David Cicilline’s Anchoring Strategy

Ben Thompson, writing last week about the four legislative proposals released by the House Subcommittee on Antitrust:

I don’t think it is an accident that these bills were presented as a package, but I think it has been a mistake in a lot of coverage to view the package as one bill. It seems to me that Chairman Cicilline has played his cards very deftly here: start with the fact that while every bill was authored by a Democrat, they all have a Republican co-sponsor; if some combination of these regulations pass they will likely be with overwhelmingly Democratic support, but the fact they are starting out as nominally bi-partisan efforts is savvy.

The real tell about Cicilline’s strategy, though, is the seeming contradictions between his own bill and that of Representative Jayapal. Cicilline seeks to restrict platforms from behaving in non-discriminatory ways, with the threat of break-up if they don’t, while Jayapal jumps straight to break-up. This strikes me as an anchoring strategy: Jayapal’s approach is both unworkable and undesirable — it leaves the FTC and ultimately the courts as the ultimate arbiter of what is part of a core platform’s offering and what rests on top, and not only does that evolve as technology matures, it also makes it impossible to deliver an experience that is approachable for regular consumers. As I noted above, is a networking stack part of an operating system? Is a browser? Is an App Store? Moreover, Jayapal’s bill, if enacted, makes Cicilline’s bill immaterial: there would be nothing to discriminate against.

That’s why I suspect that Cicilline’s goal is to stake out the most extreme position — the Jayapal bill — with the goal of getting his own bill passed as a compromise, perhaps with Scanlon’s as well.

Here’s Thompson’s description of Jayapal’s bill:

[I]nstead of banning discriminatory behavior it simply bans platforms from owning any product or service that rest on top of its platform and compete with 3rd-parties in any way. The provision is as broad as it sounds, which is interesting to think about in a historical context: operating systems used to sell the networking stack separately — would it be illegal now for iOS to include TCP/IP? That’s just one obvious example of how this bill would quickly devolve into product design by the judiciary.

I don’t think it’s any exaggeration to say that the Jayapal bill would profoundly change Apple and all of Apple’s products, platforms, and above all, services — in ways that ultimately would be ruinous for the company as we know it. It’s a “throw the baby out with the bathwater” bill that betrays a profound misunderstanding of how platforms evolve. Even if it is just an anchoring strategy to make Cicilline’s own bill look moderate in comparison, Apple should be extremely concerned that Jayapal’s bill is even on the table.

★ Monday, 21 June 2021