While much of the Senate Judiciary Committee’s meeting next Thursday, February 3, will focus on the pending Supreme Court nomination, the Committee is still scheduled to mark up and vote on the Open App Markets Act (S. 2710)—which purports to address unfair competition in the app market.  This vote follows a particularly contentious markup of the American Innovation and Choice Online Act (S. 2992)—a more sweeping piece of legislation that addresses platforms self-preferencing their own goods or services.  Though that bill was voted out of Committee on a 16-6 vote (with all Democrats voting yes), concerns were raised by both parties about its scope.  Because the Open App Markets Act is a much more targeted piece of legislation, the degree to which members raise similar concerns on Thursday will be a good bellwether of the level of openness or resistance to passing any form of antitrust legislation this Congress.

The Open App Markets Act primarily prohibits “covered companies” from: (1) requiring developers to use an in-app payment system owned or controlled by the company or any of its business partners as a condition of distribution on an app store or accessibility on an operating system; (2) requiring as a term of distribution on an app store that pricing or conditions of sale be equal to or more favorable on its app store than another app store; or (3) taking punitive action or otherwise imposing less favorable terms and conditions against a developer for using or offering different pricing terms or conditions of sale through another in-app payment system or on another app store.  A covered company is defined as “any person that owns or controls an App Store for which users in the United States exceed 50,000,000.”

Senator Blumenthal (D-CT) introduced the bill, and it has ten cosponsors that include five Republicans on Committee and its Chair, Senator Durbin (D-IL).   Interestingly, the legislation’s lead Republican cosponsor, Senator Blackburn (R-TN), voted against the American Innovation and Choice Online Act.  She explained that the Committee needs to be sure that legislation dealing with the virtual marketplace encourages competition, rather than impedes it—and so asked for more hearings.  She also mentioned the need address intellectual property rights, privacy, and censorship.

Those same issues with the American Innovation and Choice Online Act were echoed by Democrats like Senator Coons (D-DE), who explained that he had “significant concerns to balance about whether or not this bill achieves the right balance between the costs and inefficiencies of litigation and compliance and potentially unintended negative consequences on the competitiveness globally of our digital democracy principles on the world stage.”  Senator Lee (R-UT)—Ranking Member of the Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights—was even more forceful:  “I worry a lot about the broad scope and the vague language that it contains that I believe would lead to an untold number of unintended and unforeseen consequences like harming many of the very same consumers that we are trying to protect.”  There are also some Committee members, including Senator Dianne Feinstein (D-CA), who believe that the bill is not broad enough:  “It’s difficult to see the justification for a bill that regulates the behavior of only a handful of companies while allowing everyone else to continue engaging in the exact same behavior.”

It is unclear how many of those same concerns will be voiced when the Committee takes up the Open App Markets Act.  Even if the Committee approves the bill with a stronger vote than the American Innovation and Choice Online Act, however, that does not mean there is an easy path to passage.  The Senate is divided 50-50, House Democrats only have a slim majority, and the House Committee on Energy and Commerce has not yet considered companion legislation.  Nonetheless, members like Senator Klobuchar (D-MN) and Representative Cicilline (D-RI) will continue to push for Congress to act on a variety of substantial antitrust measures.  If there is continued to resistance to more controversial legislation like the American Innovation and Choice Online Act, Democrats could embrace more targeted bills like the Open App Markets Act to show an accomplishment here.

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Nicholas Xenakis

Nick Xenakis draws on his Capitol Hill experience to provide regulatory and legislative advice to clients in a range of industries, including technology. He has particular expertise in matters involving the Judiciary Committees, such as intellectual property, antitrust, national security, immigration, and criminal…

Nick Xenakis draws on his Capitol Hill experience to provide regulatory and legislative advice to clients in a range of industries, including technology. He has particular expertise in matters involving the Judiciary Committees, such as intellectual property, antitrust, national security, immigration, and criminal justice.

Nick joined the firm’s Public Policy practice after serving most recently as Chief Counsel for Senator Dianne Feinstein (C-DA) and Staff Director of the Senate Judiciary Committee’s Human Rights and the Law Subcommittee, where he was responsible for managing the subcommittee and Senator Feinstein’s Judiciary staff. He also advised the Senator on all nominations, legislation, and oversight matters before the committee.

Previously, Nick was the General Counsel for the Senate Judiciary Committee, where he managed committee staff and directed legislative and policy efforts on all issues in the Committee’s jurisdiction. He also participated in key judicial and Cabinet confirmations, including of an Attorney General and two Supreme Court Justices. Nick was also responsible for managing a broad range of committee equities in larger legislation, including appropriations, COVID-relief packages, and the National Defense Authorization Act.

Before his time on Capitol Hill, Nick served as an attorney with the Federal Public Defender’s Office for the Eastern District of Virginia. There he represented indigent clients charged with misdemeanor, felony, and capital offenses in federal court throughout all stages of litigation, including trial and appeal. He also coordinated district-wide habeas litigation following the Supreme Court’s decision in Johnson v. United States (invalidating the residual clause of the Armed Career Criminal Act).