Senate bill would raise big tech antitrust penalty to 15% of revenue
U.S. Democratic Senators Amy Klobuchar and Richard Blumenthal introduced a new bill on Friday, the "Monopolization Deterrence Act," which if passed could impose stiffer penalties on companies like Apple and Facebook if they're caught in anticompetitive practices.
The bill would enable the Federal Trade Commission and Department of Justice to pursue new civil penalties, Reuters reported. In theory these could reach as much as 15% of a company's U.S. revenue, which in the case of Apple would represent $39.84 billion for 2018 alone.
The legislation comes at a time of intense attention on antitrust issues and suspicion that tech firms don't pay meaningful penalties for violations. The FTC recently fined Facebook $5 billion for the Cambridge Analytica scandal, but the company's 2018 revenues were over $55.8 billion, making that relatively easy to recover from.
Both the FTC and DOJ are now engaged in — or preparing for — serious probes of Apple, Amazon, Google, and Facebook. Representatives for all four of those companies appeared in front the House Judiciary Committee in July to defend their practices.
Criticism of Apple has frequently focused on the App Store. The company prevents developers from selling iPhone and iPad apps anywhere else, yet it takes a 15-30% cut, which multiple U.S. lawsuits say artificially inflates end prices. In a European complaint, Spotify noted that this gives Apple services an edge, compounded by the fact that they come pre-installed and more deeply integrated into software.
Apple has denied any wrongdoing. In its defense the company has claimed developers are buying a package of services with the revenue split, such as marketing. It remains to be seen if that argument with appease jurors or the U.S. government, given that other online stores offer similar benefits without exclusivity.
Klobuchar is one of several Democratic Presidential candidates that have made tech monopolies a talking point. Perhaps the most famous is Sen. Elizabeth Warren, who has called for a Bell-style breakup of tech giants such as Apple.