ÂÜÀòÊÓƵ

Two operating systems, Apple iOS and Google Android, dominate the mobile app ecosystem and, over the last decade, a worldwide consensus has emerged on two issues. First, these platforms have amassed significant, persistent market power with which to extract monopoly rents from consumers and business users, and they frequently act anticompetitively and abusively to protect it. Second, traditional enforcement under existing abuse-of-dominance and monopolization statutes has been too slow and too uncertain to deter these megafirms, which command resources and power exceeding those of many countries and governments.

While traditional enforcement of existing competition laws has produced some significant cases in the US, Europe, Brazil and elsewhere, there have also been new legislative efforts. Laws have been passed, or are being considered, in various jurisdictions around the world, each with the goal of reining in the power and abuses of Big Tech.

Even in the US, there was bipartisan support for the Open App Markets Act in 2022. That year, the bill made significant in Congress, passing the Senate Judiciary Committee with a 20-2 favorable vote. But, owing to the Senate leadership’s priorities, it was never given a floor vote and now the need for such legislation is even more apparent. American consumers and businesses continue to suffer from the exploitative conduct of the digital gatekeepers, which excessive rents and fees, crush competing businesses and business models and wield undue influence (sometimes through outright denial of access) over new apps and technologies.

Ensuring open competition is crucial if existing and aspiring independent developers and innovators are to build their businesses, create jobs and benefit consumers. The countries that get this right — and that do so quickly — will become the next big destinations for investments in digital innovation.

Consumers and businesses continue to suffer from the exploitative conduct of the digital gatekeepers

Gene Burrus

The opportunities available to those who restore meaningful competition will be immense. This is not just speculation. Decades ago, it was Silicon Valley that championed antitrust enforcement against Microsoft, which effectively controlled access to the internet at the time. The US Department of Justice took the lead and, thanks to its effective enforcement, the tech companies that we now know as household names were able to flourish. Would companies like Apple and Google have thrived, or even survived, if Microsoft had been allowed to extract 30 percent of their revenues or unfairly compete with their products on PCs? Or would they have gone the way of Netscape?

We face a similar situation today, only now it is Apple and Google that control the platforms — mobile devices — where consumers increasingly (and, in many cases, exclusively) access internet services and information. Whether we can unleash a new wave of independent innovation, investment and business growth to rival that of the last 20 years will depend on whether we can address the problem of market power.

The opportunity for American developers, businesses and consumers cannot be understated. Just as Silicon Valley saw massive growth in the early 2000s thanks to US antitrust leadership against Microsoft, the countries that lead in this decade will be where innovative businesses are drawn to invest and grow. The alternative is indefinite control of our digital lives by two of the largest and most powerful companies in human history, not for the sake of innovation and entrepreneurship, but simply to protect their financial interests.

The countries that lead in this decade will be where innovative businesses are drawn to invest and grow

Gene Burrus

As the rest of the world acts, it is important that the US take a leadership role, rather than deferring to others and awaiting the uncertain vagaries of piecemeal litigation that might take a decade to work itself out. That means passing new legislation to ensure that all businesses can compete and succeed or fail on the merits of their offerings, rather than because they happen to be aligned with the current gatekeepers’ financial interests. Although litigation ultimately worked 25 years ago (with Apple and Google being the biggest beneficiaries), it came too late for many companies that tried to compete in the 1990s.

The Open App Markets Act would ensure that American consumers can benefit from lower prices and innovations from all corners of the digital economy. It would prevent mobile gatekeepers from unfairly leveraging their power over mobile devices to pick winners and losers, and to demand extractive fees from everyone doing business on the mobile internet. It would ensure that these mobile ecosystems are platforms for all innovators and entrepreneurs, not just those aligned with the current behemoths’ financial interests. And it would do so in a time frame that would benefit today’s companies and consumers, rather than those that might be around a decade from now.

Many may not even realize what they are missing, given how dominant the two mobile gatekeepers have become. But America (and the world) has a choice: unleash the next wave of business growth or become a vassal of digital gatekeepers whose highest priority is safeguarding their rents.

• Gene Burrus is a competition law attorney.

Copyright: Project Syndicate