLIED: EXAMINING
COMPETITION IN APP STORES
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WEDNESDAY, APRIL 21, 2021
United States Senate,
Subcommittee on the Competition Policy,
Antitrust, and Consumer Rights,
Washington, DC.
The Subcommittee met, pursuant to notice, at 2:30 p.m., in
Room 226, Dirksen Senate Office Building, Hon. Amy Klobuchar,
Chair of the Subcommittee, presiding.
Present: Senators Klobuchar [presiding], Blumenthal,
Ossoff, Lee, Hawley, and Blackburn.
OPENING STATEMENT OF HON. AMY KLOBUCHAR,
A U.S. SENATOR FROM THE STATE OF MINNESOTA
Chair Klobuchar. Good afternoon, everyone. Sorry we are a
little late, but we had a vote this afternoon. Thank you,
Senator Lee, for working with me and our two staffs together on
this hearing. I call to order this hearing of the Subcommittee
on Competition Policy, Antitrust, and Consumer Rights. The
title of this hearing is ``Antitrust Applied: Examining
Competition in App Stores.'' I welcome our witnesses.
In our hearing, we are going to examine the scope of
America's monopoly problem and discuss what should be done to
protect and foster competition in the 21st century. Today we
will focus on competition in what we call the app economy. We
will discuss competition relating to the mobile applications
that run on our smart phones, including revenues generated
through app sales and in app purchases, we, well as app related
ad revenues and sales of devices designed to run apps.
In 2020, global app revenues have been estimated at more
than $580 billion and they are projected to grow to more than
$900 billion by 2023. In just the first 3 months of this year,
users are estimated to have spent $21 billion on apps from
Apple's App Store and around $11 billion on apps from Google's
Play store. Those are billions, not millions, and that is 40
percent higher than last year. This is a huge business and it
is growing and it is growing fast. There is nothing wrong with
that, but what is wrong is if we do not have competition.
Users spend about 90 percent of their smart phone internet
time on apps. Consumers cannot get the same functionality from
a webpage as they can from an app. When you are tweeting or
browsing the web or mapping your location or looking at a
newsfeed or listening to music, you are almost always using an
app. To put things in perspective, in the first 3 months of
this year, Americans spent an average of more than 4 hours a
day, Senator Lee, on mobile apps. Do you think you were higher
or lower?
Senator Lee. I plead the Fifth.
Chair Klobuchar. Okay. Practically all of the apps used by
consumers today are either preinstalled on Apple devices or
devices running Google's Android operating system or downloaded
from Apple's App Store or Google's Play store depending on the
consumer's device. Apps designed for the iPhone cannot run on
an Android device and Android apps cannot run on an Apple
device. There are two separate app ecosystems, Apple's and
Google's, with each setting all the rules and extracting
commissions. And consumers choose which ecosystem they want to
use when they buy their smartphone. If they buy an iPhone, they
are with Apple for as long as they use that phone. If they buy
an Android phone, they are with Google for the life of that
phone.
As consumers do not replace smartphones very often because
they are so expensive, app developers who want to reach
consumers on both types of phone must create two versions of
their apps, one for Apple and one for Android. The only
practical way for app developers to reach those customers is
with the permission of Apple or Google. Unless you are some
kind of computer hacker, which we hope you are not, the only
way to download an app onto your iPhone is through the Apple
App Store. No other app stores are allowed and downloading apps
directly from the internet to avoid the app store, a process
known as sideloading, is prohibited by Apple. In every sense,
it is what we call a walled garden and by design, the App Store
has a literal monopoly on the distribution of apps on Apple
devices.
While Google does allow alternative app stores and
sideloading on Android, as a practical matter, the overwhelming
majority of app downloads take place on the Google Play Store,
making it by far the dominant app store on Android devices.
Both Apple and Google maintain strict control over their
app stores. They decide which apps can or cannot exist on their
app stores and set the rules for how apps operate once they are
downloaded. As a result, Apple and Google operate as
gatekeepers with the power to decide how or whether apps can
reach iPhone and Android users. At the same time, they offer
many apps that compete directly with those sold through their
own app stores. Of course, this gatekeeper power can and often
is used to provide a secure environment in which legitimate
apps can be distributed to consumers. Today we will focus on
how Apple and Google can use their power to: (1) exclude or
suppress apps that compete with their own products; and (2)
charge excessive fees that affect competition in the app
economy.
As I have said before, just because a company creates a
successful, innovative business that consumers like does not
give it a free pass to harm competition or ignore our antitrust
laws. Both companies also offer their own apps that compete
with the third party apps in their app stores, including video
streaming apps, music apps, payment apps, gaming apps, and
more. In some cases, Apple and Google can build the
functionality of a third party app into their operating system
or build an app that is essentially a copy. Apple's App Store
terms explicitly allow them to imitate any of the apps in their
store, a practice known as ``sure locking,'' which can render
the original competing app obsolete.
Both companies also compel app providers that sell digital
content or services in their app to use their payment process
services. The companies then charge commissions of up to 30
percent--that is right--thirty percent for such in-app
purchases. The apps are not allowed, and this is something that
people do not know, to inform customers of or link to payment
methods outside of the app to avoid the commission. In other
words, consumers are banned from finding out, if they are in
the app, that they have a cheaper alternative.
Of course, we acknowledge that most apps are not subject to
these commissions. Most small developers and most who offer
apps that sell physical goods or services that will be consumed
outside the app like rides on Uber do not pay the commission
and they are probably pretty happy about that. That is fine.
Focusing high commission on apps that charge for digital
services used on the iPhone ensures that the commissions target
the very apps that are most likely to compete directly with
Apple's and Google's own offerings. Some affected app
developers are complaining that being forced to use these
payment services with their high commissions are crippling
their ability to compete with Apple and Google products on
equal terms.
Just because most developers are happy because they are not
paying commissions, that is fine, it does not inoculate the app
stores from the antitrust laws if they are harming competition
with other developers. Some developers have also raised
concerns about the app store's ability to demote their
placement in app store rankings, to banish their apps from the
app store, to withhold or delay approval of app updates which
can limit app functionality, and to set their own products as
automatic defaults. And when we talk about incentives, it is
important to remember that the app stores are not supporting
businesses that just cover the cost of operating them.
In 2020, consumers are estimated to have spent $72.3
billion in Apple's App Store and $38.6 billion in Google's Play
Store. Applying their standard commission rates to these
amounts nets Apple and Google billions of dollars. These
concerns have attracted the attention of enforcers in America
and around the world. We have seen significant reports on this
issue from governments in Europe and Australia in addition to
the House Antitrust Subcommittee's Digital Markets Report.
There have also been news reports of investigations by the
Justice Department and State attorneys general into app store
competition. State lawmakers in Arizona, Massachusetts, North
Dakota, my home State, Minnesota, and other States have
proposed legislation to regulate app stores.
Although we can and should use our existing antitrust laws
to address these issues, we can also strengthen our laws,
including with my bill, the Competition and Antitrust Law
Enforcement Reform Act and the exclusionary portions of that
bill would be very helpful in taking on these cases.
We also have to make sure that the agencies have the
resources to take on these complex matters which have taken me
quite a few minutes to even get to the guts of explaining this,
but I thought it was really important to do. You can imagine if
you are actually taking on the world's biggest companies that
we have ever known in the world, you actually have to be able
to have the resources to do that. That is actually tied in with
this as are all antitrust matters before those agencies. They
have to have the resources. They just cannot do this with duct
tape and band aids.
We all appreciate app stores and the roles that Apple and
Google have played in helping to create many of the
technologies that have defined our age. That is great. We are
not angry about success. We simply want to make sure that
capitalism keeps going in a strong, strong way that is fair to
everyone, yes. Capitalism is about competition. It is about new
products coming on. It is about new competitors emerging. This
situation, to me, does not seem like that is happening when you
have two companies really each dominating in different areas
and when you have companies that are simply trying to do
business in their own ecosystems or maybe with Apple and Google
that are severely hampered from doing it.
With that, I turn it over to Ranking Member Lee and I look
forward to hearing from the witnesses.
OPENING STATEMENT OF HON. MICHAEL S. LEE,
A U.S. SENATOR FROM THE STATE OF ARIZONA
Senator Lee. Thanks so much, Chairwoman Klobuchar, and
thanks for holding this hearing. Thanks to all of you for being
here today.
The subject of today's hearing, as our Chairwoman has just
indicated, is an incredibly important one. For better or for
worse, our smartphones have come to dominate our social and
economic lives and apps are increasingly becoming the most
popular way to use those devices to communicate, in many cases
to make purchases, stay informed, and otherwise manage our day-
to-day affairs.
The power that Google, Apple, and few other large tech
companies hold over the way Americans live their lives is
itself simply unprecedented. Legislators on both sides of the
aisle are right to be concerned and right to be interested in
inquiring into some of these issues.
One recent example of this power involved the total
deplatforming of Parler in January. In a matter of days, both
Apple and Google removed Parler from their app stores just as
Amazon pulled the plug on Parler's web servers. They did this
despite Parler's close collaboration with the FBI in advance of
the January 6th events in order to flag potential events and in
spite of the much greater prevalence of planning of the
horrible events of January 6th on Facebook, on Instagram, and
on Twitter. Both of those apps and their owners, Facebook and
Instagram being under one ownership and Twitter another, those
apps remained. Those apps, you know, were allowed to stay on
while Parler, disfavored by the wilk barons of Silicon Valley
was just taken down. Millions of voices went silent and one
potential avenue for competition in this marketplace for social
media platforms just disappeared into thin air.
I found this troubling. Not just because this was one
company that was taken down, but because of the many millions
of people who had chosen to use Parler were also effectively
silenced in that. I found it very difficult to get good, clear
answers or any persuasive answers as to what warranted this
action other than that they could and other than that they were
not happy with certain things that happened. Those answers did
not meaningfully distinguish Parler from other social media
sites or from other apps.
I engaged with both Apple and Parler almost immediately to
try to get to the bottom of this and why it was happening.
Apple's story seemed to change somewhat over the course of our
discussions, but I will give Apple and do give Apple credit for
continuing to work with Parler and eventually reaching a
resolution that should see Parler return to the app store
within coming days. All eyes now turn to Google and to Amazon
to see what they will do. So, like I say, I am very pleased
with this outcome, but I am as pleased with the outcome in many
ways as I am very dismayed that it took 3\1/2\ months and the
intervention of a United States Senator in order to get there.
It is dumbfounding to me. These are not the actions of
companies that feel like they have meaningful competition.
I want to be clear. This is concerning. I am glad they were
able to resolve this issue to the extent necessary to get
Parler back on the app store in the coming days, but it does
make me wonder a number of things. How many small businesses--
and let us be clear, that is what many apps start out as. In
fact, most, nearly all, start out as small businesses. How many
small businesses flounder and die because of potentially
pretextual restrictions imposed on them arbitrarily by app
store gatekeepers? How many of them? How many never get off the
ground? We may never know the true cost of competition and the
cost to competition itself and to innovation and to consumers.
I also want to be clear that Parler's deplatforming was
itself not as far as I can tell an antitrust violation, but it
might be symptomatic of the immense market power held by a
handful of tech companies including Apple and Google and Amazon
and others. When we see this kind of market power being used in
harmful, if legal ways, it is only fair to ask whether it is
also being used in illegal ways that might harm competition.
Sometimes this is what raises the first flags. If you see
someone acting with wanton disregard for competitive forces
that might otherwise come into play, what else could be out
there? If Big Tech is going to take a side in the culture wars
or in political conversations, Big Tech should be prepared for
the greater scrutiny that will come with that unfortunate
choice and with that harmful choice.
With this in mind, I am real excited to participate in
today's hearing and to get to the bottom of this really
pressing question. Thank you.
Chair Klobuchar. Thank you very much, Ranking Member Lee. I
want to introduce our witnesses. Our first witness today is
Kyle Andeer. Mr. Andeer is the chief compliance officer and
vice-president of corporate law at Apple. Earlier in his
career, he was an attorney at both the Federal Trade Commission
and the Antitrust Division of the Department of Justice.
Our second witness will be Wilson White. Mr. White is a
public policy and government relations senior counsel on
Google's Mountain View policy team where he is the global
public policy lead for the Android, Google Play Payments
Communications, and Hardware businesses. He also leads on the
company's global policy strategy for emerging tech issues
including artificial intelligence, virtual reality, and the
internet of things.
Our third witness is Dr. Mark Cooper. Dr. Cooper is
director of research at the Consumer Federation of America
where he has responsibility for energy, telecommunications, and
economic policy analysis. He holds a PhD from Yale and is a
former Yale and Fulbright Fellow. He is the author of five
books and numerous articles.
Next will be Mr. Horacio Gutierrez. Mr. Gutierrez is the
general counselor and vice-president of business and legal
affairs at Spotify. He is responsible for overseeing Spotify's
global, legal, regulatory, and government affairs and serves as
corporate secretary to its board of directors. In addition, he
heads Spotify's Global Licensing Operations, a business
function responsible for commercial licensing activities with
record labels, music publishers, performance rights, and other
right holders worldwide.
Our fifth witness is Kristen Daru. Ms. Daru is the general
counsel, corporate secretary, and chief privacy officer of
Tile, Inc. She manages legal and government affairs as well as
privacy for Tile and serves on its executive leadership team.
Kristen started her career as a commercial litigator with a
focus on consumer protection and antitrust defense. Most
recently prior to Tile, she was chief privacy officer of
Electronic Arts.
Our final witness is Jared Sine. Mr. Sine currently serves
as the chief legal officer and secretary of Match Group where
he is responsible for all legal compliance and government
affairs functions for Match Group on a global basis. Prior to
joining Match Group, he worked for Expedia as vice-president
associate general counsel where he oversaw all legal aspects of
Expedia's mergers, acquisitions, joint ventures.
I want to thank the witnesses for appearing today and I
look forward to hearing your testimony. If the witnesses now
could stand and raise your right hand, including our remote
witnesses.
Do you swear that the testimony you will give before the
Subcommittee will be the truth, the whole truth, and nothing
but the truth so help you God?
Witnesses. I do.
[Witnesses are sworn in.]
Chair Klobuchar. Thank you. You will be seated and we will
begin with you, Mr. Andeer, for a 5-minute testimony. Thank you
very much and thank you for appearing remotely.
STATEMENT OF KYLE ANDEER, CHIEF COMPLIANCE
OFFICER, APPLE, CUPERTINO, CALIFORNIA
Mr. Andeer. Chairwoman Klobuchar, Ranking Member Lee, and
Members of the Subcommittee, my name is Kyle Andeer, and I am
Apple's chief compliance officer. I appreciate the opportunity
to offer testimony about Apple's App Store.
Some of you may have an iPhone with you right now. I hope
that is the case because we believe our products deliver the
best possible customer experience. To do that, we work
constantly to innovate. The App Store is one of our most
important innovations. It is a critical feature of iPhone,
providing customers access to nearly two million apps, allowing
you to hail a ride, order dinner, listen to music, and so much
more, all from your iPhone.
