Bill targeting Apple and Google approved by U.S. Senate panel

The measure would bar big app stores from requiring providers to use their payment system.

A 3D printed Google logo is placed on the Apple Macbook in this illustration.

The Senate Judiciary Committee on Thursday voted to approve a bill that would rein in app stores of companies they said exert too much market control, particularly Apple Inc and Alphabet Inc's Google.

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The measure, sponsored by Democratic Senators Richard Blumenthal and Amy Klobuchar along with Republican Senator Marsha Blackburn, would bar big app stores from requiring providers to use their payment system.

Blumenthal noted the 30% cut that Google and Apple take for many app and in-app purchases and subscriptions, saying it was a sign of "monopolistic power" and raises prices for consumers.

Blackburn accused Silicon Valley executives of "arrogance" and refusing to engage with Congress.

"I don't want to say or have people think that I'm saying that big tech is bad, because big is not bad. But it is clear that guardrails are now needed," added Blackburn.

Apple said in a letter sent to key lawmakers that the measure favoured "side-loading," or loading apps on to Apple devices without using the company's App Store, which would allow those app companies to avoid what the letter called Apple's "pro-consumer privacy protections."

Google has already lowered the commission it charges apps for using its payment system even though it will reduce its revenue.

"We've made our concerns to Congress clear. This bill could destroy many consumer benefits that current payment systems provide and distort competition by exempting gaming platforms, which amounts to Congress trying to artificially pick winners and losers in a highly competitive marketplace," said Mark Isakowitz, a Google vice president for public policy.

The stakes are high for Apple, whose App Store anchors its $68.4 billion services business as the smartphone market has matured.

The biggest technology companies, including Meta Platforms Inc's Facebook and Amazon.com, have been under pressure in Congress because of allegations they abused their outsized market power.