Apple Inc. is warning that Senate legislation aimed at reining in large tech companies would weaken a privacy-protection tool that it rolled out last year and has already stung Facebook, Snapchat and other online-ad businesses reliant on user data to target messages.
The Senate Judiciary Committee is set to debate a bipartisan bill, dubbed the American Innovation and Choice Online Act, on Thursday that supporters say aims to protect digital competition. The legislation is set to limit the power of the biggest U.S. tech companies, including Apple, Amazon.com Inc., Google-parent Alphabet Inc. and Facebook’s Meta Platforms Inc.
Apple’s hugely profitable App Store business is in the crosshairs after years of pressure from rivals that have complained it takes too large a cut from revenue generated through its app marketplace. The iPhone maker has said congressional efforts to prevent it from prohibiting “sideloading”—the practice of downloading software onto its phones outside of the App Store’s protections—would expose users to security threats because those apps wouldn’t be vetted.
Apple reiterated those claims Tuesday, according to a letter to committee leaders that was viewed by The Wall Street Journal. But the company also argued that the legislation would benefit “those who have been irresponsible with users’ data” and who have opposed a program it rolled out almost a year ago called App Tracking Transparency. The initiative requires third-party apps to seek users’ consent to track their activities across the internet.
“The response to ATT from consumers has been overwhelmingly positive, but some of the largest social media and advertising companies have very publicly complained about the impact of these new privacy protections on their profits,” Apple lobbyist Timothy Powderly wrote in the letter.
A spokeswoman for U.S. Sen. Amy Klobuchar, chairwoman of the Judiciary Subcommittee on Competition Policy, Antitrust and Consumer Rights, called Apple’s letter misleading, saying in a statement that the legislation includes provisions to safeguard privacy and security. Ms. Klobuchar, a Democrat from Minnesota, is a co-sponsor of the legislation.
“All of Apple’s arguments about ‘sideloading’ really amount to a desperate attempt to preserve their app store monopoly, which they use to charge huge fees from businesses they are competing against,” a statement from her office said. “Let’s be clear—this multitrillion-dollar company is more than capable of protecting privacy and security while still giving consumers greater choice by allowing competition.”
While Mr. Powderly didn’t name specific companies, Facebook had publicly opposed the privacy tool’s rollout, arguing it would hurt small businesses that depend upon targeted advertising. Since the tool’s introduction, Meta and Snapchat parent Snap Inc. reported quarterly results that have slowed.
“Under the pending bills, this pro-consumer program would be in jeopardy, as it would be extremely challenging to prove that ATT is ‘necessary, ‘narrowly tailored,’ and that no less restrictive protections are available to obtain user consent for tracking,” Mr. Powderly wrote. “Conversely, companies that collect data would argue that the mechanism currently used to obtain user consent for tracking—a line buried in their terms of service—is sufficient.”
His letter is the latest example of Apple’s efforts to distinguish itself among tech giants as some U.S. lawmakers seek to limit the companies’ acquisitions or the reach of large platforms. In October, Chief Executive Tim Cook cautioned against broad legislative changes that he said would unfairly lump companies together. Regulators and policy makers around the world are also pursuing efforts to curb Apple’s power.
“The industry isn’t monolithic,” Mr. Cook said during an appearance at a tech conference in Salt Lake City at the time. “They’re very different segments and very different markets…We’re not in the social-media business, as an example, and so I think you have to kind of take each one and make sure whatever regulation comes addresses whatever issues that you think exists, and not write regulation that is so sweeping that it not only gets the target but it gets everybody else at the same time.”
As the Senate committee prepares for its hearing this week, Mr. Cook was communicating with members to make his case against the legislation, according to a person familiar with the effort. Punchbowl News earlier reported the interactions.