Amazing as that is for our customers, I think the App
Store's real success is the opportunity it has created for
software developers to build and distribute all those apps in
the first place. Today an entrepreneur with a great idea can
use the App Store to build an app and instantly reach customers
across the entire world all from her home. It is easy to take
that for granted, but it was not always this way. When we
introduced the App Store in 2008, creating software was
difficult and often expensive. Developers had to pay for the
tools they needed to build and test their products. Then they
had to distribute it, either over the internet, which had trust
and security issues, or through physical disks, which require
costly shelf space in brick and mortar stores. It is a little
wonder that options were fairly limited and expensive back
then. The App Store changed all of that. It truly
revolutionized software distribution.
First, the App Store is curated. iPhone is not just a
phone. It contains some of your most sensitive information--
photos of your kids, financial and health information, and the
controls to your home security system. And because of that, bad
actors from around the world try to infiltrate devices using
malware. That is like a Trojan horse that tries to get into
your phone and wreak havoc. We will not tolerate that. We
review every app in the App Store to make sure it meets
standards for privacy, safety, security, and performance. Each
week, we review about 100,000 submissions and we reject about
40 percent of them because they do not meet those standards. We
know that our approach works. Study after study shows that the
iPhone has fewer malware infections than any other device in
the marketplace.
Second, we have invested significantly to provide
developers the tools that they need to build apps. That
includes over 250,000 application programming interfaces that
help unlock the magic of the iPhone. Because of that, a
developer can build apps that let you deposit a check by taking
a picture of it, play a game or listen to music with iPhone's
audio and video technologies, or get directions using GPS.
Apple built those and so many other capabilities into iPhone
and now developers can leverage them for their apps.
The App Store is not just a store. It is like a studio
stocked with canvasses, brushes, and paint, the tools that
artists need to create their works. It is a gallery where they
can display and sell their creations. That is how the App Store
empowers everyone to build apps, from elementary school kids to
small businesses, not just the big guys.
Third, the App Store is a great value for developers. The
developer keeps 100 percent of the money she makes for the vast
majority of apps on the App Store, about 85 percent of them.
The commission charged to other developers, those selling
digital goods, initially was set at 30 percent, which is a
competitive rate today and a far cry from the rates charged for
software distribution when the App Store was launched 12 years
ago. Since then, we have never raised the commission. We have
always lowered it, as we did against last year for small
businesses. Today the commission is almost always just 15
percent in those instances when it is required.
We are proud of the store we have built, the jobs it has
created, and the economic opportunity it has supported. It is
the sort of thing that is possible when competition is fierce
and fair. Apple, after all, was started by tinkerers and
dreamers and we became successful over time because we had an
opportunity to compete. We were in a street fight back then and
we still are today. We like it that way because we know that
competition spurs innovation, and with it, more and better
choices for customers.
Thank you for the opportunity to participate today and I am
happy to answer any questions you might have.
[The prepared statement of Mr. Andeer appears as a
submission for the record.]
Chair Klobuchar. Thank you very much, Mr. Andeer.
Next, Mr. White with Google.
STATEMENT OF WILSON WHITE, SENIOR DIRECTOR
PUBLIC POLICY & GOVERNMENT RELATIONS, GOOGLE, INC.
MOUNTAIN VIEW, CALIFORNIA
Mr. White. Chairwoman Klobuchar, Ranking Member Lee, and
distinguished Senators of the Committee, thank you for inviting
me here today to discuss the Google Play ecosystem and the
benefits it provides to millions of American consumers and
developers.
My name is Wilson White and I am a senior director on the
Government Affairs & Public Policy team at Google. In my
testimony today, I will describe: (1) how Android and Google
Play work; (2) the ways in which they have contributed to
competition and choice; and (3) how we fund and sustain the
continued evolution of Android and Google Play while helping
developers and consumers.
First, at Google, we believe that everyone should have
equal access to the benefits of mobile devices and we designed
Android and Google Play with freedom, openness, and
accessibility in mind. Since Android is an open source
operating system anyone, including competitors, are free to use
it without any requirement to preinstall or download Google's
apps or other services. Thousands of companies including
Peloton and JetBlue's in-flight entertainment system use the
Android operating system to build their technologies and their
businesses. Device makers and carriers are free to use Android
without Google Play or Google's other services. Many of them
actually choose to preload Google's apps alongside their
competing apps. In fact, more than half of Android devices come
preinstalled with more than one app store. This openness has
proven enormously valuable to device makers because it allows
them to invest in other ways, innovate in other ways, without
having to devote resources to building an operating system.
Similarly, the availability of third-party software is
important to ensure that mobile devices meet consumer's
expectations. A consumer selecting between competing mobile
devices needs to understand whether their favorite apps and
games will be available and actually work on those devices.
That is where app stores come in.
In 2012, we launched Google Play as our vision for an ideal
Android app store. We have a consumer experience, an online
storefront where consumers come to find their best apps and
games and a developer experience with app development,
distribution, commerce, and performance analysis tools that
help developers build better apps and to grow their businesses.
Through freedom, openness, and accessibility, today Android and
Google Play are the foundation of a thriving and competitive
device and app ecosystem. Android is available on 2.5 billion
devices around the world. Google Play has 2 billion 30-day
active users. Millions of companies rely on these platforms to
reach consumers around the globe.
Second, Android has increased competition and choice across
the ecosystem. Because of Android, today a consumer selecting a
mobile device is not limited to one or two or even a handful of
alternatives. More than 1,300 companies build Android devices
and there are more than 24,000 different Android device models
to choose from. Some of these Android devices cost less than
100 bucks, which has made computing more accessible to
communities that have not been well-served by the tech
platforms in the past.
Third, our business only succeeds when our developer
partners succeed and consumers view us as a trusted destination
for digital content. More than 90 percent of the apps on the
Google Play store are free to consumers. We do not charge for
the range of services that Google Play provides unless it
results in a sale of digital content for a developer. Even
then, only if that sale occurs within the app itself. We
believe this business model supports entry and innovation.
When our standard fee does apply, it covers everything from
essential security updates, managing app installs, and a vast
array of developer tools to help developers build and to
maintain a global marketplace. It also reflects the investment
that we make in the platform itself. For example, we employ
approximately 9,000 people who are dedicated to Android and
Google Play. This fee is also competitive with industry
practices that existed long before Google Play was built. Many
PC and console, physical and other app stores charge similar
fees. Just a few weeks ago, we announced that we were reducing
the fee to 15 percent on the first $1 million that all
developers earn on Google Play, regardless of those developers'
sizes.
With this change, 99 percent of developers will see a 50
percent reduction in their service fees. We believe the value
proposition for Google Play is a strong one. If a developer
does not agree that the value proposition is adequate, the
openness of Android allows those developers options to display
and distribute their apps through other means, either directly
to consumers or via other app stores. Creating a global
platform with access to all and providing tools for developers
has always been our goal since we launched the very first
Android device. We are proud that our bet on openness has
resulted in success for all involved.
We appreciate the Committee's interest in these important
issues and I look forward to answering your questions.
[The prepared statement of Mr. White appears as a
submission for the record.]
Chair Klobuchar. Thank you very much, Mr. White. Next up,
Dr. Cooper.
STATEMENT OF MARK COOPER, PH.D.,
DIRECTOR OF RESEARCH, CONSUMER FEDERATION
OF AMERICA, WASHINGTON, DC
Dr. Cooper. Madam Chairwoman, Members of the Committee, my
name is Dr. Mark Cooper. I am director of research at the
Consumer Federation of America. We appreciate the opportunity
to testify today. This may be the most important effort to
reform antitrust in the four decades that I have been analyzing
it for the CFA. I draw on three articles in my comments which I
have submitted for the record. They outline the problem which
remarkably the Chairwoman's description of the practices were
all illegal in the Microsoft case. That is the standard that we
should be applying today and enforcing.
Digital communications is dominated by platforms using and
abusing market power to undermine competition. Six years ago,
we concluded that one primary goal of public policy in a
dynamic digital economy is to ensure that market power that is
inherent in platforms does not hinder or diminish the
competition for goods and services and applications that can
ride on those platforms. We have the model in hand, bright
lines behind which entrepreneurial experimentation is unleashed
and strong antitrust principles to constrain market power.
The great challenge, of course, is where do you draw that
line. How do you find a set of policies that recognize that
there are innovative companies developing platforms and there
are competitors who would like to develop applications?
We know that companies are innovative and these companies
here and on the tv are innovative. They are seeking innovative
rents, sometimes called Schumpeterian rents because they
disrupt business and they create needs and wants that they then
meet in increasingly consumer-friendly ways. However, there
tends to come a point in the development of these industries
where instead of chasing Schumpeterian rents, they begin to
chase what I call Rockefeller rents. Those are the rents that
accrue to firms that build bigger moats around their businesses
and lock consumers in while they lock competitors out.
An analysis by the Stigler Group Center at University of
Chicago lists three dozen challenges to antitrust in the
digital age. The irony is that the first 10 represent positive
economic benefits of digital production and distribution. Those
are the innovations we need to foster, but the existence of
those innovations does not justify the two dozen
anticompetitive sets of practices that have grown up around
them.
Congress should, in fact, set goals, provide authority,
give power and resources to the expert agencies. Under close
congressional oversight, the agencies will get the job right.
However, if Congress tries to draw lines and pick winners and
losers, there is a good chance that the winner they pick today
will be a loser tomorrow and then we have to get Congress to
act again. That is not so easy to do. Congress should clear
away the thicket of mergers and abusive practices, the decades
of antitrust malpractice, and shift direction. It should put
all of the suspect practices and mergers on the table and
empower the agencies to figure out who is doing what to whom
and quickly resolve those problems.
The specifics that I support in my testimony include the
following: nondiscriminatory interconnection and carriage which
equals open application interfaces in the digital economy, deep
suspicion of proprietary application interfaces, a presumption
that they are illegal and severe risk to those platforms that
rely on proprietary interfaces. Fair, reasonable, and
nondiscriminatory rates, terms, and conditions for access.
That's FRAND, an expression you will hear in antitrust. The
demand side is as important as the supply side. If we cannot
get the customers, it does not matter how many apps we can
develop as long as if we cannot win the business. We need to
have the equivalent, which is true consumer sovereignty on the
demand side.
Consumers must have opted in, not opted out. No presumption
of what the default is. Give me the chance to choose. Equal
single click choice. Provision of neutral information. Clear
description of the information that is collected and how it is
used. Some limitations on the types of informations collected
and the targeting of groups for that information. Those are the
principles, approximately ten principles, that need to govern
this space if it is going to be consumer-friendly and
competitive.
Thank you.
[The prepared statement of Dr. Cooper appears as a
submission for the record.]
Chair Klobuchar. Thank you very much, Dr. Cooper. Next, Mr.
Gutierrez.
STATEMENT OF HORACIO GUTIERREZ, HEAD OF
GLOBAL AFFAIRS & CHIEF LEGAL OFFICER, SPOTIFY,
NEW YORK, NEW YORK
Mr. Gutierrez. Chairwoman Klobuchar, Ranking Member Lee,
and Members of the Subcommittee, thank you for the opportunity
to testify today on behalf of Spotify.
My message is simple, stark, and urgent. We believe all
businesses including Spotify should work hard to earn the favor
of consumers through fair and square competition in the
marketplace based on better, more innovative products offered
at attractive prices. Apple abuses its dominant position as the
gatekeeper of the App Store to insulate itself from competition
and disadvantage rival services like Spotify. Apple's anti-
competitive conduct hurts consumers with higher prices, less
innovation, and less choice.
Our market moves at internet speed and legislative action
is urgently needed to give antitrust enforcement agencies the
tools they need to prevent gatekeeper platforms like Apple from
abusing the power of their platform. Unless decisive
legislative and enforcement action is taken, other gatekeeper
platforms inevitably will follow Apple's example resulting in
further concentration of power in the hands of a handful of
digital sovereigns.
Fifteen years ago, Spotify pioneered a streaming audio
service that today enables our 345 million customers to hear
the music and podcasts they want anywhere at any time. Apple
Music is one of our principle competitors. Its advantage is not
better service. Instead, it is Apple's total control over the
App Store, which allows them to impose rules that disadvantage
Spotify and benefits Apple's own service.
Some may not remember this, but iPhones were not that
popular when first introduced. Apple soon realized that the
iPhone would not succeed if it only offered Apple's proprietary
apps. It invited third-parties to develop apps for the iPhone
and opened the App Store. Apple, therefore, has things exactly
backward when it claims that companies like Spotify are free
riding on Apple's innovations. It is Apple's success that rode,
in large part, on the creativity of third-party app developers
that created demand for Apple's devices. And the proof is
Apple's own slogan, ``there's an app for that,'' which is used
to drive sales of Apple devices.
How did Apple show its gratitude for app developers' help?
By doing a classic bait-and-switch. They waited until tens of
millions of device owners were locked into the iPhone before
changing the App Store rules to impose burdens on app
developers that compete with Apple's own applications. Apple
has a decade long history of using App Store policies to
handicap Spotify and benefit Apple Music. It forced us to
choose between two bad options: accepting Apple's illegal tie
of its proprietary payment system and paying Apple's 30 percent
tax, which would have forced us to raise consumer prices and
made our service more expensive than Apple Music, or accept a
gag order, prohibiting our communication with our own customers
so that we cannot tell our users about the existence of our
premium service and discounts and promotions available to first
time subscribers.
It does not take a Ph.D. in economics to recognize that
this abuse of conduct hurts consumers by depriving them of
information about a product that competes with Apple's. Apple's
anticompetitive intent is clear from the fact that it targets
businesses that are or might become Apple's competitors in
downstream markets. The rules apply to companies that offer
online gaming, music and video streaming, access to ebooks, but
companies like Uber, Starbucks, Ticketmaster, and Walmart are
exempt.
Apple argues that these rules are indispensable to the
safety and privacy of users, but how can they be indispensable
when they do not even apply to 85 percent of the apps in the
App Store that are exempt from Apple's ``restrictions?''
Apple's explanations are cynical pretexts. These restrictions
are nothing more than an abusive power grab and a confiscation
of the value created by others. Even Microsoft in the heyday of
the Windows PC operating system did not demand a cut of 30
percent of the revenues of competing browsers and media
players.
Legislative action is urgently needed to stop these illegal
power grabs. We welcome the broad antitrust reform proposed by
Chairwoman Klobuchar along with Senators Blumenthal and Booker.
Senator Hawley recently proposed a bill with a number of
similar and very important reforms. These reforms are essential
to equip enforcement agencies with the tools they need to
remedy the market and consumer harms that result from these
platform abuses.
Thank you and I look forward to answering your questions.
[The prepared statement of Mr. Gutierrez appears as a
submission for the record.]
Chair Klobuchar. Very good. Thank you very much. Ms. Daru.
STATEMENT OF KRISTEN DARU,
GENERAL COUNSEL, TILE, INC.,
SAN MATEO, CALIFORNIA
Ms. Daru. Thank you to the Subcommittee and to your
dedicated staff for convening this critical hearing. My name is
Kristen Daru, and I am the general counsel of Tile.
Tile helps people find lost items. Our devices work with
the Tile app to help people find their keys, wallet, purse,
really anything. We also embed our technology into third-party
products like headphones, laptops, and wearables. We are a
small company with only--with less than 150 employees, but we
have pioneered this category and found success even in the face
of significant competition ranging from other start-ups to
Fortune 50 companies.
Much of our success relates both to world class features
and a commitment to both privacy and importantly,
interoperability. We believe consumers should have a seamless
finding experience across any platform including Android and
iPhone.
