with Aaron Schaffer

Tile plans to escalate its battle with Apple in front of the Senate at a key antitrust hearing later today. 

Kirsten Daru, Tile’s general counsel, will testify before Congress again just a day after Apple unveiled a new product called AirTags, which will directly compete with Tile in helping people track their items. 

The AirTags release “paints the perfect picture of precisely how Apple uses its ownership and dominance over the entire ecosystem to disadvantage competition,” she said in interview with me

Daru contends Apple is giving its own trackers advantages on the iPhone that other device makers don’t enjoy, which makes their finding capabilities more precise and the devices easier to set up. 

Tile's criticisms of Apple were cited in last year’s House antitrust investigation concluding that Apple wields “monopoly power” over how software is distributed to Apple devices. Daru plans to tell senators the investigation’s conclusions have “seemingly done nothing” to deter Apple’s behavior and accuse the company of continuing to exploit its power to Tile’s detriment.

Sen. Amy Klobuchar (D-Minn.), who chairs the Senate Judiciary subcommittee hosting today's hearing, called Apple’s product launch “Exhibit A” as lawmakers seek evidence of competition problems in the app store ecosystem.

“It’s timely given this is the kind of conduct we’ll be examining at the hearing, and Apple and Tile will both be in the room,” she said during an interview.

Expect Apple to push back: Apple argues that its phones are more valuable when they work with more services and apps, and that its ecosystem has contributed to the growth of Tile’s business.

“We have always embraced competition as the best way to drive great experiences for our customers, and we have worked hard to build a platform in iOS that enables third-party developers to thrive,” Apple spokesman Fred Sainz said in a statement.

Tile’s testimony highlights a fundamental challenge with Washington’s current antitrust moment. 

Tech giants are known to move fast, constantly releasing new products and services that directly compete with rivals, or acquiring smaller start-ups. Meanwhile, efforts to craft and pass changes to antitrust laws or bring lawsuits against companies frequently consume multiple years. The Justice Department brought an antitrust lawsuit against Google in October 2020, for instance, but it isn’t expected to go to trial until at least late 2023.

Daru hopes that by speaking out publicly she will compel lawmakers to move quickly to pass legislation preventing large tech companies from using their dominance to give their own products and services an upper hand over rivals.

“We are hopeful that we will see legislative reform, and the sooner the better,” Daru said. “We’re already seeing all of these known abuses affect industry and innovation in this country, and in effect consumer choice. The longer we wait, the bigger and more powerful Apple is going to become and it’s just going to be harder.”

Klobuchar says lawmakers recognize the urgency of the competition issues in the tech industry, and that’s why she’s trying to pass legislation “very soon” to better fund agencies that do antitrust enforcement. She said in the House and Senate, lawmakers are trying to break up antitrust reform proposals into smaller bills focused on issues that have bipartisan support and a better chance of passing Congress.

Here are some of the main concerns Tile will share with the committee today: 
  • Apple's new AirTags will allow users to automatically connect to their phones without requiring them to open an app, making it easier to use versus rivals. Tile users, meanwhile, have to go through a more clunky process to enable their trackers on iPhones, making changes deep in their phone settings.
  • Apple also says AirTags will use ultra-wideband technology, which is available on newer iPhones and permits users to get more precise details about the location of lost items. Tile devices currently rely on Bluetooth signals, which can tell users which room a lost object is in; with the ultra-wideband technology, Apple goes further by identifying the precise location of users’ lost objects. 
  • Daru also plans to home in on the Find My program, which recently launched and was seen as an olive branch to allow developers to use Apple’s vast network of signals from hundreds of millions of iPhones, iPads and computers to track devices. She says for Tile’s devices to work with Apple’s network, it would have to abandon its own network and app, and instead direct people to use Apple’s FindMy app. 
  • Tile also plans to criticize the 30 percent fee Apple takes for purchases made in its app, arguing that under Apple’s guidelines, it should be exempt from paying it. Spotify and Match have also criticized this fee, and it’s one of the top issues in a lawsuit brought against Apple by Epic Games, the maker of Fortnite.
  • Daru also will tell lawmakers that Apple has not followed through on commitments to make changes to settings on phones making it easier for people to set up their Tile devices.

Apple argues that the Find My network is a private and secure way for people to keep track of important belongings, and that Tile is free to join the program at any time. Apple has defended the fees it takes from developers, and under pressure, it cut its commission rate to 15 percent for software developers with less than $1 million in annual sales on its platform. 

Tile is not alone in its criticism of Apple’s business practices. 

Officials from other Apple foes, including Spotify and Match Group, are scheduled to appear at the hearing. Spotify plans to criticize Apple’s requirement that developers exclusively use its payment system for in-app purchases, according to excerpts of the company’s testimony reviewed by The Post.

“Without immediate help and specific rules, Apple and other gatekeepers will entrench their monopolies and control innovation in adjacent markets for decades to come,” Spotify head of global affairs Horacio Gutierrez will say in his testimony.

Rant and rave

Technology executives immediately reacted to Derek Chauvin's conviction for the murder of George Floyd. Facebook CEO Mark Zuckerberg:

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The European Union unveiled proposed rules to regulate artificial intelligence. 

The rules aim to limit “high risk” uses of AI such as facial recognition or software that processes job applications, which European regulators warn pose the greatest risks to society, Politico's Melissa Heikkilä reports. The proposal signals that Europe continues to play a key role in setting global standards for regulating the tech industry. 

The proposal would ban practices that “manipulate persons through subliminal techniques beyond their consciousness” or exploit children or people with disabilities. The proposal would also ban real-time biometric recognition systems, except in special circumstances, like finding victims in a kidnapping or responding to terror attacks. 

"There is no room for mass surveillance in our society," said Commission Executive Vice President Margrethe Vestager.

The proposal threatens to widen the regulatory divide between the United States and Europe, contributing to a broader global splintering of the Internet. 

Facebook played down the release of more than 500 million user records in an internal email.

The message, which was mistakenly sent to Belgium-based Data News, was confirmed as authentic by Facebook, the BBC reports. It said the social media giant expects similar incidents, where users “scrape” data from their platform, and plans to frame the issue as an industry problem.

Facebook said that “we understand people's concerns, which is why we continue to strengthen our systems to make scraping from Facebook without our permission more difficult and go after the people behind it.” A representative later said that LinkedIn and Clubhouse also faced scraping incidents.

Federal regulators warned that they may crack down on bias in the algorithms behind AI.

Federal Trade Commission attorney Elisa Jillson warned companies to be on alert for overpromising or having discriminatory algorithms. The result of an algorithm using biased data “may be deception, discrimination and an FTC law enforcement action,” she wrote.

Major companies using artificial intelligence, such as Google, also are facing reckonings over diversity and the technology’s impact.

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Lea Kissner, who previously worked as director of engineering at Apple, has joined Twitter as its head of privacy engineering.

Daybook

  • The Senate Commerce Committee holds a nomination hearing for tech critic Lina Khan, Biden’s pick to join the Federal Trade Commission, and Bill Nelson, a former senator who represented Florida and who Biden chose to lead NASA, today at 10 a.m.
  • A House Energy and Commerce Committee panel holds a hearing on securing U.S. wireless network technology today at 10:30 a.m.
  • A Senate Judiciary Committee panel holds a hearing on app stores today at 2:30 p.m. 
  • Federal Trade Commissioner Christine Wilson discusses digital markets at a NetChoice event on April 27 at 1 p.m.

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