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The bill that would upend the App Store

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Good morning! This Thursday, senators unveiled new app store legislation, Samsung bids farewell to the Galaxy Note, and China's big tech regulators aren't backing down.

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The Big Story

And then they came for the app stores

A bipartisan group of three senators unveiled a bill yesterday that would force Google and Apple (and any other app store with more than 50 million users) to let apps communicate with users about prices, protect sideloading and allow third-party app stores. The measure — from Sens. Richard Blumenthal, Amy Klobuchar and Marsha Blackburn — marks a major federal effort after the two device companies beat back attempts to regulate app stores in the states.

Many developers complain about Apple and Google extracting a financial cut from transactions on their operating systems, and how they won't let the app companies communicate with users about ways to get around the fee.

  • Apple and Google, for instance, are both facing lawsuits from Epic over such complaints, and app stores are at the heart of a multistate lawsuit against Google.
  • Lawmakers have been unhappy with the practices as well. But this is the closest they've come to turning that unhappiness into legislation.

This was a bill that launched a thousand statements, with a surprisingly diverse coalition of left and right tech skeptics, government officials, app companies and think tanks making clear that this bill had political heft.

  • Blumenthal, the measure's lead sponsor, called it a "breakthrough blow against Big Tech bullying."
  • Klobuchar, who chairs the Senate's subcommittee on competition, labeled the bill "an important step forward in ensuring an innovative and competitive app marketplace." She'd be in charge of any major package of antitrust.
  • Blackburn, whose support could signal more interest to come from Republican lawmakers who are critical of tech, said the sponsors "are committed to ensuring U.S. consumers and small businesses are not punished by Big Tech dominance."

More opinions came from well beyond the Hill. Republican FCC Commissioner Brendan Carr said: "The gatekeeper power that corporate behemoths now exercise over the app economy is harming consumers and competition. This legislation is a thoughtful way to eliminate those harms while promoting innovation."

  • Corie Wright, VP of public policy at Epic Games, said that "this will make it easier for developers of all sizes to challenge these harmful practices and seek relief from retaliation, be it during litigation or simply because they dared speak up."
  • Meghan DiMuzio, executive director of the Coalition for App Fairness, which counts Epic, Match, Spotify and other complainants as members, said it was a "courageous and visionary leadership on this important issue."
  • And Andy Yen, CEO of the secure email service Proton, said that this is "a bill that would unleash a seismic level of innovation."

Not every response was so gushing. The companies and their allies argued that user safety could be at risk without the vetting process that apps go through once they're put in the App Store.

  • Apple doubled down on its stance that the App Store's main purpose is to protect users from buggy and nefarious apps. "Since our founding, we've always put our users at the center of everything we do, and the App Store is the cornerstone of our work to connect developers and customers in a way that is safe and trustworthy ... At Apple, our focus is on maintaining an App Store where people can have confidence that every app must meet our rigorous guidelines and their privacy and security is protected."
  • Morgan Reed, president of ACT | The App Association, which counts Apple as a sponsor, agreed, saying that "App Association members demand platform-level privacy and security measures, removal of fraudsters and copyright thieves, and rigorous vetting of any new software."
  • And Adam Kovacevich, a former Google official who now heads the pro-tech industry group Chamber of Progress, said: "I don't see any consumers marching in Washington demanding that Congress make their smartphones dumber."
  • Google didn't have a direct comment but pointed out that Android allows sideloading and plenty of apps don't pay the fees, which focus on digital goods from bigger sellers.

It's been a tense few months of Apple playing defense, with big developers attacking its App Store policies and a looming decision — that's sure to be appealed — in the company's landmark antitrust lawsuit. But with this latest piece of legislation, it doesn't look like things will ease up anytime soon, either.

— Ben Brody (email | twitter)

A MESSAGE FROM SINGAPORE EDB

Expanding to Asia can be difficult, but Singapore is here to help. The Singapore Economic Development Board's guide to setting up in Singapore has all the information you need to find the right partners, talent, and connections to succeed in Asia.

Learn More

People Are Talking

Facebook's ad privacy changes signal a bigger shift in anonymous ad tracking, Facebook's Graham Mudd said:

  • "You can assume that over time they do become more anonymous, or at least more privacy conscious for sure."
You should read this interview with Apple's Erik Neuenschwander on Apple's approach to CSAM detection:
  • "Even in the case where we're talking about some attempt to change the system, it has a number of protections built in that make it not very useful for trying to identify individuals holding specifically objectionable images."