Originally, we had a symbiotic relationship with Apple. We
launched our iOS app in 2013. They sold our devices in their
retail stores and they even featured us on stage at their
worldwide developer conference in 2018. That all changed when
Apple decided that it wanted to take over this category. To be
clear, we welcome competition, but it has to be fair
competition. Apple's idea of competing is patently unfair and I
will give you some examples.
With iOS 13, Apple introduced a new FindMy app that had
Tile features. It is basically their version of Tile. FindMy is
installed by default on all iPhones. At the exact same time,
Apple made changes to its operating system that denigrated our
user experience and made it really hard for our customers to
activate their Tiles, but they left FindMy streamlined and on
by default. Apple reserved troves of critical information for
use exclusively in FindMy and not competing apps.
Of course, yesterday, Apple announced the launch of their
competing hardware product, the AirTag. AirTags will make use
of a technology called ultrawide band, or UWB. It is a
nonproprietary technology in the same way that Bluetooth is.
Whereas Bluetooth can tell you in what room your item is
located, UWB can tell you exactly what pillow it is under.
Apple first included UWB chips in its iPhone 12, and since
2019, we have made many requests to access that chip so that we
can use it for the benefit of our customers.
In fact, we made an amazing experience using augmented
reality with UWB where you can use your phone and see exactly
where in the room, what pillow your keys are located under.
Apple refused our requests and therefore we cannot bring that
innovation to the market for the benefit of our customers. Yet,
the AirTag is going to use UWB because Apple has decided to
reserve its use exclusively in its product.
If that were not enough, 2 weeks ago Apple confirmed that
it is about to go live with something called the FindMy Network
Accessory Program, which the House has already found to be
anti-competitive. The program was originally touted in the
media as a pro-competitive concession to Tile's concerns,
giving our customers access to the troves of location data
otherwise reserved for FindMy. Not so. In order for our
customers to get that benefit, we have to give Apple
unprecedented control over our business and direct our
customers to the FindMy App to find their lost items.
Basically, the FindMy program holds critical data hostage to
coerce developers like Tile to abandon our apps and our
networks. It deprives customers of choice and importantly, it
breaks our interoperability.
This is not surprising. In the Epic litigation, an Apple
employee named FindMy Friends as part of an Apple strategy to
decrease interoperability to lock customers into its ecosystem.
It seems as though FindMy is part of Apple's ongoing plan to
turn iOS to a Hotel California where you can check in anytime
you like, but you can never leave. It is working. One of our
competitors has actually announced that its newest devices will
be available exclusively within FindMy to the exclusion of its
own app.
Apple, of course, claims that all of these actions are
necessary in the name of privacy. That is not true. Privacy and
fair competition are not mutually exclusive. Apple could easily
define requirements to allow us all to play on the same field,
but Apple does not do that. Apple uses privacy as a blanket
excuse to subject competitors to different rules. This is what
happens when you have a monopolist acting as a de facto
regulator. The regulations will always favor the monopolist. If
Apple turned on us, it can turn on anyone. Apple has
demonstrated it will not change unless someone makes them.
The legislative answer is simple. If Apple chooses to
compete against developers on its platform, it should just do
so fairly and according to the same rules. Regulating a giant
like Apple will not be easy, but it is just going to get harder
as it gets bigger and more powerful. Starting with an App Store
antitrust reform bill to address some of these known abuses
will be an important first step to ensure lasting innovation
and competition in this country.
Thank you for your time.
[The prepared statement of Ms. Daru appears as a submission
for the record.]
Chair Klobuchar. Thank you very much.
Next, Mr. Sine. Last, but not least. Thank you.
STATEMENT OF JARED SINE,
CHIEF LEGAL OFFICER & SECRETARY,
MATCH GROUP, INC., DALLAS, TEXAS
Mr. Sine. Madam Chair, Ranking Member Lee, and Members of
the Committee, thank you for your bold leadership in advancing
this important public debate. Apple and Google have used their
monopoly power to redirect the meritocracy of the free,
competitive, and innovating information superhighway to run
primarily through the toll gates of their app store monopolies.
They have systematically programmed users to seek out the app
for that, and if you do not have an app, you might as well not
exist.
Let me be clear. Apple and Google are the only gatekeepers
of this new internet, using user data and app developer's
innovations and even income against them in order to bankroll
the construction of massive tollways on the formerly free
information superhighway. At the heart of this strategy to
control developers and consumers is the requirement that app
developers use Apple's and Google's in-app payment services or
credit card processor, for which they charge a whopping 30
percent tax.
Do not take my word for it. The late Apple CEO, Steve Jobs,
devised this strategy. Back in 2010, Apple grew wary that it
was far too simple for users to switch between iOS and Android
devices because app developers were allowing users to buy
services directly from them that could be used readily on
either platform. His directive was simple. Let us force them to
use our payment system. He knew that once users paid through
Apple and not the app developer, they would be locked to
Apple's ecosystem, tying their purchases to their iOS devices
and forcing app developers to hand over the lifeblood of their
businesses, their customers relationships.
Let me share just two examples of our experiences that
unequivocally demonstrate the monopoly power of these app
stores. Shortly after Google launched the Google Play store,
they persuaded us to join the Android ecosystem under the false
pretenses of an open platform where we would not be required to
use Google's payment processor or pay the 30 percent tax. Now,
years after helping them establish their app store monopoly by
bringing our apps and our customers to the Play store, Google
is leveraging its monopoly power to change the rules, tying its
in-app payment system to our access to the Play store starting
in September of this year.
Not to be outdone, Apple has been equally authoritarian. A
few years back, Match wanted to institute ID verification rules
in our Taiwanese app that mirrored those already required in
Japan. Apple rejected our app. Perplexed, I personally
contacted the App Store's head lawyer to explain why this was
the right thing for our business and why it kept our users
safe. I was told in no uncertain terms that he disagreed with
our assessment of how to keep our users safe. He added that we
should just be glad that Apple is not taking all of Match's
revenue, telling me, ``you owe us every dime you have made.'' I
was floored.
Senators, this is not curation, as we have been told. It is
iron fisted monopoly control. When an industry player has the
power to dictate how apps operate, how much they will be forced
to play, and in many cases, if they will even survive, it is a
monopoly. This is the same behavior of the robber barons before
them. It is no wonder that so few companies have been willing
to stand up and testify against these monopolies. Would you
take that risk if you were a small business?
These monopoly activities result in many harms to app
developers and consumers, but I will focus specifically on
four. First, safety is actually harmed in the current system.
Because of Apple's and Google's stranglehold on consumer data,
it is difficult for us to even conduct the most basic safety
checks for our apps. For example, despite multiple requests
over the years, Apple and Google still allow underage users to
download our apps, even when they know they are under 18. Apple
and Google actually make it harder for us to keep our users
safe.
Number two, Apple's and Google's in-app payment rules force
users to hand over massive treasure troves of their most
sensitive data which these tech titans can use to enrich their
own products or develop their own competing digital services
nearly overnight and charge 30 percent less.
Number three, the app store tax. Today instead of there is
an app for that, Google's and Apple's practices could be better
described as there is a tax for that. The 30 percent tax levied
on every digital transaction increases costs on consumers and
developers alike. For Match, these app stores fees are our
single largest expense, eclipsing half a billion dollars
annually. That is $500 million that could be going back into
the pockets of everyday employees, or excuse me, everyday
consumers, or deployed to hire employees or invested in new
innovations.
Number four, incentivizing the monetization of selling user
data and reducing innovation. Apple and Google essentially push
developers to adopt a less privacy-friendly business model,
incentivizing them to avoid mandatory in-app payment by
operating more like Facebook, where consumer data is the
commodity and monetized. Additionally, by removing competition
in the payment space, innovation is harmed. When the veneer of
their safety, security, and privacy arguments shatter under the
weight of scrutiny, Apple and Google respond that they built
the platforms and should be able to decide what business models
they use.
Members of the Committee, I submit that the railroad
companies build the railroads. The steel companies built the
steel mills. The telephone companies built the telephone lines.
The creators of all of these incredible innovations each made
the same arguments at different times. It did not justify a
monopoly then and it should not today. Thank you and I look
forward to answering your questions.
[The prepared statement of Mr. Sine appears as a submission
for the record.]
Chair Klobuchar. Thank you very much. That was very
powerful, Mr. Sine, as was all the witnesses before us.
Let me start out here with you, Mr. Gutierrez. Both Apple
and Google charge app developers a 30 to 15 percent commission
fee for processing in-app purchases of digital services. Both
companies point out that the majority of apps do not pay any
payment processing commission because they are free apps or
because they are selling nondigital products or services, but
many of those who must pay the commissions find them duly
burdensome. I am concerned that these commissions can be used
to suppress competition when they raise the cost of app
developers that compete with the apps or other products or
services that are offered by the app store operator.
Spotify has raised concerns about the competitive impact
about these commission fees. Can you describe the effect of
these in-app commission fees, what effect it has had on
Spotify's ability to compete? Can you just pass these fees on
to consumers?
Mr. Gutierrez. Thank you, Senator. Thank you for your
question. There was a time in which, under pressure from Apple
we had to implement Apple's in-app payment service, and as a
consequence of that, had to start paying the 30 percent Apple
tax. The consequence of that in a business like ours, where so
much of our revenue has to go to pay for the licensing and
content from artists and music labels and others, is that, in
fact, we had no choice but to increase our price to be able to
afford the 30 percent tax that Apple was imposing on us. We had
to raise our consumer prices from a monthly subscription of
$9.99 to $12.99.
Unbeknownst to us, as Apple was putting pressure on us to
do that, Apple was in the process of acquiring Beats Music,
rebranding it as Apple Music, and then just a couple of months
after we had to increase prices, Apple launched Apple Music at
$9.99, which meant they were now undercutting us on price
because we had to pay the 30 percent tax to Apple. Faced with
this reality in which Apple was now putting us in this
uncompetitive situation from a consumer price perspective, we
had no choice but to take the IAP functionality now.
What followed after that was a series of steps on the part
of Apple threatening us to kick us out of the App Store. Just
imagine the power of a threat on the part of a platform like
Apple to take you out of the App Store, what that might mean
for your business. A number of steps in which they not only
said it was not enough for us not to provide a link to a
payment mechanism, but we could not even tell users that there
was a subscription option and that there were discounts that we
were offering that would make the product cheaper. This gag
order, in terms of the communication with our own customers,
makes it incredibly hard for us to persuade the user of a free
app to upgrade to a subscription app, which is, frankly, in a
premium model like ours, how the business can work and how the
creators that put their content on our platform can be fairly
compensated. This is a very clear----
Chair Klobuchar. Okay. Okay. I am going to keep going. It
is an amazing story and at some point I will go to Mr. Andeer
here to explain this, but there is another piece of this is
that not only are you charged these fees and you are forced to
pass them on when you do not want to, but it is my
understanding that the app stores bar app providers like
Spotify from telling your customers through the app that your
services would be cheaper if they could directly buy them
online. If those marketing bans were eliminated, what would you
tell your users and how do you think it could affect them?
Mr. Gutierrez. That is a super important issue because our
communication with our user is the way in which we get them to
know about the opportunities they have about subscription. If
we cannot do that, then we cannot make the premium model work.
Apple knows that because they are in the business. They know
exactly the importance of that.
Chair Klobuchar. Okay. Alright. Alright. Mr. Sine, Match
had a program which you testified about or which called T-
Mobile Tuesdays that offered discounts through T-Mobile's app.
Is that right?
Mr. Sine. That is correct.
Chair Klobuchar. Apple shut it down as I understand it. Is
that right?
Mr. Sine. That is correct. They blocked T-Mobile's app.
Chair Klobuchar. Okay. If Apple changed its rules to allow
Match to offer discounts would you do so and how would that
work?
Mr. Sine. One hundred percent. We actually already offer,
for example, in our Tinder app if you subscribe through the
website you get a discount relative to what you would pay in
the app, so that already exists. We would 100 percent take
advantage of that if we could.
Chair Klobuchar. Okay. Ms. Daru, you testified that Apple
essentially copied Tile's app and took steps to undermine
Tile's functionality by changing the iPhone operating system to
favor their competing product and by limiting Tile's access to
data. Yesterday Apple announced the launch of a new product
that looks a whole lot like Tile. Can you elaborate on the ways
in which Apple's conduct has reduced Tile's ability to compete?
Ms. Daru. Absolutely and thanks for the question. All of
these actions really started when it became known to us that
Apple was going to enter the market and attempt to take it
over. Really what they did was with the exact same operating
system update that they introduced the new FindMy app, they
took away one of our critical permissions which requires our
customers to go deep, deep, deep into their settings to turn
Tile on. FindMy, by contrast, is on by default through the--
when you set up your operating system. In order to turn it off,
you have to go deep into your settings and actually enter a
password.
Apple also started serving prompts with that same update to
our users. Once they figured out how to turn Tile on, they
started serving these prompts encouraging them to turn Tile
off, but they did not serve up those prompts for FindMy.
Our Bluetooth network, of course people need to opt-in to
the Bluetooth network. I think that is great. We are complete
supporters of consumer transparency, but the FindMy Bluetooth
network in the new FindMy app is on by default.
Then with the AirTags, as I discussed, we have the UWB
issue which I will not repeat, but there is something else. It
is something they call the magic onboarding flow. To connect
your AirTags with your phone, you do not even have to open the
FindMy app. You just put them near, but that magic flow is not
available to third parties like Tile.
In addition to all of that, Apple launched this product and
its competing app with a knowledge of a lot of information
about our business. They know our retail take rates. They know
our retail margins. They know how our devices do in stores.
They know who our customers are. They know our subscription
take rates. They know what features people use. I mean the list
goes on and on and that is another concern. Thank you.
Chair Klobuchar. Okay. Thank you. Alright. One of the
things I have noticed as we have talked to people affected by
all of this and the commission fees and the like, they have
come forward. A lot of them--I am not going to give their names
publicly because they are actually afraid to testify. I guess I
do not blame them because they feel that it is going to hurt
their business. They are going to get intimidated. You
mentioned, Mr. Gutierrez, I am not asking you this question.
Some of the retaliation you thought that you felt you
experienced for coming forward.
Mr. Sine, have you have any examples of retaliation for
coming forward?
Mr. Sine. Senator, we have had outreach with respect to our
coming forward for sure.
Chair Klobuchar. By who?
Mr. Sine. By Google.
Chair Klobuchar. What happened?
Mr. Sine. They called us last night after our testimony
became public to ask us why our testimony was different than
what we had said about the situation in our earnings call
earlier this year.
Chair Klobuchar. Is it different?
Mr. Sine. We had said in our earnings call earlier this
year was that we believed we would be able to work through the
issue of Google imposing their 30 percent on us, which we have
been working very hard at over the last few years meeting with
regulators and others to try and change these practices and
ensure this from not happening. Google actually first
threatened us in 2017 that they would roll out this in-app
payment requirement to us and they have slow rolled that until
they announced it last September.
Chair Klobuchar. I am just picturing this compared to
Australia where they threatened to cutoff a whole country
simply because they wanted to charge for content. If you were
to somehow keep experiencing retaliation, I would assume there
is--I do not want to keep going into my time. We have several
Senators here--three more. Another one on the way. I just want
to know could they hurt you in little ways that it would be
really hard to detect?
