Congress grills Tim Cook over App Store rules affecting NFTs and crypto

Cryptocurrencies

Apple has a long list of rules and guidelines that affects how apps work in the App Store, including some that apply against controversial topics like NFT and blockchain technology. On July 28, a pair of lawmakers have asked Apple CEO Tim Cook to clarify some elements relating to the technologies and how they exist in the App Store.

The letter from Republican Gus Bilirakis and Democrat Jan Schakowsky of the Subcommittee on Innovation, Data, and Commerce starts off asking for information about Apple's policies for the App Store. Namely to determine "how these policies are impacting American leadership in emerging technologies including blockchains, nonfungible tokens (NFTs) and other distributed ledger technologies."

Referencing previous concern about reports that Apple failed to "implement rigorous application scrutiny" over the potential surveillance capabilities of TikTok, the letter also accuses Apple of using its market dominance to maximize profits via rules that "purposefully limit choice and stifle innovation."

As a specific example, the letter mentions how Apple has seemingly used App Store guidelines to "reduce the utility of apps in blockchains, NFTs, and other blockchain-related technology." This includes the December 2022 accusation from Coinbase that Apple forced it to remove NFT transfers from the Coinbase Wallet app for iOS.

At the time, Coinbase said that transactions involving NFTs were problematic as Apple considers crypto "gas" fees as something to be payable with an in-app purchase, and therefore requiring Apple to take its 30% cut from proceedings.

To comply with NFT rules, companies have to roll out "lite" versions of their apps for the U.S. market. A second example involves Axie Infinity, which worked with Apple for two years to release a limited version of an app that left out core NFT mechanics. That app is also not available the U.S.

"It is essential that Congress fully understand the App Store Guidelines and the extent these guidelines limit innovation and American technology leadership," the letter states. Apple's support of innovative new technologies such as blockchains, NFTs, and other distributed ledger technologies could solidify American leadership of these technologies."

In a list of 21 questions to Cook, the lawmakers ask about the status of "sideloading" in a future iOS update, Apple's App Store admittance policies, whether Apple proactively audits apps, and how Apple deals with violations.

Apple is also asked if it plans to build apps using blockchain or similar technologies, and if there has been any consideration about using the secure enclave for blockchain apps.

Other questions range from the App Store review process itself, appeals processes, if there are checks for foreign ownership, and the reasons for an "App Review Fast Track" for Chinese tech giant Baidu.

Cook has been given until August 14 to respond to the letter's questions.

This is far from the first time that Apple has had to deal with the U.S. government's lawmakers over crypocurrency apps. In July 2022, Cook faced more questions about fraudulent crypto apps.