For years, tech companies like Facebook and Amazon have faced heavy antitrust criticism from Congress, and Apple has received far fewer questions. But that changed Wednesday when Congress sank its teeth into Apple as part of a hearing called “Antitrust Applied: Examining Competition in App Stores.”
The meeting brought together representatives of companies such as Spotify, Tile and Match Group, a dating application company, to explain how Apple App Store fees and the wall garden business strategy affect companies. All three companies have testified harshly, accusing the iPhone maker of anti-competitive behavior regarding the burdensome charges it charges App Store developers.
The timing could not be worse for Apple, coming just a day after the company announced an article tracker related to the iPhone, called AirTag, in direct competition with Tile. Speaking in Congress, Tile’s attorney general, Kirsten Daru, said that once Apple decided to develop its own article tracking devices and services in 2019, the friendship between the two companies dissolved.
“If Apple started us, it can start anyone,” Daru told lawmakers. “And Apple has shown that it won’t change unless someone makes them, making the legislation so critical.”
The changing relationships of the Apple platform were a topic at the meeting, with each company witnessing how quickly Cupertino’s collaborative communication could become competitive. The legal director of the match, Jared Sine, told lawmakers that taxes for app stores amount to the company’s largest expense, totaling about a fifth of the company’s total sales. Spotify’s head of global affairs and legal director Horacio Gutierrez said Apple’s business model equates to “a classic bait,” bringing developers into its app store and abruptly changing terms for the benefit of the iPhone maker.
“We all appreciate the app stores and the roles that Apple and Google have played in helping to create many of the technologies that have defined our era,” said Senator Amy Klobuchar, chair of the subcommittee, on Wednesday. “We are not upset about the success … It’s about new products coming. It’s about new competitors emerging. This situation does not seem to be happening to me. ”
WHAT DOES IT MEAN
Senator Klobuchar, who chairs the committee, is using these hearings to support the Competition and Antitrust Act, which she introduced in February. The provisions of the bill do not fit perfectly with the App Store issue, but there are some key provisions that would make it easier for companies like Tile to push back against Apple. In particular, the bill would make it less difficult for law enforcement to bring cases against technology companies for engaging in “exclusive” conduct, which Senator Klobuchar wanted to highlight in interviews.
“I don’t think people realize that there’s a 15 to 30 percent fee for major companies that like to get music, like Spotify, which Apple or Google appreciate, that all this exclusionary behavior is happening,” he said. said Klobuchar Axios Wednesday.
For the most part, the testimonial companies seemed happy to agree. Throughout the meeting, all three representatives argued that the legislation is necessary for companies such as Apple to change their behavior. But Spotify and Tile argued that the committee should also consider proposing federal legislation specifically targeting app stores.
“We respectfully request that app stores be considered right now,” Daru Tile said in light of discussions on Klobuchar’s larger bill.
In addition to federal law, states like Arizona have introduced their own measures to make changes favorable to developers in Google and Apple app stores. Many of these bills, such as Arizona, have failed as a result of intense technology lobbying efforts.
“They fight so hard because it’s essential to maintaining their monopoly,” Sine said.
prominence
Biden’s candidate to be the next Democrat in the Federal Trade Commission is also ready to turn up the heat on the App Store. At Lina Khan’s confirmation hearing on Wednesday, Klobuchar asked Khan about power companies like Apple and Google regarding app stores:
Inn: It is indeed the source of power. Basically, there are two main options, so as to give these companies the power to really set the term in this market in some cases. I think you are absolutely right that certain terms and conditions really lack any kind of beneficial justification. So I think in those cases we have to be particularly skeptical and look carefully.
WHAT’S NEXT?
Earlier this year, Klobuchar said the committee would hold a series of hearings targeting competition in the technology sector, including Facebook and Google’s dominance in the advertising market. Hearings have not yet been scheduled.