Mr. Sine. They could hurt us in little ways. They could
hurt us in big ways. They could easily remove our app. They
could, again, as they are doing, impose the 30 percent tax that
they had never imposed on us before. There are many, many ways
they can hurt our businesses. We are all afraid is the reality,
Senator. We are fortunate you are listening to us today.
Chair Klobuchar. I hope the Justice Department is too.
Mr. White, why did someone from your company call Mr. Sine?
You know, Match is a major competitor here in the market. We
all know who they are. Why did they do that last night?
Mr. White. Thank you, Senator, for the question. Not only
is Match is a competitor, Match is a major partner of ours, a
very valued partner of ours. My understanding based on what Mr.
Sine said is it sounds as if some business development folks
who are working on commercial conversations had a conversation
and asked a honest question of why sworn testimony was
different from what was stated in a public earnings call. I
respectfully do not view that as a threat and we would never
threaten our partners, Senator.
Having developers choosing to distribute through Google
Play is core to our business. The idea that we would threaten
partners who actually share in the success that we have as a
platform is the antithesis of how we carry out business,
Senator.
Chair Klobuchar. Okay. My last question. We will have
another round. Mr. Andeer, this is about some of the things
that Ms. Daru talked about. Does Apple's developer agreement
authorize Apple to use an app developer's confidential
technical and business information to create apps that compete
against the developer?
Mr. Andeer. Senator, no, it does not. We compete on the
merits. We have looked at different products, different
markets, and we ask ourselves time and time again what can we
do different. What can we bring that is unique and special to
the marketplace? I think AirTags is one of those products. We
think it is a very different product than anything else that is
out there. We are super excited to launch this product
tomorrow. I think if you will look at it, it is extremely
different than anything else in the marketplace. We are doing
it the same time as opening up the FindMy network so we can see
third-party innovation grow.
I mean currently this market is dominated by Tile with 80
to 90 percent of the market, so we think we are going to see a
lot more competition thanks in part to the product that we are
launching tomorrow, but also importantly, by opening the FindMy
network to all the third parties that are out there and are
really excited to bring products to the marketplace.
Chair Klobuchar. Do you use any non-public information or
data from the App Store? Did you copy anything from Tile?
Mr. Andeer. Senator, I appreciate the question. Absolutely
not. We did not copy Tile's product. We did not copy Tile's
application. I think if you look at the AirTags that will be
released tomorrow, if you look at the FindMy application, you
will see that this is a very different product, a very
different experience than what you see with Tile. We are
excited to compete and offer that choice to our consumers.
Chair Klobuchar. Why do you have to charge 30 percent to
Spotify?
Mr. Andeer. Senator, I appreciate the opportunity to
respond to that. The fact of the matter is that Spotify has
grown an incredibly successful business. To their credit, they
are incredibly innovative, incredibly aggressive when it comes
to dealing with artists and creators and driving a hard
bargain. They equally drive a hard bargain with distributors.
They built the market leading, dominant music streaming
business in the world.
In terms of subscribers, they have 155 million subscribers
around the world. Tens of millions of those are on the iPhone.
Less than one percent pay a commission to Apple. In fact, they
are only paying a 15 percent commission. The price that Mr.
Gutierrez mentioned in terms of increasing it by 30 percent,
guess what? They have never reduced that price once for their
consumers. Hey, they are a great company. They push us to
compete each and every day, but I respectfully think we are
offering choice and options to our consumers.
Chair Klobuchar. Uh-huh. I am just thinking they did not
bargain for that much money of 30 percent. I am going to turn
it over to Senator Lee.
Senator Lee. Thank you, Madam Chair.
Ms. Daru, let us start with you. You talked a little bit
about AirTag. By the way, I have used your product. It is a
fantastic product.
Ms. Daru. Wonderful.
Senator Lee. Very helpful to a lot of people. I want to
make sure I understand this correctly. Did Apple start treating
Tile differently in advance of the product launch? Is that what
you are saying?
Ms. Daru. That is correct.
Senator Lee. I understand that Apple requires companies
like Tile and including Tile to sign an agreement to be part of
the FindMy network.
Ms. Daru. Correct.
Senator Lee. What can you tell me about what that agreement
requires?
Ms. Daru. Unfortunately, I am not at liberty to say because
I am under an NDA by Apple.
Senator Lee. Okay. Mr. Andeer, will you agree to allow Ms.
Daru to talk about the FindMy network agreement?
Mr. Andeer. Senator, obviously that agreement covers a
number of proprietary technologies in work that we are still
developing here at Apple, so I cannot grant a blanket waiver to
discuss it because there is a number of proprietary
technologies and issues involved in that agreement.
Senator Lee. Could you grant a waiver to the extent it does
not include disclosing proprietary technologies? I mean our
focus in this hearing is to discuss the state of competition
and competition policy as it relates to app stores. Is there
not a way to craft that waiver?
Mr. Andeer. I am sure that there is, Senator. It is a
little hard to do this in the moment, in the vacuum, but
certainly general commercial terms, again, those are still
being hashed out.
Senator Lee. We are interested in contractual limitations,
not intellectual property.
Ms. Daru. Correct. Just contractual terms. No technology,
nothing technology related at all.
Senator Lee. Just to be clear, Mr. Andeer, your response
related to your proprietary technology, to your IP. I did not
hear you say anything about your contractual limitations, which
is what we are wanting to inquire into. Is your answer still
the same?
Mr. Andeer. Senator, part of the challenge here for me
frankly is we just launched this program 2 weeks ago. We are in
the midst of talking about it with a number of different
parties.
Senator Lee. Sure. Sure. No. I understand you just launched
it, but it is not like it materialized like manna from heaven.
It did not just show up.
Mr. Andeer. That is correct, but right now we are
collecting feedback from a number of developers. We are engaged
with dozens of third-parties who are really excited to use this
technology and give me feedback on all of these terms, so I am
in a bit of a difficult position.
Senator Lee. Okay. I would appreciate it if you could look
into that. Again, we are not--we have no interest in, we have
no jurisdiction over IP aspects of it. We want to know about
your contractual obligations there.
Mr. Sine, in your written testimony suggests that Apple and
Google have refused to work with you in order to improve user
safety. Can you tell us a little bit about more about what you
mean by that?
Mr. Sine. Yes. First and foremost, the issue I raised in my
testimony was about underage users. We are a platform that has
decided because we are online dating, it is appropriate for
only users that are 18 and older. Apple and Google collect
information as users are registering for their iTunes accounts
or their other accounts through which they will actually
download those apps. In many instances, they actually know the
age of those users. If you are a user and you move through that
flow and you are 15 years old, you will get a pop-up that says,
``by clicking here you are agreeing that you are over 18,''
even though Apple knows you are not because you have already
entered your birthdate as 15.
Those get passed on to our app. We then have to filter them
out through our various age gating systems in order to make
sure that we do not have underage users on our platforms.
Senator Lee. Right. No. I have encountered that. One of my
teenagers, a few years ago when I was arranging to pay her
allowance, I tried to do it through Apple Pay. We could not do
it at the time. She was not 18 at the time. That would suggest
that they do, in fact, know which user. To have an iPhone, to
operate with an iPhone, you have got to have an iTunes account.
If it is a minor, it can be linked to an adult's account. It
was. It knows that she was a minor.
Mr. Sine. Correct.
Senator Lee. We even tried to jerry rig it and go around it
and it would not let us because it knows. That is troubling or
that is significant at least if they do know this and knowing
that and allowing that to be known could be useful for the
purpose of protection. We live in a world where people do a lot
of bad things to kids. It is hard for me to understand why they
would not want to share that information.
Mr. Sine. We agree, Senator. You know, in addition, our
platforms for years have run registered sex offender checks. We
have asked Apple and Google to share the data with us that
would make it easier to run those checks. Again, there has
been, while some lip service to it, very little work done. We
have then gone around them in order to speak with people here
in the Senate, to try and help craft legislation that would
actually allow us to be able to run those checks with different
data. We have also helped to support a bill that passed in
Arizona that would allow us to get access to that data to go
around the fact that Apple and Google do not share the
information we need in order to run those checks.
Senator Lee. Mr. Andeer and Mr. White, now as has been
noted, we have got ride-sharing apps that use the internet to
help you find transportation in the real world. Match's dating
apps use the internet to help you find a date in the real
world. Why does Match have to use your payment services and
give up 30 percent or 15 percent of its revenue, but Uber does
not? Let us start with Mr. White and then go to Mr. Andeer.
Mr. White. Thank you, Senator Lee, for the question, and it
is a good one, a very important question. The way we have
designed our business model is to align our interests with our
developer interests. We only get paid when our developers are
engaging in the sale of digital content and only when that sale
occurs in the app itself.
When it comes to physical goods and services, we are not in
a position to really protect users on what happens in the
physical world, right. We will not know whether that Uber
driver arrived on time or whether your groceries arrived in an
acceptable state. When it comes to digital content, that is
where our investments have been. That is where our value add
is. That is why we have chosen the business model to align our
interests with developers who are actually selling digital
content to our shared users.
Senator Lee. Mr. Andeer.
Mr. Andeer. Senator, thank you. Apple's App Store was
created 12 years ago based on a simple model. That is if you
are selling a digital good or service, you are subject to a
commission. Obviously we have made changes to that model over
time in terms of making it easier for developers to sell
outside of their app in terms of reducing the price over time.
When it comes to this question about physical goods or
services, like using Uber to call a car to your house to pick
you up and take you to the airport or a Lyft to go and meet
friends. With that, you are using the phone to communicate with
the service provider and they are delivering that service to
your home or your location.
When it comes to a dating service, and obviously Tinder has
built quite a successful business and they have a number of
these sites. What they are doing is facilitating meeting with
people digitally. All of that is taking place, at least it
should be, on the device. That is you are finding a match. You
are meeting someone. You are swiping right or left. All that is
taking place on the device. From our perspective and from
really the perspective of all the developers we have talked to,
that is a digital good or service. That is not a physical good
or service being delivered to your house.
Senator Lee. What if your business involves the downloading
of some other digital service? The downloading of e-books, of
audio books, or something like that? If you are saying it is a
digital service, wouldn't that extend to the purchase of
downloads of books?
Mr. Andeer. Senator, yes. Senator, yes, it does. Folks like
Amazon and their very popular Kindle app have been----
Senator Lee. How is that different than Match.com's apps?
Mr. Andeer. They are both selling a digital good or
service. One is a book. The other is a subscription to a
service where you are meeting other people that you may be
interested in.
Senator Lee. Okay. Uber----
Mr. Andeer. In both cases----
Senator Lee. Uber, that is also a digital service in the
sense that you are trying to find a ride. You are also paying
for that ride. It involves movement of the person once the ride
arrives, but in all three instances downloading of books,
arranging to meet someone to date, or finding a ride. Aren't
those all three digital services where you are exchanging
information through the app?
Mr. Andeer. Senator, respectfully, I see the car service
very differently than the dating service or the audiobook. The
dating service, you are meeting people on your phone. On the
book, you are reading the book on your phone or your iPad. With
the car service, I am calling a car to my house to come pick me
up and take me to work or to the airport or wherever I might be
going. The value I am getting from Uber and Lyft is a way to
get a car to go from A to B.
In terms of the other examples, all of the experience is
contained within the four corners of the device. You are not
paying Tinder----
Senator Lee. Uber is literally meeting a stranger for
transportation. I am not grasping the differentiation point
between meeting a stranger for transportation and meeting a
stranger to go to dinner. I do not get it. I am just a small
country lawyer from Provo, Utah, but I am not----
Chair Klobuchar. Oh, yes. Right.
[Laughter.]
Mr. Andeer. Senator, respectfully, when I am using Uber or
Lyft, I am calling a car to my house to physically get in it
and drive somewhere. When I am using--and I do not use these--a
dating service to meet someone, I am not using it to pay that
person to come to my house and to go on a date. That is called
something else.
Senator Lee. I feel like unfrozen caveman lawyer as
portrayed by Phil Hartman in Saturday Night Live. I am just--I
am not grasping it, but I see my time has expired and I want to
be deferential to our Chair. Thanks.
Chair Klobuchar. Very good. Next, Senator Blumenthal.
Senator Blumenthal. Thank you, Madam Chairwoman. I am just
a country lawyer from Connecticut. I tried to use that line
once, Senator Lee, in the Supreme Court in an argument there
and I think it is the closest I came to contempt of court.
Anyway.
Let me just say after listening to my colleagues, I am
tempted to say Google and Apple are here to defend the patently
indefensible. If you presented this fact pattern in a law
school antitrust exam, the students would laugh the professor
out of the classroom because it is such an obvious violation of
our antitrust laws.
Mr. Gutierrez, you remarked in your testimony that you were
at Microsoft during what you call the heyday of its antitrust
woes. I remember those days because I sued Microsoft. The
lesson from that case that you expound here that these
practices are exponentially worse is absolutely true, but the
larger lesson that you tell us that the current laws are not
working. In effect, that enforcement of them is too little too
late. Courts are overly deferential. Agencies are reluctant to
bring lawsuits. Therefore, we need to reform our laws is the
takeaway here.
Mr. Gutierrez. That is correct, Senator. I think one has to
appreciate both from the point of view of the legal tools of
being able to overcome this deferential approach and the task
that the enforcement agencies would have to do that. You also
have to recognize that in this case you would be looking at the
business and the practices of trillion dollar companies that
have a global footprint with a tremendous information
asymmetry. Both from the point of view of the legal tools that
the enforcement agencies need as well as from the point of view
of resourcing. I think if something meaningful is going to
happen those things have to be looked at.
Senator Blumenthal. What I heard Apple tell you in defense
of charging you this rent, whether it is 15 percent or 30
percent hardly makes any difference. It is rent, arbitrarily
imposed, to try to stifle competition and increase Apple's
profits at your expense is, well, you can afford it. The fact
of the matter is, that, as you said, Spotify has to pass it on
to consumers and it inhibits innovation and competition,
correct?
Mr. Gutierrez. That is correct. Apple knows the business
really well because they are in it. They are a direct
competitor of ours. This is a textbook case of raising rivals'
cost, which is what they are doing. They recognize, because
they know the music streaming business, that we have high costs
associated with paying for the content to the artists and
musicians and they know that our margins are tight and that a
30 percent tax, even if it eventually might come down to 15
percent, it is just too large a fee to be able to absorb
without passing on that increase to consumers.
Senator Blumenthal. Just to show you that Apple is well
aware of the value of this practice, it does not allow users to
jailbreak their phones to sideload apps. It has shut down
alternative app stores. In fact, as we know, Apple was sued by
an alternative app store, Cydia, on monopolization grounds.
Cydia's complaint makes clear that Apple not only excluded them
from the iPhone market, but lifted Cydia's popular features and
incorporated them into Apple's App Store. It is not only a
matter of making you charge consumers more. It is also a method
to suppress competition and steal good ideas, correct?
Mr. Gutierrez. That is correct. Senator, just to follow on
your point, if Apple is convinced that their payment system is
that superior, that it really should command a 30 percent fee,
they should allow for competition and let the market determine
that. Let supply and demand determine what the right fee is,
but they have not done that. They have not legally done that.
Senator Blumenthal. That is right. They have not done it
because the law has not been enforced against them. What we
have is a classic case of exclusionary anticompetitive conduct.
