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Apple and Google Want U.S. Trade Officials to Attack Anti-Monopoly Law

Public Citizen News / November-December 2021

By Karolina Mackiewicz

This article appeared in the November/December 2021 edition of Public Citizen News. Download the full edition here.

Tech giants Google and Apple are urging U.S. government officials to attack a pro-consumer policy by South Korea as an “illegal trade barrier,” even as the U.S. Congress is poised to pass similar legislation to break up app store monopolies.

The new Korean law would require app stores to allow consumers to use diverse payment systems, not only those controlled by the app store’s home platform. And it forbids the platforms from the current practice of banning app developers from listing on multiple platforms’ app stores.

Google and Apple claim that this law, instead of an anti-monopoly initiative that the U.S. Congress is also considering, is somehow an illegal trade barrier and perhaps even a violation of a free trade agreement between the U.S. and Korea. As flimsy as this claim is, it is a preview of coming attractions of the newest and latest corporate sneak attack via trade agreement.

From the translation of the amendments obtained by Public Citizen, it is clear the requirements apply to all app stores, regardless of the “nationality” of the company. In a letter to U.S. Trade Representative Katherine Tai, Public Citizen experts conclude that the amendments are not discriminatory. Such measures are typical of antitrust laws and competition policies around the world. The fact that the Korean policy could particularly affect American businesses is due exclusively to those businesses’ dominant market position, not because Korea is discriminating against U.S. firms, much less violating trade obligations.

“If the U.S. starts this fight on a nondiscriminatory policy because some U.S. companies don’t like it, then when we have a regulation here that impacts some other country’s platform that is neutral, but it happens to impact them because they’re a big player in the U.S., then that country will come after us,” said GTW Director Lori Wallach in the latest episode of the Rethinking Trade podcast. “It creates a circular firing squad attacking consumer policies so the only winners are a handful of mega big tech platforms.”

Public Citizen urged U.S. trade officials to refrain from criticizing the Korean law and to beware of Big Tech’s larger strategy to avert digital governance.

Big Tech interests’ latest ploy is to hijack trade negotiating venues to lock in binding international rules that limit governments from regulating online platforms in the public interest and from fighting corporate concentration and monopoly power. These interests seek to quickly establish international agreements that quietly undermine regulatory efforts in Congress and U.S. agencies. To obscure this, they have misbranded their attack against the very notion of digital governance as “e-commerce” or “digital trade” policy initiatives.

This is a multi-front effort that includes what is formally called the World Trade Organization (WTO) “Joint Statement Initiative on E-Commerce” negotiations now underway in Geneva among 80-plus countries, a plurilateral Pacific Rim “Digital Economic Partnership Agreement” (DEPA), and various bilateral negotiations.

The Big Tech strategy replicates pharmaceutical firms’ 1990s maneuver of hijacking “free trade” agreements and inserting provisions that require signatory countries to provide the corporations extended monopoly protections and limit policies that lower drug prices.

“These corporate-rigged international agreements end up becoming Trojan horse platforms, where non-trade agendas that are not able to get through the sunshine of public debate and voting in legislative bodies end up getting implemented through the backdoor of a so-called trade deal,” said Wallach.