Rand Paul was suspended from YouTube for misinformation, and he's proud of it:

  • "A badge of honor … leftwing cretins at YouTube banning me for 7 days for a video that quotes 2 peer reviewed articles saying cloth masks don't work."

Gary Gensler told Elizabeth Warren the SEC needs more help with crypto regulation:

  • "I believe we need additional authorities to prevent transactions, products and platforms from falling between regulatory cracks. We also need more resources to protect investors in this growing and volatile sector."

Robots are taking over restaurants. That's a relief, Hyphen CEO Stephen Klein says:

  • "It's freeing up the repetitive tasks, just like you did with ATMs in bank branches or the grocery check-out aisle at your local Safeway."

Making Moves

Reddit raised $700 million, and is now valued at over $10 billion. The series F round comes after a $250 million series E in February.

Aiways is looking into a U.S. IPO. The electric car company is based in Shanghai and could be looking to raise $300 million in its listing, sources told Bloomberg.

Meanwhile, Pony.ai paused its IPO plans. The company reportedly got cold feet as China cracks down on overseas listings.

ServiceNow bought Mapwize for an undisclosed amount. Mapwize helps companies visualize the insides of their offices.

Varun Parmar is joining Miro, the online whiteboard platform, as chief product officer. Parmar previously held the same role at Box.

Christy Pambianchi is heading to Intel to be its next chief people officer and EVP. She previously served as EVP and chief HR officer at Verizon.

John Hurley is joining Quantum as chief revenue officer. He previously led global commerce at Cisco.

Gary Messiana is Functionize's new CEO. He was most recently CEO of the IT company Mesh7.

In Other News

  • The U.K. might force Facebook to sell Giphy. The country's antitrust regulator provisionally found that Facebook's Giphy acquisition will negatively impact social media competition. If the provisional findings are confirmed, the U.K. would require a forced unwinding.
  • DoorDash looked into buying Instacart. It would have paid up to $50 billion, The Information reported, but worried about antitrust regulators shutting the deal down and ultimately just gave up.
  • China's big tech regulators are in for the long haul. The country's state council said it's continuing to push anti-monopoly, tech and national security over the next few years by probing issues like AI, online financing and cloud computing.
  • You're not imagining things: Twitter looks different. The company rolled out a new font called Chirp, made the platform a tad less blue and tweaked spacing around text.
  • Amazon has a new air hub in Northern Kentucky, which the company hopes will help it speed up its deliveries. The $1.5 billion facility will serve as Amazon's home for its nationwide cargo operations.
  • The crypto hackers are giving the cash back. The group that staged one of the largest digital currency thefts to date, stealing $610 million, returned just less than half of the money, and plans to eventually give the entire sum back.
  • Instagram is introducing a few more security features. The platform is allowing users to limit the number of people who DM them, and it expanded its hidden words tool to rat out a larger list of potentially offensive words and phrases.
  • On Protocol | Workplace: Passbase is being sued for alleged gender and racial discrimination. While the company promised an inclusive workspace, Rose Wanjugu Mwangi is claiming the company didn't pay her enough for her expertise and didn't take her complaints seriously.
  • Bye-bye, Galaxy Note. At Samsung's Galaxy Unpacked yesterday, the company instead introduced foldable phones, new wireless earbuds and smartwatches.

One More Thing

Samsung's backstory

And speaking of Samsung: It's one of the biggest companies in the world, but how did it get to be what it is today?

Geoffrey Cain's book "Samsung Rising" goes behind the scenes, looking at how the company went from a follower to a leader since it broke into the computer chip industry decades ago. It offers a good insight into the people and decisions that helped it expand, especially as it's one of the biggest players in the phone market.

A MESSAGE FROM SINGAPORE EDB

Expanding to Asia can be difficult, but Singapore is here to help. The Singapore Economic Development Board's guide to setting up in Singapore has all the information you need to find the right partners, talent, and connections to succeed in Asia.

Learn More

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Correction: An earlier version of this story stated the incorrect name for Adam Kovacevich's group. This story was updated on Aug. 12, 2021.

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