As I think all of us would agree, violations of the law and
monopolistic abuse of power, just as it happened in the
Microsoft case, need to be held accountable. That is why I
support strengthening Section 2 of the Sherman Act to curb
anticompetitive exploitive conduct by monopolists and other
dominant companies. That is why we need to consider also
interoperability as a remedy like it was in the Microsoft case
and in the Access Act that I have cosponsored with Senator
Warner.
Mr. Sine, we have this apparent explanation of the call to
you last night, right?
Mr. Sine. The call was not to me. The call was to our
person who has a business relationship with Google. It is our
representative talking to their account representative.
Senator Blumenthal. A representative of your company.
Mr. Sine. Correct.
Senator Blumenthal. Out of, what do you think, idle
curiosity? Why was the call made?
Mr. Sine. I cannot really speculate on it, Senator, but,
you know, anytime you receive an inbound call----
Senator Blumenthal. We are plausibly interpreting it
because of the timing, because of the content of the call. We
do not have evidence of the exact words spoken, but it looks
like a threat. It talks like a threat. It is a threat.
Mr. Sine. When you receive something like that, Senator,
from a company that can turn you off overnight, you are always
a little intimidated.
Senator Blumenthal. Correct. It has not been reluctant to
throw its weight around similarly. I think it is an insult to
this Committee. I think it is more than an insult. It is
potentially actionable and I think we should look into more
information about it. Would you agree?
Mr. Sine. We would be happy to comply and work with you on
that.
Chair Klobuchar. That is the plan, Senator Blumenthal.
Thank you.
Senator Blumenthal. Thank you, Madam Chair. I thought it
probably would be. Thank you.
Chair Klobuchar. Yes.
Senator Blumenthal. Let me turn to another area that
Senator Klobuchar has ably begun to explore. I did not hear an
answer to Senator Klobuchar's question, Mr. Andeer. Has Apple
ever used app developer's information to inform its own product
strategy?
Mr. Andeer. Senator, I am not aware of anyone at Apple
using proprietary information from the App Store to develop our
products. It is the antithesis of how we approach product
development and innovation.
Senator Blumenthal. Well----
Mr. Andeer. We always create something different and
special and unique for our customers.
Senator Blumenthal. I notice that you carefully couched
that answer in terms of proprietary information, but the fact
of the matter is Apple has in effect appropriated--a euphemism
for unauthorized taking of this information to copy and kill
competitors. It has reportedly done this so often that it has
earned a nickname with developers, sherlocking. Apple and
Google have access to troves of private information about apps
on their app stores and it enables them to identify popular and
nascent apps and then copy and kill them by introducing those
competing apps that mimic the original.
Apple's former CEO, Steve Jobs, put it the company has
``always been shameless about stealing great ideas.'' That
seems to be the MO of Apple and there are numerous examples of
this copy and kill strategy. We have heard about AirTags, which
are carbon copy of Tile's item tracking products. Let me ask
you, Mr. Andeer, do you impose a strict firewall? Does Apple
impose a strict firewall between the App Store and its business
strategy?
Mr. Andeer. Senator, if I understand the question
correctly, we have separate teams that manage the App Store and
that are engaged in product development strategy here at Apple.
Senator Blumenthal. Yes. I understand you have separate
teams. Do you have a barrier between the two? What we call in
law firms, a Chinese wall. Do you have a strict prohibition
against the sharing of information between the App Store and
the people who run those businesses?
Mr. Andeer. Senator, we have controls in place. I would
also hasten to add that in terms of when you look at the
marketplace over the last 12 years, we have only introduced a
handful of applications and services during that time. In each
and every instance, there are dozens of alternatives available
through the App Store, oftentimes more popular and more
successful than our own Apple service or product. We do not
copy. We do not kill. What we do is offer up a new choice and a
new innovation for consumers.
Senator Blumenthal. The answer though to whether you have a
data firewall is no. That is the way I took the answer to my
question. Mr. White, does Google have a firewall between the
app store and its business strategy?
Mr. White. Senator, my understanding is we do have data
access controls in place that govern how data from our third-
party services are used.
Senator Blumenthal. When you say access control, do you
mean a firewall? In other words, no access.
Mr. White. I am not sure exactly what you mean by firewall,
Senator.
Senator Blumenthal. Do you have a prohibition against
access?
Mr. White. We have prohibition against using our third-
party services to compete directly with our first-party
services, Senator.
Senator Blumenthal. How long have you had it?
Mr. White. We have internal policies that govern that.
Senator Blumenthal. I am going to explore this question in
written questions. I apologize that my time has expired. Thank
you, Madam Chairwoman.
Chair Klobuchar. Very good. Thank you, Senator Blumenthal.
Senator Hawley.
Senator Hawley. Thank you very much, Madam Chair. Thanks
for holding this hearing. Thanks also to Senator Lee. It is no
secret to anybody on this Committee that I think that antitrust
enforcement not only needs to be a top priority, but we need to
make significant changes to our antitrust laws in order to
ensure that we are doing everything we can to get real
antitrust enforcement in this century.
Let me just come to you, Mr. Andeer. I notice since last
April Apple has bought back $58 billion in stock. That is a big
number. Quite a shift from where you were under Steve Jobs who
used to insist that Apple would not buy back stock because it
needed to innovate. It needed to retain those profits in order
to reinvest, but you have clearly changed position. That is
fine. I just want to focus on one major source of that income.
It is not innovation. It is not research and development. It is
the monopoly rents that you collect out of your App Store.
I notice that you today have referred to the need to have
that monopoly control over the App Store in terms of the
security rationale behind it. Tim Cook has said the same thing.
He said recently in a New York Times podcast that Apple needed
to lock up the ecosystem, the iOS ecosystem, so it could limit
vulnerability. The thing about that that seems strange to me is
you do not seem to spend very much money on actually on
security. I mean all of the money you make on your Apple tax,
you do not invest very much of it into actual security.
In fact, it looks to me like you did not even launch your
bounty program where you pay researchers to discover security
vulnerabilities on iOS until 2016. When you did that, you
capped it. You had a hard cap on the spend. You finally raised
the level somewhat in 2019. It does not seem to be that big of
a priority.
Let me just ask you this. Here is my question. Will you
commit, will Apple commit to spending all of the money that it
raises, all of the income it raises out of that Apple tax, all
those monopoly rents, will it commit to spend all of those on
security since that is allegedly why you need to have a
monopoly in this market?
Mr. Andeer. Senator, I appreciate the question. We have
invested billions of dollars in securing our iPhone, our App
Store, and all of our products. This is a priority for us each
and every day we wake up, 24/7, 365 days a year. If you look at
the App Store and app review process, we get 100,000
submissions each week. We have a combination of AI and human
review to review all of those. We reject 40 percent of them
because they may post some sort of either performancec,
security, privacy risk to consumers. This is something we take
incredibly seriously.
If you look at the objective studies that are out there,
time and time again they find that the iPhone is the most
secure platform and the most secure device available on the
market.
Senator Hawley. I did not--thank you for that. I do not
think I heard a yes or no though in there, so let me just try
again. Will you commit to spending--if security is the reason
you need to have this monopoly and collect these monopoly rents
which are sizable, will you commit to spending that money, all
of it, on security for apps?
Mr. Andeer. Senator, the App Store, we are going to
continue to invest in the App Store. There is a number of
things that we do to ensure that developers are able to create
their apps. There is all the tools and resources and
applications that we make available to developers. That is part
of what is at issue with our model. We also invest obviously to
make sure that our marketplace is trusted and safe for
consumers. There is a number of competing investments and
incentives for us to make sure that we continue to put the very
best experience.
Senator Hawley. Okay. I do not mean to cut you off. I just
have limited time. That sounds like a no to me, which is kind
of what I thought you would say. My concern with that is just
it makes it hard for me to ignore the major dangers to
competition that your monopoly in the iOS market poses.
You recently announced that the smallest developers in the
App Store will pay a reduced fee, 15 percent. That is very
generous of you. You announced earlier that you take only 15
percent from subscription revenue after the first year. You
take 30 percent in that first year. Here is my question. Does
Apple ever cut more generous deals to well-connected executives
in other companies? You know, to bigtime companies. Not to the
small companies, but do you ever cut more generous deals to the
really big companies?
Mr. Andeer. Senator, we do not. A fundamental principle
since the very beginning is we treat all developers the same.
When we launched the store 12 years ago, we took the price,
which was 60, 70 percent, and took it all the way down to 30
percent, in part because we wanted to encourage those new small
and midsized businesses to enter this market. What we have seen
over the last 12 years as we have evolved that model and we
have reduced price time and time again is now we have a
marketplace with 1.7 million apps, 85 percent which pay
nothing. We think it has been an incredible benefit to
startups, to small and mid-size businesses, and individual
entrepreneurs.
Senator Hawley. I find that answer strange because the
House Judiciary Antitrust Subcommittee uncovered documents from
2016 that showed that Eddy Cue of your company negotiated a
deal directly with Jeff Bezos at Amazon for a special deal from
Prime Video whereby Apple would collect just 15 percent of the
revenue from customers signing up within the Amazon app for
Prime Video. I am curious on what basis these special terms
were offered to Amazon.
Mr. Andeer. Senator, there was no special deal provided
solely to Amazon. Those negotiations led to a new program on
the App Store, the premium video partner program. There are
over 200 developers that have taken advantage of this program,
including Amazon. There are a number of developers. It is open
to all. It is another with instance in which we have reduced
the price to developers to encourage new innovation and
investment. We made those same terms available to every
developer.
Senator Hawley. The program is the established program for
premium subscription video entertainment providers, if I am
correct. What happened here for those who are keeping score at
home, is that years later when it was discovered that Amazon
had--that Apple rather had given Amazon a special deal, Apple
comes back and says, ``oh, no, no. We have had a program. It is
established. It is this program for premium subscription video
entertainment providers.'' That is a mouthful. Of course,
premium subscription video entertainment providers means it was
not by definition open to everybody.
This is not the first time that Apple has done this. The
House Antitrust Subcommittee revealed that Apple granted
Baidu--that is a Chinese company--a fast track through the app
review process and even assigned two employees to give Baidu
concierge service. You have also given Netflix special deals
that other smaller developers like app HEY did not get, for
example. It looks like to me, here is my point. It looks like
to me that what you have done is you have been willing to cut
special deals with other major companies who already have
significant market power and have significant market share and
could use it to squeeze you, but for smaller competitors who
are trying to get into the market, for those guys and gals,
there you really put the squeeze on them. Isn't that accurate?
Mr. Andeer. Respectfully, Senator, it is not. We have
operated a store for the last 12 years that has continually
looked for ways to encourage small and independent businesses
to grow and develop on the App Store. There is program after
program that we have launched. We feature these apps on our App
Store in terms of small and innovative applications. We
launched the small and midsize business program last year which
reduced the commission for small businesses that was subject to
the commission. We are going to continue to find ways to invest
to make it possible for everyone to create on the App Store.
Senator Hawley. My time has expired. I look forward to
pursuing some additional questions with you and for the other
witnesses in writing. I will just note in closing that what it
looks like to me, the pattern here, is that Apple is happy to
jerry rig the rules and is happy to cut special side deals and
is happy to try and turn away--keep bigtime competitors from
cutting into your market, make special deals with them, while
putting the squeeze and the lid on small competitors all in
service of keeping this gravy train of monopoly rents flowing.
That is a big problem and it is one that I think that it is
time we addressed and that is one of the reasons I am glad we
have had this hearing today.
Thank you, Madam Chair.
Chair Klobuchar. Thank you very much, Senator Hawley. Next,
Senator Ossoff.
Senator Ossoff. Thank you, Madam Chair. Thank you to the
panel.
Mr. White and Mr. Andeer, Senator Hawley noted that you
have consistently argued a justification for the market power
you exercise here as your ability to regulate the safety and
security and protection for consumers of apps that are sold on
your platforms. One of the things that I think is most
distressing is that it is trivially easy to find apps on both
of your platforms which are scams, which are promoted by in
some cases hundreds or thousands of obviously fake positive
reviews, and which trap users in billing arrangements that are
expensive, punitive, improperly marketed. It is very difficult
to unsubscribe from some of these monthly billing arrangements.
What steps are you taking to end the proliferation of scam
apps on your platforms when you state publicly, repeatedlyc,
that the value of your platforms is in consumer protection,
safety and security of the consumer, and why do we rely upon
open source reporting and journalists to find all of these apps
that are trivially easy to identify as scams? Mr. Andeer, go
ahead, please.
Mr. Andeer. Sure. Thank you, Senator. We have invested tens
of millions, hundreds of millions of dollars, in hardening and
improving the security. Literally billions of dollars over the
years. Unfortunately, security and fraud is a cat and mouse
game. Any retailer will tell you that. We are constantly
working to improve and we do that in a variety of ways.
Internally, we are investing in more resources, more
technologies, more tools to make sure that we can catch these
wrongdoers. We reject thousands, tens of thousands of apps each
year that pose a risk to our consumers, whether it is from the
perspective of security or from fraud. We also rely on our
external community. There are a number of stakeholders who will
raise issues and this is important. Unfortunately, no one is
perfect. I think what we have shown over and over again, we do
a better job than others. I think one of the real risks of
opening up the iPhone to sideloading or third-party app stores
is that this problem will only multiply. If we look at other
app stores out there, we look at other distribution platforms,
it scares us, so.
Senator Ossoff. Mr. Andeer. Mr. Andeer, thank you. I
appreciate the response and I want to talk about the
sideloading question in a moment, but let me just ask you this.
When again there is so much reporting in tech press, there are
independent researchers who find many of these scam apps on
your platform. Sometimes they hook people into paying ten bucks
a week or ten bucks a month recurring subscriptions for
meaningless services. Apple is making a cut on those abusive
billing practices, are you not?
Mr. Andeer. Respectfully, Senator, I do not believe that is
the case. If we find fraud, if we find a problem, we are able
to rectify that very quickly and we do each and every day.
Senator Ossoff. If you identify an app, Mr. Andeer, that is
obviously engaged in scam billing practices, does Apple refund
all of Apple's revenues derives from those scam billing
practices to the consumer?
Mr. Andeer. Senator, that is my understanding. There is
obviously a dedicated team here at Apple who works this each
and every day, but my understanding is that we work hard to
make sure that the customer is in a whole position. That is our
focus at the end of the day. If we lose the trust of our
customers, that is going to hurt us.
Senator Ossoff. Mr. White, another question about consumer
safety, privacy, and security. Certain apps available through
Google's platforms as well as Apple's platform have included
software development kits, SDKs, which send user location data
to third-parties, often location data brokers. There is a
massive market for this data. Governments buy it. Corporations
buy it. Spies buy it.
In one prominent example, a location data company called X-
Mode sold consumer data to defense contractors derived from its
SDK on products sold on both the Apple and Google stores. Both
companies announced they had banned the products, but
researchers continued to find the X-Mode SDK, Mr. White, in
hundreds of Android apps even after the ban. Are any X-Mode
SDKs still present on apps sold on Google's store and what
steps are you taking to protect your users from the sale of
location data to data brokers?
Mr. White. Thank you, Mr. Ossoff. It is a really good
question. The security issue, as Mr. Andeer said, it really is
a difficult one and one we have to invest in heavily to stay in
front of. That is why on every Android device that has Google
services, we require that those devices have Google Play
Protect. It is our security monitoring service which scans 100
billion app installs every day. Just in 2019, Google Play
Protect removed 1.9 billion instances of malware and other
security vulnerabilities from non-Google Play sources, just to
give you a sense of the scale at which we are trying to attack
this.
