Amber Neely
The Department of Justice and state attorneys general are reportedly preparing to launch an antitrust investigation into Apple's App Store after developers continue to raise concerns over anticompetitive behavior.
In Europe, Apple's App Store has long been the subject of debate for some time now, with government agencies launching antitrust probes into the company's behavior toward its competitors. Now it seems as though Apple may face the same scrutiny on its home turf.
The Department of Justice and a coalition of state attorneys general have spoken to several companies who believe Apple is engaging in anti-competitive behavior. Many companies take issue with Apple's 30% commission on App Store purchases — especially if the consumer is subscribing to a service. They say that it has lead to higher costs and fewer choices for customers.
"It's one thing to structure your services in a restrictive way or use exclusive contracts when you're small," Gene Kimmelman, who worked in the DOJ's Antitrust Division during the Obama administration, told Politico. "But the bigger you become, the more dominant you become in a market, the more likely those types of restrictions — unless they are absolutely essential to benefit consumers — will be viewed skeptically as harmful to competition."
"In-app purchase is broken," Phillip Shoemaker, a former Apple executive who helped design and run the App Store from 2009 to 2016, told Politico. "As Apple is entering into more and more of these areas and putting out of business more developers, they really have got to think differently."
Hey, an email app by Basecamp, has recently reignited the debate about Apple's App Store policies. The company allowed users to download the app, but it was considered non-functional out of the box. Basecamp had directed users to pay a $99 fee on the Hey website, which bypassed Apple's 30% commission on subscriptions. In response, Apple halted updates and threatened to remove the app from the App Store.
In response, Apple's SVP of Worldwide Marketing Phil Schiller stated that the company has no plans to change App Store policies, even after intense scrutiny. Basecamp later went on to add in a 14-day free trial in-app purchase, which brought it in line with the App Store's terms of service.
In October of 2019, the U.S. House of Representatives Judiciary Committee had asked Spotify to provide information on Apple's alleged anti-competitive behavior, and specifically how it pertains to Spotify's business. Spotify had alleged that Apple "gives themselves unfair advantages at every turn."
Apple has faced antitrust probes in the European Union for some time, now. Not only have they battled with Spotify overseas, but several banks have brought antitrust cases against Apple's Apple Pay system.
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14 Comments
This is ludicrous. The App Store has been unbelievably positive for consumers.
People ten years from now will still be waiting for Spotify to turn a profit
So many problems with the antitrust aspect...developers set their own prices, freemium dominates the pricing schemes, apps can be sold on other software platforms that have larger numbers of users, Apple doesn't have majority control of phone or computer hardware, retail/grocery chains take cuts as a standard practice and also compete with their own store brand products, App Store customers are more likely (not less likely) to spend $$ on apps than other platforms with less controls, etc.
Unbelievable. First time ever, as far as I can recall, that a company that is not a monopolist, or even a dominant firm, will be investigated for antitrust violations.
This is purely trying to push an advantage by Microsoft as they know Apple can’t/won’t pursue any counter claim while they transition their architecture. It annoys me that MacOS and iOS devices are crippled when ever they connect to an exchange/Microsoft service in my experience, yet it is Apple who are under investigation. M$ seems to be able to go from bad to worse without being challenged at all.
As I said in another article comment. The thing that you are getting different is more trust from the end users. Trust that the software has been vetted by a trusted third party to be secure, respect privacy, and consistent and fair in pricing to all users (I want to know I’m getting the same deal that other users are getting).
These fees have been enabling Apple to develop many of the hardware and software enhancements in iOS and new iOS devices. New iOS updates for features and security don’t come free, nor does the cost of inspecting, vetting, making downloads available with near 100% uptime and downloaded from a secure source that can’t be hijacked by a man-in-the-middle. These are the very reasons that I’m on this platform and not android and these are not free.
The developers are buying all this with the App Store fees. I do not have the same faith between apps downloaded from different app stores like Google Play, even by the same developer. They are not the same and if people are naive enough to think that the Google, Twitter and Facebook apps all have the same attention to privacy and security on both Rios and Android, they have more problems than these.
Apple needs to be telling both users and developers this Intrinsic value they are getting through their App Store purchases.