The latest antitrust hearing looking into concerns about Apple and Google’s market power is underway. Along with the companies getting a grilling from the Congressional subcommittee on antitrust, representatives from Spotify, Tile, and more are testifying about how they see the two tech giants as stifling competition.
The Apple and Google hearing today entitled Antitrust Applied: Examining Competition in App Stores is another instance of monopoly concerns growing about the tech titans.
In opening remarks, Apple’s Chief Compliance Officer Kyle Andeer said that that its App Store not only provides a best in class experience for customers but has offered countless opportunities for developers. As we’ve heard from CEO Tim Cook before, Andeer also said the App Store provides a trusted and safe place to discover and download apps and that it revolutionized app distribution.
Meanwhile, statements from committee chair Senator Klobuchar and ranking minority member Mike Lee included concerns about Apple acting as an unfair gatekeeper, copying competitors products, and more.
Tile’s General Counsel Kirsten Daru – as we expected from Tile’s CEO previous statement – shared that it doesn’t feel it can trust Apple to play fair and brought up the just-announced AirTags. Specifically, Tile sees Apple’s new item tracker as a copycat product that is able to be more seamlessly used with iPhone. Daru also brought up that Apple may know detailed information about Tile since it has sold its products in Apple Stores and distributed the Tile app through the App Store.
While Apple opened up its Find My app to third parties earlier this month, Tile said it’s similar to a “hostage” program with very strict terms and conditions. The main point Daru is referencing is that if a third party builds Find My support into a product, customers can’t use the third-party app to control it. Notably, that is different than how the Home app and HomeKit third-party products work.
In an awkward dialogue, Sen. Lee asked Daru to share more about how the Find My agreement is restrictive, and she replied she couldn’t since Tile signed an NDA with Apple. Lee then asked Apple’s Andeer in the moment if Daru had permission to share to which he said no. Lee responded by asking if she could share information that wasn’t proprietary to Apple and again Andeer said it wouldn’t be possible to figure that out in the moment.
Going further, Tile says it’s unfair for Apple to not open all the iPhone hardware, including the U1 UWB chip fully to third parties, making it impossible to compete with features like a seamless one-touch setup and the same precision finding experience.
As we’ve heard before from Spotify, the company’s Head Of Global Affairs & Chief Legal Officer Horacio Gutierrez called out Apple for forcing the streaming service to use the in-app purchase option and paying a 30% commission.
Along with that, Spotify says it’s unfair that it can’t share with customers in the iOS app that they can purchase their subscription at discount from Spotify’s website – and that Apple believes it owns Spotify’s relationship with customers. That argument is against the backdrop of Apple being a direct competitor to Spotify with Apple Music and naturally not having to pay any commissions.
App Store commissions, scams, security, more
Members of the Congressional subcommittee on antitrust grilled Apple’s Kyle Andeer on a number of different questions from the 15% deal it offered Amazon years ago, the growing problem of App Store scams, how it uses security as the reason for keeping App Store control, and more.
Andeer offered similar statements that we’ve heard from Apple like that it’s invested hundreds of billions of dollars into the App Store, that it doesn’t offer special deals to big companies, security is a top priority but it is an endless cat a mouse game, and more.
He also said that his understanding is customers caught in App Store scams should be able to get their money refunded and that Apple shouldn’t be profiting from that.
Mark Cooper, Ph.D., the Director of Research as the Consumer Federation of America also gave testimony during the hearing and that sided with Spotify, Tile, and the Congressional members that Apple and Google have a monopoly on the app store marketplace that is harming competition.
Notably, there appears to be growing bipartisan support for new tech regulation. While we’re not going to see legislation passed in the immediate future, pressure is building and Senator Klobuchar has previously revealed the Competition and Antitrust Law Enforcement Reform Act of 2021 that could be voted on this year. It includes more funding for the DOJ and FTC to handle probes like this and also includes hefty fines – up to 15% of a company’s total revenue – for breaking antitrust rules.
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