Senator Ossoff. To be clear, Mr. White, and just given my
limited time, I am referring to SDKs which perhaps should be
classified as malware, but are not currently classified as
malware. Do you agree that the data broker market is exploitive
and abusive and that most of your users have no idea how much
information is flowing to these data brokers?
Mr. White. One of the things, Senator, that we take very
serious is our responsibility to keep the users who come to
Google Play for a safe and enjoyable experience, to keep them
safe. That is why we have policies in place. If developers
violate those policies, we review every app that is submitted
to the Google Play store, whether it is a new submission or an
update to an existing app before it is published. As Mr. Andeer
said, similarly we have that. That is a combination of human
review and automated tools. Even if we have----
Senator Ossoff. Mr. White, will you kindly--will you please
provide to this Committee within 30 days an one assessment of
whether any X-Mode SDK malware or any other X-Mode SDK
technology remains on apps sold on the Google store?
Mr. White. Yes, Senator. I am happy to look into that and
follow-up with your office with more details there.
Senator Ossoff. I would like you to commit to providing
that information, not just to looking into it, please.
Mr. White. Sounds good, Senator. Will do.
Senator Ossoff. Thank you so much. Finally, Mr. Cooper,
thank you for joining us today. Mobile apps collect, use, and
store a massive array of sensitive personal data. Do you
believe we need legislation that would ensure that the privacy
policies provided by app developers and app stores disclose in
plain English that is decipherable to everyone all data
collection practices, data storage practices, and third parties
to whom such data might be sold?
Dr. Cooper. Yes. That was, in fact, the thrust of the
second half of my recommendations because the demand side, it
turns out, is as important as the supply side. If you liberate
these folks, they will not get any place if the consumer does
not have sovereignty. The idea of open, fair, actionable
information provided to consumers, true consumer choice, is
absolutely critical.
The interesting thing here is that this is one area in
particular--there may be others--where it may not be the
antitrust authorities who you want to do that because it is not
the kind of thing they do. They do not engage in behavioral
regulation. They actually avoid it as best they can. This is
one area where you really need stand-alone legislation and we
need to have a good conversation about who the regulators
should be. We may not have any in our society. We may have to
create a new office. We can look around, but there is no doubt
that if you do not fix the demand side and the flow of
information and give consumers back their sovereignty, which
they have lost to these platforms, you will not get very far
toward promoting competition.
Senator Ossoff. Thank you, Dr. Cooper, and thank you, Madam
Chair.
Chair Klobuchar. Okay. Thank you very much, Senator Ossoff.
Good job.
Before I turn to Senator Blackburn, just some submissions
for the record from John Bergmayer, Charlotte Slaiman, and Alex
Petros at Public Knowledge; from Morgan Reed at The App
Association; from Bruce Gustafson and Sarah Richard at
Developer's Alliance; from Meghan DiMuzio at the Coalition for
App Fairness from Tech Freedom; from Arthur Sidney of the
Computer & Communications--we must have a good hearing, Senator
Lee. From Arthur Sidney at the Computer and Communications
Industry Association; and from Professor Michael Jacobides at
the London School of Business. I seek unanimous consent to
enter these submissions into the record. Without objection.
[The information appears as a submission for the record.]
Chair Klobuchar. Senator Blackburn.
Senator Blackburn. Thank you, Madam Chairman. Yes, indeed,
it is a good hearing. I think that the witnesses see this is an
area where there is a good bit of agreement.
Picking up where Senator Ossoff left off, you know, there
is frustration with some of the Big Tech providers when it
comes to the issue of privacy and security. Dr. Cooper, I
appreciate your remarks. One of the questions we ask is who
owns the virtual you. Who owns the virtual you? Which is you
and your presence online.
To Mr. White from Google, we are fully aware that you
collect this information and then you monetize this
information. The question is why should we trust that Google
will not use this information to further entrench this data
monopoly that they have going? Mr. White, why should we trust
Google to not monetize this information and to benefit from it
and will Google commit? Since you did not want to answer
Senator Ossoff's question, I will pose it to you a different
way. Will Google commit?
Will you commit in writing that you are not going to use
any of this consumer data information to inform your other
business lines and to not collect or store any information
other than that that is necessary to facilitate the transaction
that is taking place on your system? Mr. White, will you commit
to that, that you are not going to capture and hold and utilize
and monetize this information? That you are going to let
consumers own their presence online. Are you ready to make that
commitment to us?
Mr. White. Thank you, Senator Blackburn, for the question.
To your point around why should consumers trust us, that is the
core thrust of our business model. We are an information
company.
Senator Blackburn. Mr. White, that is really not the
question. I am asking for your commitment. You ready to give
it?
Mr. White. Senator, what we do is we try to provide users
with transparency, security, and control. We give them access
to the data that is being collected and we give them the
controls and they can decide.
Senator Blackburn. Sir, you are skirting the question, so I
will reclaim my time. Let me go over to Apple. Apple seems to
have two operating standards. There is one for doing business
in America. There is a second standard for appeasing the
Communist Chinese. Apple kicked Fortnite--and I am aware of
Fortnite. I have two grandsons that are 11 and 12 and I have
watched them play Fortnite. Apple decided to kick Fortnite out
of the App Store over a fees dispute, but it lets TikTok stay
on despite violating privacy rules. Apple will pull Hong Kong
pro-democracy apps from its store when the Communist party
demands that it pull it, but then it will not cooperate with
the FBI to catch terrorists in America.
Madam Chairman, there is an excellent article on Apple's
willingness to bend the knee to China in the New York Post. It
is called ``Is your iPhone Worth China's Tyranny.'' I would ask
your permission to insert that into the record.
Chair Klobuchar. Without objection. It is in the record.
[The information appears as a submission for the record.]
Senator Blackburn. Thank you. There is the Tim Cook-run
Apple which turns a blind eye to Communist China's human rights
abuses in Tibet and Zhejiang. Then there is the Apple of Hong
Kong run by Jimmy Lai, who is willing to go to jail for a
publication that fights for democracy. It is sad to see the
Apple of the west speak up against injustice in America, yet
stay silent when it comes to China's atrocities and the
genocide they are carrying out against the Uyghur.
This month Apple is finally rolling out new privacy
policies that claim to empower users and stop unwanted location
tracking. I am concerned that Apple's Privacy By Design, as it
is called, cannot coexist with turning a blind eye toward
Beijing's behaviors. Last year, Forbes reported that Apple
caught TikTok spying on users using the clipboard feature. Even
now, TikTok is plotting ways to get around Apple's new privacy
policies. Yet TikTok remains available to download in the App
Store, putting iPhone users' privacy at risk. If Apple is
imposing 30 percent for safety and security, does that mean
Apple is also responsible for all costs related to breaches of
safety and security on iPhones? Waiting for an answer.
Mr. Andeer. Thank you, Senator. We take privacy incredibly
seriously here at Apple. We have embedded technologies and
features over the last 25 years to ensure that all of our
products respect your security and respect your privacy. That
guides our own products. That also is increasingly guiding our
third-party developers and partners to make sure that your
information, you understand who has access to it and you have
control over it. That is true here in the United States, in
China, and around the world.
Senator Blackburn. Okay. Alright. Still you are charging 30
percent for safety and security. When breaches occur, which is
my question, are you responsible for all costs related to
breaches of safety and security? I was not asking if you took
it seriously. I was asking for your actions.
Mr. Andeer. My apologies.
Senator Blackburn. Do you assume all of those costs? Then
let me continue if--let me ask you this. Are you telling
Congress and the world at large that you are charging this
massive sum because this work is very difficult and that you do
it well, that you have extraordinary security measures? If that
is the case, why should you get all the money, but not take any
of the responsibility for the breaches of safety and security
on iPhones and iPads?
Mr. Andeer. Senator, we have thrown open the gates of the
iPhone to third-party development. From the very beginning, we
have had a model to support that in terms of charging a
commission for digital goods and services that supports all the
technology, resources, and all the things that we pour into our
developer program and to build the App Store. Part of that is
security and privacy, absolutely. It is something that we will
continue to invest in and continue to work on. We now have a
marketplace in which we have 1.7 million apps. Eighty-four
percent of them pay nothing. We are working tirelessly to
create the best possible experience for both our customers and
developers and part of that is privacy and security.
Senator Blackburn. Okay. I am running out of time, but
thank you for the answer. Mr. Sine, I have a question to you
that will relate to that. I will submit it to you for a written
answer.
Chair Klobuchar. You can ask him now. A few people have
gone over.
Senator Blackburn. Okay. Thank you. Let me ask you with
Match, you all have an app. How do Apple and Google use safety
as a pretext for controlling what apps can or cannot do in the
App Store and how do you see them selectively applying
standards to disfavored apps? Because I cannot get a straight
answer from either of them. I have been listening to the
hearing in my office and I have heard a lot of hot air and
generalities and not a lot of specifics.
Mr. Sine. Yes, Senator. The reality for us is we do not see
a lot in terms of safety that they are talking about that they
provide to us. Again, as we mentioned, they do not even do the
basic which you would think is limiting underage users from
downloading our apps when they know that those users are
underage. We have actually seen them, as I mentioned, in Taiwan
block our app because we wanted to do ID verification. They
have blocked other versions of our app because we wanted to do
multifactor authentication, telling us that it was
inappropriate for us to mandate two forms of identification in
order to make sure that someone could access our app because we
wanted to make sure it was the right person.
When Apple talks about the need for safety, security, et
cetera, the reality is if it was really about safety, security,
et cetera, in-app payment would be applied to every app on the
platform, not just 15 percent, because we all have users.
Senator Blackburn. Thank you for the clarification. Mr.
Gutierrez, I will come to you for a question written. I spoke
to the House of Lords in the UK yesterday on a couple of
things, so I will just send those to you in writing.
Madam Chairman, you were generous with the time. I think
this shows exactly why we need to move forward with privacy,
data security, antitrust, and Section 230 reforms in order to
provide protection for consumers in the virtual space.
Chair Klobuchar. Excellent. Thank you very much, Senator
Blackburn. Senator Lee.
Senator Lee. Thank you, Madam Chair. When Senator Blackburn
referred to the House of Lords a minute ago, I flinched a
little bit because usually that is used as a denigrating
reference to the Senate, but glad to know you were talking
about the actual House of Lords.
Mr. Gutierrez, let us start with you in this round. A
recent filing in the Epic v. Apple case contains some quoted
discussions with Phillip Shoemaker, Apple's director of App
Store review from 2009 until 2016. Shoemaker said that Apple
had used the App Store ``as a weapon against competitors'' and
has rejected or delayed competing apps on pretextual grounds.
He further explained that although in theory an iOS developer
that is unhappy with Apple could simply leave the iOS platform
and perhaps write only for Android and compete only in that
space. Although they say that, perhaps most app developers do
not consider taking that step and therefore do not consider
abandoning iOS to be a viable, realistic option.
My question to you is if developers cannot leave, if they
feel that is not a viable option, even if they are being abused
or mistreated, how would an operating system ever feel the need
to change? Why would they change if they have got a captive
group of people who have no place else to go or who cannot go?
Mr. Gutierrez. Senator, the reality is they will not do it
out of their own initiative. They have to be forced to change.
That is why we were the first company to actually publicly have
the courage to come out and speak about these things. Then what
has happened since then is this debate has really blossomed.
This debate has really happened across both sides of the
Atlantic. You see companies come in front of you. A coalition
that we helped found now has 55 members and continues to grow.
It is only through companies speaking out about the real
implications of their actions and legislators and government
agencies and enforcement agencies looking into these issues
that they are ever going to change. Otherwise they will
continue to apply to this superficial pretext and continue to
behave exactly in the same way that they have in the past.
Senator Lee. Okay. Something you just said made me remember
a question asked by Senator Klobuchar to another witness
earlier in the hearing when you talked about having the courage
to talk about it. As a result of testifying today, do you feel
fearful of retribution?
Mr. Gutierrez. Because we have a long history of engaging
with Apple, I think they know better than to call us on the eve
of our appearance here, but I--over the years, I can tell you
right off the top of my head of at least four clear examples of
threats and retaliation that we have faced with them from the
very existential threat of being removed from the App Store
because we had decided not to implement the payment system
going forward to the clear statement to us that our app even
though at the time was a top grossing app on the app, it would
never be promoted on the App Store or receive any marketing
because we were a competitor to changes, unilateral changes to
the rules that retroactively outlawed things that we did to our
products to having to wait sometimes months for our app updates
to be approved even though they contained bug fixes and
vulnerability fixes as well as a number of other things. They
have basically thrown the book at us in a number of ways to
make it hard for us to continue to sustain our decision to
speak up.
Senator Lee. Thank you.
Dr. Cooper. Senator Lee.
Senator Lee. Yes.
Dr. Cooper. Let me make a point. You have raised the most
important issue.
Senator Lee. I do not have a lot of time, so if you can
quickly.
Dr. Cooper. One of the most important reasons, ways to get
people to come forward is to have a Department of Justice they
believe in that will listen to their complaints and carry them
forward. That is exactly what your job is, is to create that
kind of Department of Justice, because otherwise they are
naked. When they have a Department of Justice, they can tell
you what the problem is. They can say it in public. That is why
it is so necessary to pass legislation.
Senator Lee. Mr. Andeer, Apple frequently cites the need to
protect users' privacy and security. These are laudable goals.
In fact, I am an Apple customer for that reason and many
others. I appreciate Apple's sincere commitment not to sell my
data and to protect my privacy, but how can competitors and
customers and legislators and others be sure that security and
privacy are not being used as a pretext to exclude competition
as alleged by Mr. Shoemaker and the question that I asked a
moment ago to Mr. Gutierrez?
For example, other documents in the Epic litigation that I
referenced revealed that Apple's human review process typically
took 13 minutes per app, 13 minutes for each app. That the lead
engineer responsible for detecting fraud and abuse in the App
Store analogized the review process to bringing a plastic
butter knife to a gun fight. Meanwhile, it seems like apps that
present potential competitive sort of threat to Apple are often
delayed or blocked or disadvantaged. In other cases, apps that
do not present those, but perhaps offer a differing viewpoint--
I am referring here to Parler, suffer a different sort of fate.
Anyway, back to the competing space, how can we ensure that
your privacy and security protections are in fact narrowly
tailored to help consumers while minimizing the impact on
competition and that those concerns are not being used to
shoehorn in anticompetitive behavior?
Mr. Andeer. Senator, I appreciate the question. I think
what we have is a 12 year track record that we can look back
upon. What we have done consistently year after year, day after
day, is think about how we can harden and secure our devices to
make them the most secure in the marketplace, as study after
study has found, and introduce new features to give you the
power and the information you need to decide whether you are
going to share your information or not with a particular
developer.
In terms of what that track record also shows is over that
12 years, the App Store and everything that we have made
available to developers has unlocked a tremendous amount of
competition. If you look at our aps, and there is just a
handful of them, they are a drop in the bucket of this ocean of
1.7 million apps. In each and every category you are going to
see an alternative like Spotify or someone else who is doing
better than our service. There is no advantage seen in the
market. From my perspective, and I have been practicing in this
area for 20 years, I always look to the market for answers. I
look to see like what is happening. When we look to see what is
happening, we see that competitors are not just doing well on
iPhone. They are thriving.
