After years of frustration and inaction, the world has a once-in-a-lifetime chance to rein in Big Tech’s power. The EU advanced its landmark Digital Markets Act(new window), South Korea put its foot down(new window) on unfair practices, and places like India(new window), Japan(new window), and Australia(new window) are all scrutinizing app store rules. It’s no exaggeration to say that policymakers worldwide are on the cusp of remaking the internet to put choice and competition first.
This momentum has also reached the United States, where two bills we’ve previously covered(new window) (and actively endorse) — the Open App Markets Act(new window) and the American Innovation and Choice Online Act(new window) — have promising odds of becoming law. Both bills have already made it out of committee and enjoy bipartisan support, something unimaginable a few years ago.
With that said, the job is far from done. Congressional leadership still needs to schedule full votes for the bills in the House and Senate. Not only that, but they need to do it in the coming weeks. Washington will soon pivot to this year’s midterm elections before starting from scratch in 2023, meaning lawmakers have a tight window that will close very soon.
Another obstacle is the all-out war being waged against the bills by Big Tech. Apple, Amazon, Google, and Meta spent nearly $17 million on US lobbying in the first quarter alone(new window), with opposing competition reform as their top goal. Big Tech advocacy groups have likewise put $36 million into attack ads(new window) against the bills, targeting vulnerable policymakers in swing districts(new window).
These efforts have conveyed a variety of arguments (some merely implausible, others outrightly dishonest), but one that routinely comes up is the idea that putting guardrails on the online economy will irreparably harm consumer privacy. As a privacy-first service, we want to address this claim.
Building a competitive internet: the basics
It’s worth reiterating what the bills in question would actually do because when Big Tech says they would hurt consumer privacy, what they mean is that they would hurt them — specifically their monopoly profits. The proposals in Washington are targeted and moderate by design, with two straightforward goals: lower barriers to competition for developers and maximize choice for consumers. They would, among other things:
- Allow you to uninstall preinstalled apps and easily change your phone’s default settings.
- Ensure that the app search results and rankings you see are fair.
- Make it easier for apps to tell you about promotions and cheaper options for buying their services.
- Reduce prices by ending Apple and Google’s 30% app store sales fees, which drive up costs for developers and routinely get passed on to you.
- Pave the way for alternative app stores and empower you to find services without going through Apple and Google
Taken together, the bills would stop Big Tech from preferencing their services on the platforms they control and make it simpler for you to buy and download services. Considering that over 60% of global internet browsing(new window) is done on smartphones and that Apple and Google control 98% of the smartphone market(new window), it’s clear these changes would inject more choice and competition into the internet.
The status quo is bad for privacy
There is every reason to think these changes would improve privacy online. This is borne out both by basic economic principles and expert testimony, but skeptics should first consider why the status quo is bad for privacy.
We’ll start with the harmful effects of the 30% app store fees mentioned above. For developers selling a paid service, a 30% loss in revenue incentivizes them to compensate elsewhere. One option is building more and better services. However, for many companies, collecting and monetizing your data is much easier (this lucrative option has morphed into its own industry(new window)). It’s not hard to see how this encourages a long-term trend that’s harmful to privacy.
Some developers will take it further and make their services completely free, which only compounds the data monetization incentive. From a company’s point of view, free apps mean no 30% fees, but it also increases the company’s reliance on selling information to data brokers and advertisers. That dilemma has fueled surveillance capitalism(new window), turning you into the product rather than the consumer. Just because a service costs nothing doesn’t mean it’s free. In many cases, you’re paying with your data.
Some companies (like Proton) resist this and offer paid subscriptions for privacy-first products. But it’s hard to withstand the massive app store fees, which function as a tax on privacy and limit the reach of services that put people first. By maintaining the status quo, we are ultimately subsidizing Big Tech’s invasive surveillance capitalism business model. It’s one thing to give 30% of your sales to a competitor. It’s another to give 30% to a business model that’s fundamentally opposed to our own.
Considering Big Tech’s poor track record of protecting user privacy (with mishaps like approving stalkerware apps(new window) and unwittingly handing over data to hackers(new window) being relatively common), it is unlikely they’ll get any better without meaningful competition. Tech giants can currently self-preference their products in search results, preinstall their apps on devices, lock consumers into closed ecosystems(new window), and extract major fees from alternative providers. All of this is the opposite of competition. It’s entrenchment, and it comes at the expense of privacy.
Greater competition and choice are good for privacy
People in the US are understandably not happy with the status quo. Research from Pew shows(new window) that 81% of Americans feel they have no control over their data and that 79% are very or somewhat concerned over how companies use their data. Other analyses show broad skepticism about the Big Tech data practices(new window) of companies like Facebook, TikTok, Google, and Apple.
Research also shows that 54% of Apple users opted out of cross-phone tracking(new window) when given the option (a number that rockets up to 96%(new window) when you only look at Americans). This shows that Americans are deeply dissatisfied with the current privacy landscape and will jump at the option to utilize features and products that protect their data.
This is where a level playing field comes in. If people have greater choice over the services they use, it’s clear they will choose ones that honor their privacy. And in that competitive marketplace, services will be incentivized to at least consider improving their own privacy policies.
This would have ripple effects throughout the internet, which is why Former Secretaries of the Department of Homeland Security Tom Ridge and Janet Napolitano say that the app store bill would move platforms, developers, and payment processors to improve their data practices(new window). Consumers know what they want, and true competition would require companies to deliver it. It’s the kind of rising tide that would give everyone a better data environment.
This is good news for consumers, but it takes on added significance with the United States’ lack of a federal privacy law. Indeed, while the government waits to put policy guardrails on data, it’s no exaggeration to say that greater competition is a precondition for better consumer privacy in the United States.
What about app distribution?
Big Tech tends to conveniently ignore many of the arguments around incentives and business models raised here and instead focus on particular fears about app distribution. They claim that letting people download services without going through a mobile marketplace will inevitably lead to cybersecurity disasters. This is an intentional distraction. Operating systems and devices — not app stores — are what protect your data. Technologist Bruce Schneier has said as much(new window), and nothing in the bills would spell the end of firewalls, antivirus protection, or other operating system security features.
The more important point here is what the claim implies. By saying that you must go through gatekeeper channels to download apps, Big Tech companies are essentially claiming that only they can keep you and your information safe. This is plainly not the case when you consider what they already do with your data. It’s also untrue when you survey the numerous other services that can protect your financial transactions, documents, photos, and so forth.
Big Tech ignores this rebuttal because it knows its definition of privacy is insufficient. Their claim that “your data is safe from everyone except us”, is not enough. True privacy is saying “your data is safe from everyone, including us”. Despite policy tweaks or product changes, Big Tech’s pitch fundamentally struggles to stack up against true privacy, which is another reason for its anti-competitive behavior.
If you are a US voter, make your voice heard!
The United States has a rare opportunity to unleash tech innovators and empower citizens. There is simply no reason to believe that making the internet fairer will harm your privacy, which is why we cannot allow Big Tech to use fake concerns about privacy as a pretext to avoid competition. If you’re a US voter, the best way to do that is to contact your representative and say you support the Open App Markets Act and the American Innovation and Choice Online Act.