Amazon, Facebook, and especially Apple, are gigantic companies that exert a lot of influence in many markets. But at least one United States senator wants to break things up.
As was first reported on Friday by CNBC, United States Senator Elizabeth Warren is making a move to try and break up some of the largest companies in the U.S. All of the biggest companies, in fact, as long as they fall within a certain scope of annual revenue. The original article focuses primarily on the other big companies out there (Amazon, Facebook, and Google), but under Warren’s plan Apple would definitely fall in line.
This is a new bill, and with it a “platform utility” that would be applied to all technology-focused companies that have $25 billion or more in revenue on a yearly basis. Apple definitely falls into that category, just like the other companies do. Warren’s goal is to break up the idea of a digital storefront that overtly helps a single company, especially one that offers its own wares in that storefront.
Meaning, as it relates to Apple, offering a service like Apple Music, while also taxing other companies to have the opportunity to have the same app in their storefront. This is commonly referred to as the “Apple tax”, the 30% cut that the company takes from companies like Spotify — which has been vocal about its contempt for the tax.
There is a blog post about the new initiative, which, in part reads as such:
“Many big tech companies own a marketplace — where buyers and sellers transact — while also participating on the marketplace. This can create a conflict of interest that undermines competition. Amazon crushes small companies by copying the goods they sell on the Amazon Marketplace and then selling its own branded version. Google allegedly snuffed out a competing small search engine by demoting its content on its search algorithm, and it has favored its own restaurant ratings over those of Yelp.”
Warren is, at the least, aiming for a “level playing field” here from tech companies. That would obviously require a lot of change, and one that executives at these companies would likely fight tooth-and-nail to keep the same. For Apple, which sees a huge boost in its quarterly revenue thanks to the App Store, that would mean the company would have to let competing digital storefronts on its devices.
Imagine seeing the Google Play Store on an iPhone and you get the picture.
Apple is not necessarily relying on its revenue piled up from Services, but it’s hard to argue that any major impact to this particular revenue stream would send lasting ripples through the company. Of course, this is just an outline from Senator Warren, and there would be a lot of changes that would go into a final bill — if it ever even sees the light of day.
One can imagine the lobbyists are already gearing up for a lengthy battle.
What do you think of the idea?