Senator Lee. Now, wait. Is that what you are doing when you
get publishers to fix prices of e-books? Is that the track
record you are referring to, sir?
Mr. Andeer. Senator, no, I am not. That is a different
business in terms of selling e-books.
Senator Lee. It is a different business, yes, but it was
anti-competitive. You are asking us to take your word for it
here. We have got witnesses here telling us that they are
scared, that they are intimidated. What is your response to
that?
Mr. Andeer. Senator, I would again look at our 12-year
track record. If you look at Spotify, they have been downloaded
from the App Store nearly half a billion times. We have
processed dozens, hundreds of updates for them over the years.
They built the market leading position in digital music
streaming. If you look at Tinder and all the other brands it
has acquired over the years, they have been downloaded hundreds
of millions of times and we have processed thousands of
updates. If you judge us by our track record, you will see that
we have not just not engaged in this bad activity. We have been
supporting these businesses. We are going to continue to going
forward. There is no evidence of retaliation.
Senator Lee. When you get publishers to fix the prices of
e-books, was that not part of your App Store business?
Mr. Andeer. Senator, no, it was not. It was part of our
iBooks business, our ibook store. Again, in that case, we were
judged by the evidence. We may disagree with the outcomes, but
we were judged by the evidence. That is all I am saying is you
can look at the evidence of the App Store over the last 12
years and see that it has created some incredible economic
opportunity.
Senator Lee. It is still a store. It is still a store on
iOS devices.
Mr. Andeer. Yes, it is, Senator, and it has been a store
for nearly 12 years with the same basic business model. All we
have done time and time again is reduce prices and reduce
flexibility for developers to create their amazing applications
for their customers.
Senator Lee. Madam Chair, I see I am dangerously over time.
I apologize.
Chair Klobuchar. No. That is okay. Do you have anymore? It
is fine. Okay. Very good. All right. I have a few more
questions here and then we will finish up.
Mr. Andeer, you have argued in the past and actually in
testimony before the Arizona House of Representatives and in
your written testimony that the 30 percent commission is not
just a payment processing fee, but it also reflects, as many of
the other Senators discussed with you, the secure app
environment created by Apple and the fact that the App Store is
like a studio for developers providing developer applications
and APIs to help them build apps.
First of all, I guess my question is similar to what you
have heard before. If that was the case, it seems like all
developers benefit from the secure Apple environment and that
all developers who enroll in the Apple Developer Program for
$99 get access to App Store developer tools. What benefits in
addition to payment processing do the developers who must pay
the in-app purchase commission get? It sounds like all they get
is payment processing as an inflated price. I am just trying to
figure out the difference. You have had a discussion, of
course, with Senator Lee about the difference between dating
and getting a ride, which was fascinating, one I will never
forget. You have had a discussion with Senator Hawley about why
don't you just have the security fee charged or there is just
no way this can cost 30 percent of what they bring in, the
security piece of it. My question is again, what benefits in
addition to payment processing do the developers who must pay
the in-app purchase commission get?
Mr. Andeer. Sure, Senator, and I appreciate the question.
The model that we introduced along with opening up the iPhone
up to third-party development 12 years ago was simple. We say,
hey, if you are going to sell a digital good or service you are
going to be subject to the commission. That supports all the
investments and all the things we have done in terms of
continuing to open up the iPhone and additional features and
technologies. We have gone from 10,000 APIs to 250,000. We have
launched frameworks and resources and software to make it
incredibly easy for a developer to build a app. We have built a
store that is now in 175 different countries with unique
storefronts. We have an editorial team that features different
applications and different developers.
There is an incredible amount of investment that we make
into the App Store and the technology platform that supports
the store. We recuperate that and we drive that from the
commission structure. We think that has been a fair deal and
that has proven out over the past 12 years in the form of we
have got 1.7 million apps. We have got incredible rich array of
content available to our consumers. We see this as a business
that has been great for developers.
Chair Klobuchar. Would not it be better for consumers if
these guys were able to tell them that they could get cheaper
rates somewhere else?
Mr. Andeer. Senator, I absolutely agree and they all do.
Spotify----
Chair Klobuchar. Wait. Wait. Spotify can say, ``Hey, you
can get a cheaper rate on our website?'' Can they say that on
your app?
Mr. Andeer. To be clear, Senator, Spotify can do that
through one of its more than 8,000 partnerships. What it does
in our app and what we say in our app, much like what Verizon
would say to Apple if we said, hey, we want to come into the
Verizon store and put a sign up that says, ``go buy our iPhone
down the street at the Apple store.'' They are not going to
allow us to do that. No retail is going to allow us to do that.
Chair Klobuchar. I think there is a difference with----
Mr. Andeer. The App Store----
Chair Klobuchar. Okay. I think there is a difference.
Maybe, Mr. Gutierrez, you want to respond with that analogy,
with where they are when they are depending on you for this App
Store.
Mr. Gutierrez. I do. This is highlighting a really
important point. Apple takes the position that our users are
their users, that they own the customer relationship. They are
injecting themselves in the middle of the relationship and they
believe that they can control our communications with them, our
offers to them, the promotions and benefits that we would give
them. That is the heart of the problem here, which is this is a
model where basically a handful of global gatekeeper platforms
cannot claim that they own the user relationship of all the
users of all the apps that are offered on the mobile platforms.
That is the path that this approach is leading to, which is why
it is so important that these issues are addressed.
Chair Klobuchar. Yes. Dr. Cooper, I know you have not
gotten too many questions, but you did not get a call last
night not to testify, so I mean that is not what they said too.
Dr. Cooper. They might not have----
Chair Klobuchar. They did not say that to Match.com, but
they questioned their earnings statement, even better. You did
not get a question like that, right? Okay. I guess I want to
know from your perspective as someone who advocates on
consumers' behalf. This issue that we were just talking about
with Apple and with Spotify which is really an issue for
everyone. Like it is that cannot advertise that you can get
cheaper rates for their consumers. How does that affect
consumers and how does the fee? Two separate things. The ban on
telling them that they can get a cheaper rate somewhere and
then the fee.
Dr. Cooper. If these folks could compete on a level playing
field, it would have a benefit that has been missed here. That
would put tremendous competitive pressure on the platforms.
They would look out in the world and say, holy mackerel, we
could lose all these customers to someone else who is treating
them fairly. That would put tremendous pressure on the
platform.
The second thing that could happen is that these folks
could get together and say, you know what? We have got enough
users to build our own platform and new entry. That was the
logic of the Microsoft case, which in fact, if you go down the
list of abuses you started with, is identical to the Microsoft
case. How it is for 20 years we have not won the court cases
and we have them now, is amazing. It is amazing how much they
have done the same dirty old business practices. Those hurt
consumers. We learned that a long time ago. Our best protection
is real competition and this is a space in which we do not have
it.
Chair Klobuchar. Exactly. I bet you have been waiting to
say that, Dr. Cooper, behind your mask all this time sitting
there.
Dr. Cooper. I kept trying to find a way to get in.
Chair Klobuchar. Okay. The House Antitrust Subcommittee
Digital Markets Report cited estimates that Apple makes between
$15 and $18 billion a year on the App Store, Mr. Andeer.
According to Phillip Shoemaker, Apple's former director of app
review for the App Store, it costs less than $100 million a
year to run the App Store. That sounds like an incredibly
profitable business and frankly, as was noted by several of my
colleagues, those look like monopoly profits. How does Apple
justify the 30 percent commission fee rate when the cost of
running the App Store is so much lower than the revenues the
company generates from the App Store?
Mr. Andeer. Senator, I appreciate the question. As I have
mentioned, Apple has invested significant sums in technologies,
resources, tools to allow developers to build their apps far in
excess of this $100 million figure that was----
Chair Klobuchar. Okay. Then what is the correct number?
Mr. Andeer. Senator, I do not have the exact figure. I know
it is more than $100 billion that we have invested in iOS and
iPhone.
Chair Klobuchar. Do you know how much revenue it generated
last year? I mean it is relevant because we are talking here
about a monopoly situation.
Mr. Andeer. Senator, understood. When we look at the App
Store, it is not a separate standalone business for us. It is
an integrated feature of our devices. We do not have a separate
profit and loss statement for the App Store. What we do know is
that the economic opportunity has been studied and assessed and
we know that developers are creating apps, whether it is mobile
advertising or selling physical goods or digital goods and
content, that has generated more than $500 billion. I think you
mentioned this in your opening statement. There is an
incredibly economic opportunity that has been created for
developers. On a very small percentage of those sales do we
levy a commission.
Chair Klobuchar. Okay. You have no numbers, which I am sure
exist. We will try asking you in writing. I have no choice but
to go with the House numbers because there is no other number
on that table and that it is $100 million a year to run the App
Store and that you make $15 to $18 billion.
Mr. White, how much does it cost Google to run the Play
store and how much revenue did it generate in the last full
year?
Mr. White. Senator, I do not have those exact numbers, but
happy to follow-up with your team on that. What I can say
though is with the Android ecosystem, the amount of competition
and choice that that has brought to the mobile landscape, how
it has brought down the cost of mobile devices. As I said in my
opening statement, you can get an Android phone now for less
than $100 bucks. In your opening comments you talked about
accessibility and why it is important for people to have access
to mobile devices. We think that is what Android has actually
brought to this landscape. Almost 2 million American jobs that
have been created by this ecosystem.
Chair Klobuchar. Okay. I believe and I said very clearly at
the beginning that I do not challenge the success. I am proud
that we have developed these innovations in America, but you
have to keep rejuvenating capitalism. You have to keep allowing
new people to come up with new ideas. I am not going to go
beyond this issue, but I think--well, maybe I will for 30
seconds. I think when you look at some of these purchases of
Facebook and Instagram and WhatsApp and what has happened and
then you look at all the problems we have had in terms of
privacy and other things, that you are literally stifling--this
is not about you, of course, but, in general, the tech
companies are stifling some of the new developments we could
see for privacy and other things by how this has all gone down.
Then you have on top of that the issues for consumers.
I guess do you think, Dr. Cooper, listening to those
numbers I just read out which are the only ones available to
us, do you think that these companies are operating in a
competitive market, Apple and Google?
Dr. Cooper. Actually, there are other numbers which are in
one of the reports we will file with the Committee.
Chair Klobuchar. Okay.
Dr. Cooper. I looked at the learner index for these two
companies and it is way above the national average. They are
overcharging consumers for their products and earning excess
profits. These two companies in particular. There are other
digital companies that were much lower and it turned out that
they exist in marketplaces where they face much more
competition. The absence of competition in that document, and I
will call your staff's attention to it, is demonstrated to me
that we are being overcharged and our prices could be lower and
these folks are these ones who----
Chair Klobuchar. None of the companies here before us are
saying that this--in person here--are saying that this should
be free, right? You are just questioning the amount of the
charges, right?
Dr. Cooper. There should be a normal rate of profit on that
line of business. As you have heard and you suggested, there is
not. The only way they can keep that is if they exercise their
market power and lock consumers out.
Chair Klobuchar. Okay. Another related issue. Mr.
Gutierrez, some developers have raised concerns about App Store
operators preferencing their own apps in App Store's searches
so that their apps show up at the top of the search results. I
remember a long time ago this issue raised in a different
context by Senator Lee. Do you share this concern?
Mr. Gutierrez. Yes. This is just another manifestation of
the complete control that they have and the fact that the
decision on who gets promoted, who gets discoverable is really
completely manipulated to help Apple's own services. This makes
it really clear. We have heard Apple say a number of times
about all the value that they brought to these apps including
some of the services that are represented here. The reality,
Senator, is that Spotify, and I can say the same thing probably
for Match and for Tile, we are not successful because of what
Apple has done. We have been successful despite Apple's
interference. We would have been much more successful but for
their anticompetitive behavior.
Chair Klobuchar. Okay. Mr. White, what are the factors
Google uses to display app results when a consumer searches for
something in the Play store? Does it preference Google's own
apps in the Play store? Has it ever done so?
Mr. White. Absolutely not, Senator. We are an information
company. Our core business model depends on users trusting us
to provide accurate, unbiased information. We do not preference
our first-party services over our third-party services in the
Google Play store. We want when users come to the Play store
searching for their favorite apps or games for them to find the
most relevant information.
Chair Klobuchar. Okay. Mr. Andeer, I have seen news reports
that Apple has a 42 factor algorithm for how it displays app
results when a consumer searches for something. Is that correct
and which factors weigh most heavily in your algorithm? Does
Apple preference Apple owned apps in the App Store searches?
Has it ever done so?
Mr. Andeer. Senator, I am not intimately familiar with our
search algorithm in the App Store, but I do know that we do not
favor our own applications or services in the search
functionality. Again, I think if you look at the experience
over the last 12 years, we have over half a billion users who
have found and downloaded Spotify during that time. Same is
true for a whole host of companies that compete with us. The
objective evidence is, hey, consumers are finding what they
were looking for, so no, we do not favor ourselves in search.
Chair Klobuchar. Ms. Daru, do those answers give you
comfort?
Ms. Daru. No. They do not.
Chair Klobuchar. Why not?
Ms. Daru. Because we are hearing over and over things that
are not consistent with our experience. For instance, earlier
today, Mr. Andeer said that we could not talk about the MFI
agreement because they were in negotiations with other
developers regarding that agreement. We were told that
basically we could not negotiate that agreement and that that
agreement we had to sign as is, and in fact, that they are not
going to give us any more information about this program unless
we actually sign it. It is things like that that make me
question some of the statements.
Chair Klobuchar. Mr. Andeer, and I will ask this of both of
you, I guess, Mr. White. A number of app related to this, a
number of app developers have complained about a lack of
transparency regarding the application of Apple's and Google's
respective app store rules and policies. They have expressed
frustration about often not knowing why an app or an app update
has been rejected. For each app or update that is rejected or
removed from the App Store by Apple, Mr. Andeer, will Apple
commit to providing the developer of the app with a written
explanation of why the app or update was removed or rejected in
a timely manner including citations to the applicable Apple
rules or policies under which the decision was made? Will you
do that?
Mr. Andeer. Senator, we do that today. We have guidelines
and we have for 12 years. We are in constant engagement and
discussion with developers. As I mentioned, we get 100,000
submissions each week. We have to reject 40 percent of those,
whether it is for performance, safety, security, or some other
reason. In each and every instance, we try to communicate what
the issues are and we talk to thousands of developers each and
every week.
Chair Klobuchar. Uh-huh. Google, answers on that?
Mr. White. Yes. Thank you, Senator. Very good question.
Very similarly, that is generally our practice today. I will
say one caveat to that is if there is a serious security
violation we may remove that app more quickly just to make sure
we are protecting our users and their devices. As I said, the
Google Play Protect Monitoring Program scans 100 billion apps
every day, right. If there is a major security violation we
will take that app off of the play store very quickly and then
communicate with the developer on what the violation may have
been.
Chair Klobuchar. Okay.
Mr. White. Senator, whenever we do take enforcement actions
like that, we do give our developer partners avenues for
redress. They can appeal those decisions and they can have
those decisions reviewed again. We make sure that our
developers are in constant communication on how they can be in
compliance with those publicly stated policies.
