It was a big week for the Consumer Center at the Taxpayers Protection Alliance (TPA) and the Taxpayers Protection Alliance Foundation (TPAF). Before I get into the big antitrust bill that was marked up this week, I want to point out work done by the Director of TPA’s Consumer Center, Lindsey Stroud. Lindsey went through all 50 states (+D.C.) and looked at smoking/vaping statistics. Each paper examines smoking rates among adults in the respective state, youth use of tobacco and vapor products, and the effectiveness of tobacco settlement payments, taxes, and vapor products on reducing combustible cigarette use. It is really amazing work and not easy to compile. Be sure to click on your state to see the numbers.
Antitrust Bill is a Big Swing and a Miss
The Senate Judiciary Committee marked up the Open App Markets Act (OAMA) this week. The bill opens the door to privacy and cybersecurity harms, two of the most important issues facing Americans. OAMA fundamentally seeks to change antitrust laws and not only harm the safety and privacy of consumers and businesses, but it puts a heavy limitation on American companies, while recklessly allowing foreign companies to prosper at their expense. Side-loading targets American consumers and allows apps to be downloaded without the proper vetting and security measures that Apple and Google have prided themselves on for so many years. Clearing the path for malware outside of the secure ecosystems created by these companies should be concerning for all.
Bad for Child Safety
Our friends at Stop Child Predators (SCP) are monitoring this legislation very closely to ensure that children’s safety is not lost in the mad dash to punish big tech. This is important to SCP because the group is a team of policy experts, law enforcement officers, community leaders, and parents who launch state and federal campaigns to inform lawmakers and the public about policy changes that will protect America’s children from sexual predators. At a recent hearing entitled “Protecting Kids Online: Facebook, Instagram, and Mental Health Harms,” the Senate Commerce Committee questioned Antigone Davis, Facebook’s Director of Global Safety. One of the main concerns was Facebook’s perceived lack of action when it came to illicit prostitution, sex trafficking, and child abuse being facilitated on their platform. Sen. Marsha Blackburn (R-Tenn.) accused Davis and Facebook of doing nothing about the problem for an extended time. However, Blackburn also indicated the reason that Facebook eventually took a much harder line towards addressing these key issues when she noted that, “Facebook knew about content devoted to coercing women into domestic servitude, yet they chose to do nothing to stop it, until Apple threatened to pull Facebook from the App Store.” Blackburn, who ironically enough is one of the lead sponsors of the Open App Markets Act, raises a critical point in this discussion. Apple’s strict standards for their App Store are not born out of a desire to hurt other companies. Rather, they are there to ensure Apple’s users know the apps they are using are safe. Immediately when a company – even one as large as Facebook – runs afoul of those standards, Apple has the ability to pull it from the App Store. This is a very simple, yet important step, for the company to take to protect children and all of its customers. Unfortunately, Blackburn’s Open App Markets Act, and the broader effort to go after app store security measures would make the simple step of putting guard walls to protect children illegal and would subject companies like Apple to years of litigation and millions in fines. Apple also requires developers using the app store use its App Tracking Transparency (ATT) tool to give them a better idea of who is maintaining these standards. The Open App Markets Act would also make this requirement a presumed anticompetitive behavior.
It is certainly a curious thing, that after all the hearings about big tech – and even dedicating one specifically to protecting children online – the solution many have settled on is allowing potentially problematic applications a workaround to basic safety guidelines. In 2020, Apple stopped more than one million unsecure or potentially harmful applications from accessing the app store. Without these protections, users would be flying blind regarding the risks of potential child sex abuse online, as well as financial abuse. In the end, these bills will create a wide-open door for app developers of all sorts to get their content on smart phone devices. Users will be left on their own to determine what is and is not safe, and that includes children online. Naturally, the likelihood of abuse skyrockets without the existing safeguards in place. While Congress looks for solutions to protect children online, they are pushing legislation that would increase those risks.
Weakens Intellectual Property
In the present political climate, there are certain issues where it can be difficult to spot the difference between a “conservative” and a “liberal.” The strange synthesis between left and right can be seen in antitrust policy, where Republicans such as former President Donald Trump and Senator Josh Hawley (R-Mo.) have called for onerous federal regulations to limit allegedly “anticompetitive” business policies. Reminder, Donald Trump wanted to “drain the swamp,” and Sen. Hawley has been skeptical of big government. Conservative lawmakers and groups are taking this unfounded phobia of large companies to new heights by supporting the “Open App Markets Act,” (OAMA) which would impose a slew of conditions on app stores hosting their own apps alongside third-party apps. In addition to imposing a version of net neutrality on mobile software, the legislation erodes the intellectual property (IP) protections that have been so pivotal to thriving digital markets. Before conservatives hop on this latest antitrust crusade, they should closely examine the many anti-IP provisions hiding in this deeply flawed legislation.
