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It's been a bad week for Big Tech. And the news just keeps getting worse.
In a rare and sweeping act of bipartisanship, the Senate Judiciary Committee near-unanimously approved a piece of legislation that would make antitrust godfather John Sherman sit up in his grave. If the Open App Markets Act makes it across the legislative finish line, Apple and Google's iron grip on mobile app stores may finally slip.
Fight For Your Right To Third-Party
Passed in a 20-2 vote, the bill would prevent major app stores from requiring third-party developers from using its proprietary payment systems. It also includes language freeing third-party developers to offer their apps through other marketplaces and at varying price points.
In practical terms, that means third-party publishers can escape their gatekeepers' commission rates on both initial and in-app purchases. They'll also be free to offer their apps through web and third-party marketplaces, a practice known as "sideloading." For the two tech giants, the final passage of the bill could be a major blow to their business models:
- Apple currently takes a 30% cut of all App Store and in-app purchases on iOS devices, including recurring subscriptions registered within apps. In 2021, it's projected that the Cupertino company's raked in over $60 billion in commissions, bringing the App Store's revenue to over $260 billion since its 2008 launch.
- At the turn of the New Year, Google dropped its cut from 30% to 15%. In 2021, Google Play, its app marketplace, generated gross revenue of roughly $48 billion. That's good for just over 18% of the search giant's total yearly revenue.
Silicon Schism: Unsurprisingly, Apple and Google are fighting the bill tooth-and-nail, claiming it poses a potential threat to users' cybersecurity, among other concerns. Tim Cook and Sundar Pichai have reportedly even made personal calls to senators to lobby against the bill. Perhaps equally unsurprising, smaller companies like Yelp, Wyze, and DuckDuckGo are gunning hard for its passage. Hey Siri, can you Google "retribution" for me?