Chair Klobuchar. Anyone anything on this? Want to respond,
Mr. Gutierrez?
Mr. Gutierrez. Senator, our experience may illustrate a
little bit of how this application of these rules actually
happen in practice. It happened to us multiple times. When we
decided to take IAP down, after Apple launched the competing
service at a price below ours, we complied with the rules as
they existed at the time which basically said we could not have
a buy button or a link to a payment mechanism. We decided,
Okay. We will take that. It will not be part of that.
Apple then came back and they said it is not just that we
could not have a buy button in our app if we did not have IAP.
We could not even email our users to tell them about a way to
upgrade. We could not mention in the app that they could get a
premium app. We could not tell them that that were discounts or
promotional plans that they could sign on. Then what happened
is the month after we did that after they had engaged in this
extensive, expansive interpretation that was not supported by
the rules, they changed the rules to retroactively support the
interpretation that they had started applying in our case. That
is what total control of their ecosystem means in the case of
Apple.
Chair Klobuchar. Okay. Mr. Sine, and then I have one more
question to you, Mr. Sine, and then I am almost done.
Mr. Sine. Sure. Our experience has been similar to Mr.
Gutierrez. We have had situations--and it is not really that
they do not tell you which rule you have violated. They do not
tell you how you violated that rule or how to fix it. That is
the problem. We had an app, one of our Tinder bills, that
actually had a very important safety feature for our LGBT+
community where it would actually inform users when they were
in a country where they might be at risk for exposing their
gender identity or otherwise. That sat in the App Store review
process for two months because Apple had said that we were
violating a new policy or they said the spirit of the policy
and could not tell us expressly how we needed to solve it in
order to get that launched. We had to go all the way up to
talking to the chief executives through our chief executive at
IAC at the time in order to actually get that app unblocked two
months later.
Chair Klobuchar. Wow. Okay. Just to kind of pull this out
from the trees to the forest here, so and I think, Mr. Sine, I
will do this here with you. I think one of the things that
people think--they hear all of this and they think, well, why
don't you just sell it on your website then? Why do you need
these guys? If they are doing this to you, why can't you just
go and compete on the web on your own? Could you answer that?
Mr. Sine. Yes. Like I said at the beginning of my
testimony, they have essentially taken the internet and moved
it into the app stores. They have set up their gateways. They
have set up their toll booths. You have got to pay the toll if
you are a digital good and service. They give everybody else
access onto the freeway. What we are saying is why isn't the
freeway the same for everyone and why isn't everybody paying
the same thing as they are traveling down the freeway? We have
never gotten a good answer to that, Senator.
Chair Klobuchar. Uh-huh. To me when I hear all this I
think, okay, our laws are exactly the same that they were
basically. Our competitive policy laws, our antitrust laws,
even our privacy laws on the Federal basis are the same from
back when whenever it was and whoever did it--we are not going
to get into that--the internet started. That, in fact, we have
seen this major change, major ecosystem change. We are just not
as sophisticated as these biggest companies the world has ever
seen who we are very proud of in many ways, but that are
basically using that system. That leads a number of us up here
to say we need to get changes. The first thing is we need to
have the agencies be as sophisticated as they can, which is why
Senator Grassley and I have the proposal of something we can do
immediately. The appropriations process is more the end of the
year.
To be able to change the fees for mega merges. This is
across the board, not just tech. That we can get more money to
the FTC and to the DOJ Antitrust. By the way, that was
supported by the Trump administration, just like these lawsuits
were actually brought by the Trump administration, which I have
commended Meghan Doverheim over at DOJ Antitrust and former
Chair of the FTC Simon for doing and are now being continued by
the Democratic administration, which is how some of these SEC
suits, as you know, Dr. Cooper, have gone in the past. They
have bridged administrations. We think that we need to get
funding to really play them out like they should.
The second thing we could look at, in addition to my bill,
which I am not going to go. It is 5:20 p.m. On the Competition
and Antitrust Law Enforcement Reform Act, which ups the
standards on exclusionary conduct and would really help us
adapt to the world we are in. I cannot even call it a new
world. We have been in it for quite a while and we have not
done anything about it.
The other thing we could do, I know State lawmakers in
Arizona, Massachusetts, North Dakota, which is not exactly a
radical State. I was just over there with Senator Hoeven and
the Republican Governor on a water project, but they are
looking at this. My home State of Minnesota. They are looking
at legislation on a State by State basis to regulate app
stores. Some of you have been involved in these conversations.
In your opinion, should we consider legislation on the Federal
basis to regulate app stores and why?
Mr. Sine. I 100 percent agree that that would be the right
course of action. The reality is, as I said in my opening
statement, this mandatory in-app payment structure, the way
they have this set up, that is the lifeblood of their monopoly.
It is their lifeblood to get the data from their users. It is
their lifeblood to fund all these excess profits they are
getting. It is their lifeblood to be able to identify what
competing apps are and who their users are, how much they pay,
when they pay, everything. If you cut that off, and the reason
they are fighting so hard to defend it, the reason they went in
and hired every lobbyist in the State of Arizona to defeat it--
--
Chair Klobuchar. Probably not everyone.
Mr. Sine. Everyone but the one we hired.
Chair Klobuchar. Okay.
Mr. Sine. The reality is they are fighting so hard because
it is core to the maintenance of their monopoly.
Chair Klobuchar. Okay. Anyone else want to take that?
Mr. Gutierrez. Senator, I would just add that in addition
to the appropriations process that you mentioned and in
addition to the bill, we actually--the broad bill that you have
proposed, we actually think it is important to pair that with
more specific legislation on app store issues the way that some
of the States are taking this legislation. We think this is an
action that is important for Federal preemption. These markets
are not only national, they are global. These decisions that
are made in Cupertino are decisions that affect our business in
Indonesia and all over the world, so this is a space in which
specific legislation on the app store issues would be very
welcome and very beneficial.
Chair Klobuchar. Dr. Cooper.
Dr. Cooper. Senator, as soon as you get a bunch of States
considering this legislation, these guys will come running to
you and say, ``you have got to give me Federal legislation. I
cannot have 50 States.''
Chair Klobuchar. I have experienced this before in other
contexts, yes, but.
Dr. Cooper. Yes. They will want it and they will figure
they have a better chance to negotiate with you than the
individual State.
Chair Klobuchar. You mean this Subcommittee? I do not know
about that.
Dr. Cooper. This is the place, remarkable bipartisan. This
is the place to fix the key things about the antitrust.
Chair Klobuchar. No, no, no. I know. This is the place
where we should fix them. Okay.
Dr. Cooper. Yes.
Chair Klobuchar. Okay. Ms. Daru.
Ms. Daru. I just wanted to reiterate what Mr. Gutierrez
said about having a specific app store bill just because the
mobile phones are the gateway to so many aspects of our lives,
banking, news, dating, music, health, fitness. Clearly, there
are abuses that have been exposed today and in the House report
that need to be addressed. We are concerned that if we wait for
sweeping legislation or legislation that may need to be hold
out in the courts over several years to understand what the
impact is to the mobile ecosystem, we could have more
irreparable damage done to competition and innovation in
America.
I do want to commend you and your bill because it is a
great step in the right direction. We absolutely need strong
prohibitions against exclusionary behavior and discriminatory
behavior, but would just respectfully request that some
consideration be given to an app store-specific bill.
Chair Klobuchar. Right. I mean everything we are looking
at, the newspapers allowing too because of what happened in
Australia, what is happening right here in other news
organizations to combine their bargaining power. This idea of
an app store bill, some of the gateway bills. I still believe,
and I am the author of the newspaper one and I am going to work
really hard to get it done this year. Just like you are talking
about, I do not think we can wait. The best thing would be to
admit that we have a huge monopoly problem here across the
board and to just put in some stiffer rules and standards.
There is a number of Republicans right now, as I speak,
that are with me on this too even though they are not on my
bill yet, but on pieces of that bill, to be able to make it
easier to bring these cases. That way then some of this
behavior stops even if they are never brought in a case because
people know that it is a real thing. It is going to happen if
they keep acting like that. That is not just mergers going
forward. It is also looking back at exclusionary conduct as
well as some of the other violations we have talked about.
Senator Lee, do you want to close with anything?
Senator Lee. No. Thank you very much for holding this
hearing. Thanks to each of you for being here and very
informative.
Chair Klobuchar. Uh-huh. Right. Exactly. Our two witnesses
from Apple and Google, do you want to--I should give you an
opportunity if you want to say anything about legislation and
the like.
Mr. White. Yes, Senator Klobuchar, and thank you. You are
asking very important questions, particularly as it relates to
funding of the enforcement agency, so we will be happy to
engage with you and other Members of Congress as you work
through these issues.
Before I wrap this answer, I would like to say that each of
the members on the panel here, the companies that are
represented, are important partners of ours and they are
raising issues. From where we sit, Senator, we are trying to
keep--at an ecosystem level, we are trying to keep the cost low
for the ecosystem and keep our prices competitive with the
numerous distribution channels that developers have available
to them in this very dynamic industry. I do worry that that may
be difficult to do if in an effort to satisfy a very small but
vocal set of primarily large companies, we damage the very
foundation that has allowed the Android open source ecosystem
to work so well for a much larger set of small and medium size
business. That that is the risk and that is what we would want
to engage with your office and other Members of Congress on as
you tackle these very important questions.
Chair Klobuchar. Mr. Andeer.
Mr. Andeer. Senator, again, thank you for giving us the
opportunity to participate today and share our perspective on
this. When it comes to proposals, I spent a decade of my career
in Federal Antitrust Enforcement, both with the Federal Trade
Commission and the Department of Justice. I have a deep respect
for what their role is and their job each and every day and an
understanding of how difficult it is, so I am certainly a
supporter for doubling and tripling down in terms of resources
for those men and women that carry out a really important role
each and every day.
In terms of other issues, I have long appreciated your
championing of competition. I recall when I was at the FTC you
raising issues around pharmaceutical mergers and other things
that we took a very careful look at, so I have always been very
appreciative of your interest in this area and we look forward
to engaging with you in the future.
Chair Klobuchar. Okay. This has been quite informative I
think for everyone and I think the facts that we have gathered
here today are going to be useful for us for legislation, for--
the Justice Department just today or this week. We have the top
two positions filled with the third one on the way in the
Justice Department, we have the FTC Commissioners being
nominated, hearings. I was just at a hearing in Commerce for
one of the nominees. There is a lot happening and a lot of
interest from the administration.
I do want to just tick through this just from my
perspective. We have got a situation where we have got the fees
that are higher than I ever imagined. I was looking at
furniture stores and I could not figure out why one major one
was not on the app store. That was about 3 weeks ago. I
understand because they just probably decided I am not going to
pay this high a fee. Because I thought, ``Did they do something
wrong? Why aren't they--why can't I access this on my Apple?''
It is literally what I thought. I thought, ``Oh, maybe they do
not have one or maybe I just do it this way.'' I just think
there is something pretty messed up about this because, as you
said, it has kind of taken over the internet in that way.
The second point is this idea of which we have to look
further into, but self-preferencing and competing, having
direct competition of their own products. The third one is just
this idea that consumers are literally--that companies are
being banned from telling consumers that they can get a better
deal. When they are on a monopoly, the only way they can be on
and get to those consumers in a big way is through one of these
two app stores, which are on different platforms. Obviously
people use those platforms for different reasons, but they each
dominate those platforms.
As I hear the arguments that I have heard today, point one,
this argument that a lot of them pay nothing. That is great.
That still does not inoculate a company from liability for
anticompetitive conduct. We just have to remember that. There
is ways you could structure this, obviously. Regulators, my
guess, are going to have to get involved. You would not be
hurting all the small apps, the little apps out there, but you
are just making this so that people are not hurt by monopoly
conduct.
Second, we need to protect. One of the arguments we get is
the security argument, more so I think from Apple, lesser
extent from Google, because it allows sideloading. Of course we
have to protect security and privacy. I think some of the
arguments here made were there has got to be a better way to do
this than a 30 percent charge for it or requiring apps to use
only your in-app payment processor without barring developers
from telling consumers. There is no way that telling consumers
about a cheaper rate is going to affect consumer. You are just
telling them, hey, you can also go over to this website.
Third point made that the App Store is built by them and
they put incredible work into it is true, so now they get to
run it the way they want. As been noted, those were the
arguments made in the past. That is I am sure what Standard Oil
said. I was not there back then. I am sure that that is what
AT&T said for sure. They had a horizontal and vertical
monopoly. They put all this in. They produced all this great
stuff. I know because I represented MCI shortly after that
breakup and as they were trying to get into local monopolies
and to try to compete in that market. I saw, despite this claim
that the world was going to fall apart, in fact, the chairman
of AT&T after all this went down said they were actually a
stronger company because of it because they were forced to
compete. We saw lower long distance rates and we also saw this
incredible launch of a cell phone industry, which when you go
back to the beginning was nothing but cell phones the size of
Gordon Gekko's in the movie ``Wall Street'' at the very
beginning.
I just do not think this, we built it, so trust us and we
can run it, is going to work anymore because if you look at
history as a guide, of course people build things and they do
great things. They employ a bunch of people. Then at some point
it becomes a monopoly and then it becomes a problem as Adam
Smith warned. Then we are supposed to be doing something about
it without necessarily, of course not getting rid of these
companies. We want these companies. It is just a question of
how you ensure that everyone that works, that the companies
that work or that are present in the capitalist system can do
their bidding so that we actually have a capitalist system.
The point number four, our app stores create jobs for many
small entrepreneurs. We heard this. That is great and those are
great things. Fostering innovation in that way is important,
but again, it is not an inoculation. Another way you really
foster innovation is when you allow companies that get to a
certain point where they actually can compete. We will never
know if Instagram could have competed against Facebook because
they bought them because they viewed them as disruptive, to use
Mark Zuckerberg's own word.
That is the same thing here. I do not think you can just
say, well, just because someone is a little more in our line of
business, online dating compared to car rides, well, that is
different than or some music or your products with Tile. I just
think that there is not a coincidence that the three of you are
before us today because of the fact that that is getting into
their business. I just do not see this differentiation as
Senator Lee so well pointed out.
With that, I will keep the hearing open for 2 weeks. I just
made that up. We will keep the record open for 2 weeks and we
look forward to following up on all of this. We thank all of
our witnesses for being with us through a lengthy hearing and
we look forward to working with you. The hearing is adjourned.
[Whereupon, at 5:33 p.m., the hearing was adjourned.]
[Additional material submitted for the record follows.]
A P P E N D I X
Miscellaneous submissions:
ACT, The APP Assciation Letter, April 20, 201.................... 124
Antitrust and Economic Regulation Statement...................... 275
Big Data Platforms Statement..................................... 205
Coalition for APP Fairness Letter, April 21, 2021................ 120
Computer & Communication Industry Assocation Letter, April 21,
2021.......................................................... 203
Developers Alliance Letter, April 21, 2021....................... 314
Hastings Law Journal............................................. 381
Is your iPhone worth China's tyranny Statement................... 316
Identifying Market Power in Digital Ecosystems Statement......... 318
Public Knowledge Letter, April 21, 2021.......................... 134
Tech Freedom Letter, April 21, 2021.............................. 459
Tending the Garden Statement..................................... 136
What Drives and Defines Digital Platform Power Statement, April
19, 2021...................................................... 322
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