From vaccinations that fight COVID-19 to ultra-fast and uber-accurate search platforms, America is home to all sorts of cutting-edge advancements. But this incubation of innovation (digital and otherwise) could come to a screeching halt if OAMA becomes the law of the land. One key concept behind the legislation is mandated interoperability, which is when companies and their platforms are forced to open house to other businesses on “fair” (read: arbitrary and capricious) terms. The inclusion of language forcing large app stores to interoperate with third-party apps regardless of cost or consequence is not surprising, and other, similar pieces of legislation such as the “American Innovation and Choice Online” (AICO) Act also featured mandated interoperability. But, unlike other digital antitrust bills, OAMA is conspicuously missing language clarifying that companies will not be forced to give up IP via compulsory licensing. Lawmakers likely realized that including boilerplate pro-IP language was folly because mandated interoperability will inevitably weaken IP protections. When regulations preclude companies from using and developing operating systems on their own terms, in-house entrepreneurs are naturally left with little incentive to tinker with and improve their creations.
Running a sprawling mobile software marketplace means having to constantly address security flaws, sync issues for developers, and shady payment schemes promoted by unscrupulous third parties. In addition, plenty of IP battles go on within app marketplaces requiring a robust response from large companies such as Apple. When fly-by-night app developers are trying to flood app stores with copies of popular games such as “Wordle” and “Unpacking,” it takes a combination of active corporate monitoring and sophisticated algorithms to protect the IP of the games’ rightful owners. Strangely, supporters of the legislation have been using pro-IP rhetoric to advocate for limits on the use of developers’ nonpublic information. They argue that Apple and Google are copying developers’ apps and then rigging the game in favor of their own versions. What they fail to mention is that courts across the country have a well-developed standard for rooting out copied software. The well-known “abstraction-filtration-comparison” legal test identifies commonalities between original and copycat software, distinguishing between necessary shared software features (e.g., basic programming language) and blatant rip-offs. OAMA’s sponsors have failed to explain the need to supplant this perfectly workable standard which has been in place for decades.
The fact is that courts and app stores have done a commendable job in ensuring that IP flourishes in the digital domain. Clumsy federal interference will only undermine property rights and set the stage for compulsory licensing. Conservatives should see OAMA for what it is: a federal push against property rights.
BLOGS:
Monday: Op-Ed: Another Federal Agency Gets Blame for Spat Between FCC & FAA
Tuesday: Taxpayers Protection Alliance (TPA) on the Open App Markets Act Markup
Wednesday: TPA Led Coalition Opposes the Open App Markets Act
Thursday: What People are Saying: Antitrust Markups in the Senate
Friday: Tobacco & Vaping 101: 50 State Analysis
Media:
January 28, 2022: Real Clear Policy ran TPA’s op-ed, “Another Federal Agency Gets Blame for Spat Between FCC & FAA.”
January 28, 2022: WBFF Fox45 (Baltimore, Md.) ran TPA’s op-ed, “IG Cumming has delivered for Charm City.”
January 29, 2022: TPA was mentioned in an article by Midland Daily News titled, “Kildee bill would ban stock trading by current members of Congress”
January 31, 2022: WBFF Fox45 (Baltimore, Md.) interviewed me about vacant homes.
January 31, 2022: True North Reports ran TPA’s op-ed, “New York announces $1 billion internet program that includes muni broadband funding.”
February 1, 2022: Patrick Hedger joined ‘The Morning Show with Doug Wagner’ on WMT News Radio (Eastern Iowa) to discuss TPA’s letter to the West Des Moines City Council.
February 1, 2022: The Sun-Sentinel (Ft. Lauderdale, Fla.) ran TPA’s op-ed, “Time to end Florida’s outdated rooftop solar free ride.”
February 1, 2022: The Center Square ran TPA’s op-ed, “App “Antitrust” bill attacks property rights.”
February 2, 2022: Real Clear Markets ran TPA’s op-ed, “Klobuchar-Grassley Bill Obnoxiously Disdains Consumer Preference.”
February 2, 2022: Dan Savickas joined ‘The Barrett Brief’ on Crusade Channel News (New Orleans, LA) to talk news of day.
February 2, 2022: The Livingston Post (Howell, Mich.) mentioned TPA in their article, “Slotkin co-sponsoring legislation to ban members of Congress from trading stocks while in office.”
February 3, 2022: WBFF Fox45 (Baltimore, Md.) interviewed me about postal reform.
February 3, 2022: I appeared on WBOB 600 AM (Jacksonville, Fla.) to talk about the latest jobs numbers.
February 3, 2022: Patrick Hedger joined The Tim Jones & Chris Arps Show on News Talk STL (St. Louis, MO) to discuss the antitrust markup.
February 3, 2022: Fox23 (Portland, ME) interviewed me for a segment and article titled, ‘Amid massive staffing shortages, Maine public safety agencies see increased overtime costs’
Have a great weekend!
