Congress Puts Pressure On The App Stores; Multiple States Plan Digital Ad Tax Laws

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Another Day, Another Grilling

The Senate Judiciary subcommittee on antitrust is continuing its probe into big tech, and the latest hearing drilled down on competition (or, rather, the lack thereof) in Apple’s App Store and Google Play, The Wall Street Journal reports. The usual critics were in attendance, including execs from music streaming service Spotify, online dating service provider Match Group and tracking-device maker Tile. Horacio Gutierrez, Spotify’s chief legal officer, declared that Apple “abuses its dominant position as a gatekeeper to insulate itself from competition and [to] disadvantage rival services such as Spotify.” That, Gutierrez said, hurts consumers by resulting in higher prices, less innovation and fewer choices. According to Tile, Apple boxed out Tile’s products and then copied them, while Match Group testified that it now pays nearly $500 million a year to Apple and Google in app store fees, which is the dating company’s single largest expense, as per The New York Times. Senators on both sides of the aisle weren’t buying Apple and Google’s attempts to defend their company practices; It’s more than possible that hearings at the federal and state level could lead to litigation that weakens Apple and Google’s stranglehold over their app stores.

State Of Affairs

Maryland passed the first-ever digital advertising tax in the US earlier this year – and other states have plans to do the same. As Davis+Gilbert pointed out in a recent note to clients, there are proposals on the boil in New York and Connecticut that would subject digital advertising services to a tax. If passed, these proposed laws would use the revenue to provide zero-interest refinancing of eligible education loans (in the case of NY) or to make one-time direct payments of $500 to individuals who have experienced economic hardship due to COVID-19 (in the case of CT). And then there’s Oregon, which is considering a tax aimed at businesses that generate revenue from selling the personal information of individuals who reside in the state. Oh, and in Indiana the legislature is considering a tax on social media providers with more than one million active users in the state and at least $1 million in annual gross revenue from social media advertising in the state. What will come of all this? It’s hard to say. But at the  least, we’re going to see lots of legal challenges to alter, amend or eliminate these laws if they pass. There’s already been a legal challenge of the tax in Maryland’s federal court. [Related in AdExchanger: “Maryland Passed A Tax On Digital Advertising. What Happens Next?”]

Ad-Supported Appreciation

As the debate continues to rage over privacy and targeting, in Europe folks really seem to dig targeted ads on the Internet. At least, that’s according to new research from IAB Europe, which found that 75% of Europeans say they’d prefer an ad-supported Internet rather than having to pay for access to sites and apps. Read the release. IAB Europe polled 2,400 adult Internet users in Germany, France, Spain, Sweden, Poland and the UK. Nearly half claim they would avoid paying subscriptions and the vast majority said they would reduce their Internet activity to some degree if an ad-supported option wasn’t available. The takeway here, in IAB Europe’s view, is that a subscription-based model would create a fragmented, multi-tiered Internet , which would result in citizens having unequal access to news, information and services depending on their willingness and ability to pay. It would leave news publishers, app developers and other content and service providers competing for sign-ups from a very small pool of subscribers.

But Wait, There’s More!

As Apple gets ready to blow up mobile advertising, this leaked sales deck shows how it was pitching the benefits of personalized ads in 2015. [Business Insider]

The battle for podcast dominance is on as Apple makes its move into subscriptions and Spotify inks an audio partnership with Facebook. [WSJ]

Here are a few possible explanations as to  why Europe is so hard on tech companies, [NYT]

How Campbell Brown, Facebook’s VP of global news partnerships, is working to close the trust gap between publishers and the platform. [Digiday]

Amazon is piloting a new way for brands to email their customers, just as marketers are looking for more hooks to target their audiences while Apple and Google restrict access to data on the Internet and mobile devices. [Ad Age]

Disney has sold out all national TV ad inventory for the 93rd Academy Awards to be aired on ABC on April 25, at a cost of $2 million for each 30-second spot. [MediaPost]

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