App makers exploded Apple and Google in the Senate hearing on app store policies

The occasional tense confrontation highlighted how Apple’s antitrust control is intensifying after more than a year of similar focus on its colleagues, such as Amazon, Facebook and Google. And the parliamentarians were clear that the meeting will serve as a support ramp for the legislation to master the big technological platforms.

Much of the audience focused on Apple’s treatment of app makers, largely because of Apple’s closed ecosystem, which prohibits the installation of iOS apps from anywhere other than the Apple app store.

This week, Apple introduced a new product known as AirTag, a small device that can be used to locate missing items. Tile, which is a competing product, accused Apple of giving AirTag an unfair advantage in the home field, not allowing Tile devices to use the same advanced, ultra-wideband frequencies to communicate with the iPhones AirTag uses.

Kyle Andeer, Apple’s director of compliance, said that AirTag is a “very different product” and that the company is excited to compete in that market.

Apple’s criticism intensified only from there. Other witnesses criticized Apple’s practice of charging digital goods and services providers a 30% commission for in-app transactions. Apple has argued that its fees are aimed at ensuring that the iOS ecosystem is safe and reliable for users.

Jared Sine, legal director of Match Group – which owns Tinder – said that app store fees are now the company’s largest expense, exceeding $ 500 million a year. (If a user purchases a premium subscription through the iOS Tinder app, for example, 30% goes to Apple.)

“That means $ 500 million, which could go into the pockets of regular consumers or could be hired to hire employees or invest in new innovations,” Sine said.

Companies trying to find alternatives to Apple’s in-app payment system – such as by urging users to pay directly on an app’s website – are quickly on the wrong side of Apple, said Horacio Gutierrez, legal director of Apple. Spotify.

“We couldn’t even email our users to tell them about an upgrade method” that didn’t involve payment through Apple, Gutierrez said, calling Apple’s contractual restrictions a “gag order.”

Application developers crossing technology giants fear revenge, application makers said. He himself confessed that, on the eve of the hearing, Google contacted Match Group asking for an explanation of his future testimony.

Senator Richard Blumenthal called Apple and Google’s conduct “obviously indefensible,” and on hearing Sine’s testimony, told Sen. Amy Klobuchar, chairman of the subcommittee, that he thought Google’s call was a case of intimidation that should be investigated by the Senate.

“This is the plan,” Klobuchar replied.

Wilson White, senior director of public policy at Google, confessed that he does not agree with the characterization of the call by Sine.

“I don’t respect respect as a threat and we would never threaten our partners,” he said.

Apple later responded to Spotify’s claims of unfair retaliation – such as allegations that Spotify was denied promotional placement in the app store because of its criticism of Apple – citing Spotify’s huge commercial success.

“We have supported these businesses,” Andeer said. “There is no evidence of retaliation.”

Andeer also defended Apple’s 30% commission structure, saying the company chose to charge for digital goods and services from the start and that most app developers pay nothing at all.

“We now have a market in which we have 1.7 million applications,” he said. “Eighty-four percent of them pay nothing.”

But Group Sen. Mike Lee challenged Apple to explain why some services, such as Uber, are excluded from the commission’s requirement, while online dating apps like Tinder were still subject to it.

Apple has struggled to convince Lee of the distinction, arguing that Uber does not offer a digital good or service because it involves consumers calling a driver for physical transportation. Instead, with online meetings or e-book purchases, Andeer said that “the whole experience is contained in the four corners of the device.”

This still didn’t make sense to Lee or Sine, who claimed that app store operators like Apple and Google “essentially took the internet and moved it to app stores.”

“They have set up their gateways, set up toll booths; you have to pay the toll if you are a digital good and service,” Sine said. “It gives everyone else access to the highway, and what we’re saying is, why isn’t the highway the same for everyone?”