Hillicon Valley —Apple is not a monopoly, judge rules

Apple is not a monopoly, judge rules

Today is Friday. Welcome to Hillicon Valley, detailing all you need to know about tech and cyber news from Capitol Hill to Silicon Valley. Subscribe here: digital-stage.thehill.com/newsletter-signup.

Apple came out on top in a federal judge’s ruling in the high-profile antitrust case between the tech giant and the Fortnite developer Epic Games. But there may be looming challenges ahead for Apple, with top lawmakers on both sides of the aisle saying the ruling reaffirmed the need for further regulation of app stores. 

Meanwhile, tech industry groups are aligned in their criticism pushing back on a Texas bill signed by the Republican governor that would allow users to sue companies over certain blocked content. 

Follow The Hill’s cyber reporter, Maggie Miller (@magmill95), and tech team, Chris Mills Rodrigo (@millsrodrigo) and Rebecca Klar (@rebeccaklar_), for more coverage.

Let’s jump in.

An ‘Epic’ ruling

Apple is not an illegal monopoly but has engaged in illegal anti-competitive conduct, a California federal judge ruled Friday in the high-profile case brought by Epic Games. 

The verdict: Judge Yvonne Gonzalez Rogers, an Obama appointee, ruled that “the court does not find that it is impossible,” but rather that Epic failed to demonstrate that Apple is “an illegal monopolist.”

“Nonetheless, the trial did show that Apple is engaging in anti-competitive conduct under California’s competition laws,” the judge said in the decision.

Gonzalez Rogers also issued an injunction “permanently” restraining Apple from prohibiting developers from including external links directing customers to options to make purchases outside of the in-app payment system.

Epic, the developer behind the popular Fortnite game, alleged Apple’s App Store rules are anti-competitive. The company said Apple limited developers’ ability to direct consumers to alternative payment methods, collecting up to 30 percent commission fees.

Apple’s take: “Today the Court has affirmed what we’ve known all along: the App Store is not in violation of antitrust law,” Apple said in a statement.

“Apple faces rigorous competition in every segment in which we do business, and we believe customers and developers choose us because our products and services are the best in the world. We remain committed to ensuring the App Store is a safe and trusted marketplace that supports a thriving developer community and more than 2.1 million U.S. jobs, and where the rules apply equally to everyone,” the company added.

Washington weighs in: Top Democrats on the House and Senate antitrust panels said the ruling shows the need for revamped federal antitrust laws. 

“This ruling reaffirms what we heard in our Senate hearing last spring: app stores raise serious competition concerns. While the ruling addresses some of those concerns, much more must be done. We need to pass federal legislation on app store conduct to protect consumers, promote competition, and foster innovation,” Sen. Amy Klobuchar (D-Minn.) said in a statement.  

“Today’s decision is even further evidence that Congress must enact rules of the road to ensure free and fair competition online. While this decision includes some relief for consumers, app developers, startups, and other innovators, it is clear that courts continue to narrowly interpret the antitrust laws in favor of monopolies and against consumers, workers, and small businesses,” House Judiciary Chairman Jerry Nadler (D-N.Y.) and antitrust subcommittee Chair David Cicilline (D-R.I.) said in a joint statement.

GOP antitrust subcommittee members in the House and Senate also used the decision to boost the proposal to further regulate app stores. 

“This ruling is a small step in the right direction. That app developers can communicate directly and not forced to use Apple and Google’s in-app purchasing is a welcome outcome. However, Apple and Google still have monopoly power over app developers,” Rep. Ken Buck (R-Colo.) and Sen. Marsha Blackburn (R-Tenn.) said in a joint statement. 

Read more here. 

 

Tech vs. Texas 

Tech trade groups representing Facebook, Twitter and Google are vowing to fight what Texas is labeling as a crackdown on social media “censorship” of conservatives.

Under legislation signed Thursday by Texas Gov. Greg Abbott (R), social media companies with more than 50 million monthly users are forbidden from banning users based on their political views.

The sites are required to implement a complaint and appeals process for the content they remove, in which they provide a reason that content was removed and a review of their decision. The measure also bans email service providers from impending transmission of emails based on content.

Steve DelBianco, president and CEO of NetChoice, a coalition supporting online businesses, said in a statement that the bill “clearly violates” the First Amendment.

“This law essentially creates a new Fairness Doctrine for the internet which will only make it harder for conservatives to share their news and views online,” he said.

Read more here. 

 

YAHOO’S NEW MATCH

Former Tinder chief Jim Lanzone has been named the new CEO of Yahoo, the company announced on Friday.

In a statement, Yahoo said it will leverage Lanzone’s “deep media experience to drive the next generation of innovation across its world-class content and advertising platforms.”

Lanzone will succeed Guru Gowrappan, who was named senior adviser to Apollo Global Management’s private equity business. Lanzone will begin his new role on Sept. 27.

“I am so honored to have the opportunity to lead Yahoo and represent such an iconic portfolio of brands as we enter a transformational new era for the company,” Lanzone said in a statement.

Read more here.

 

RUSSIA HITS BACK

Russia is blaming U.S. tech companies for interfering with its parliamentary election. 

Russia’s foreign ministry announced Friday they are calling on U.S. Ambassador John Sullivan to meet with Russian Deputy Foreign Minister Sergei Ryabkov over the claims nine days before the election is set to take place, Reuters reported. 

“In this regard it was stated that interference in the internal affairs of our country was absolutely unacceptable,” the statement from the ministry says.

The country said it has “undeniable proof” that tech companies violated Russia’s laws. Although companies were not named in the Friday statement, Russia threatened to fine Google and Apple early in September, citing election interference. 

State Department deputy spokesperson Jalina Porter said in a briefing with reporters Friday Sullivan did have a meeting with Ryabkov but did not confirm if it was a regular meeting or if he was summoned.  

Porter said the department had no comment on the accusation of election interference.

Read more here. 

BITS AND PIECES

An op-ed to chew on: FCC needs to help services for the deaf catch up to videoconferencing tech

Lighter click: Zebra crossing

Notable links from around the web:

Google Could Be Violating Labor Laws With Pay for Temp Workers (New York Times / Daisuke Wakabayashi) 

Civil liberties groups pressure White House to fill surveillance oversight board (CyberScoop / Tonya Riley)

Chinese tech giants are forming unions. It’s not what you think (Protocol / Shen Lu)

Indonesian intelligence agency compromised by suspected Chinese hack (The Record / Catalin Cimpanu)

One last thing: Biden and Xi have a chat

 

 

President Biden spoke with Chinese President Xi Jinping on Thursday amid mounting tensions between the two nations in recent months.

Biden initiated the call, just the second between the two leaders since he took office and the first in seven months. The call was less focused on hot-button issues and more on mending the U.S.-Chinese relationship. 

“The two leaders had a broad, strategic discussion in which they discussed areas where our interests converge, and areas where our interests, values, and perspectives diverge,” the White House said in a statement.

Biden addressed cybersecurity issues during the call, according to CNN, an issue that has been a main source of tension.

Read more about the call here. 

That’s it for today, thanks for reading. Check out The Hill’s technology and cybersecurity pages for the latest news and coverage. We’ll see you Monday.