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Why is Congress Putting Facebook’s Profits Over Small Business?

By ACT | The App Association
Posted March 4, 2022 at 2:50pm

Congress is now considering a government takeover of app stores. Lawmakers say they’re taking on social media giants like Facebook—and yet, Facebook would benefit enormously from this rash rewrite of antitrust law, while small app makers would bear the costs.

Limit Opportunities for Small Business, Says Congress

App developers and related businesses employ more than 5.9 million Americans, across all 50 states, comprising a 1.7 trillion-dollar app economy. The app economy has created the highest job growth of any industry in Colorado, Georgia, Maryland, New York, North Carolina, Ohio, South Carolina, and Virginia.  For small app makers, the app stores are a key ingredient to their ability to continue this incredible growth. The last thing small developers want is for Congress to undermine them so that Facebook can squirm free of software platform-imposed restrictions on its vast data collection enterprise.

 Your Privacy is For Sale, Says Congress

The reason is simple: The American Innovation and Choice Online Act (S. 2992) and the Open App Markets Act (S. 2710) would prohibit the app stores’ privacy controls that prevent Facebook from tracking you across apps without your express consent. The proposals would open up treasure troves of consumers' most sensitive data, and yet we still lack a strong federal privacy law that sets rules of the road for protecting, processing, and providing transparency about personal information.

Your Data is Facebook’s Reward, Says Congress

The bills’ proponents are willing to open up unfettered access to your data, device features like your camera and microphone, and even your wallet to Facebook and to blatant fraudsters, in order to achieve their antitrust expansion priorities. Funny how their interests line up neatly with those of Facebook, which, if the bills were enacted, stands to rake back billions in advertising revenue lost when consumers chose not to be tracked across apps on their phones. Of course, the changes these bills force on app stores would benefit the largest companies that do business on the platforms, like Facebook, while hurting App Association member companies the most. If consumers lose trust in the app stores, the resulting reluctance to download new software hits the smallest app makers the hardest.

Small Business Pain is Facebook’s Gain

Facebook clearly places a high value on the ability to evade software platform-imposed restrictions on its data collection and monetization activities. S. 2992 and S. 2710 do not just provide wiggle room, they provide a wide avenue with formidable federal enforcement capabilities keeping the avenue free of obstacles. Unfortunately, that road would be paved with App Association member prospects and the consumer harms certain to result from an ad-supported environment dependent on manipulation, which federal policy would protect, not prohibit.

Congress should ditch these ill-conceived antitrust bills and focus on what consumers and small businesses really want - comprehensive national privacy legislation.