Google and Apple scare us, say the application makers of the Congress

Tim Cook, Apple’s CEO, speaks at the 2019 Dreamforce conference in San Francisco on November 19, 2019.

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Some mobile app makers based on mobile distribution from Apple and Google are scared of how much power the tech giants have over their businesses, according to the congressional testimony released Wednesday.

“We’re all scared,” Jared Sine, Match Group’s legal director, Sen. Amy Klobuchar, D-Minn., Chairman of the Senate Judiciary Subcommittee on Antitrust, said at a hearing Wednesday.

The meeting brought together representatives from Apple and Google and some of their most sincere critics, including Match Group, which owns the Tinder dating site; Tile, which creates devices that help users find lost items and faces new competition from Apple AirTag technology; and the Spotify music streaming service.

The hearing takes place as lawmakers on both sides of the aisle work on updates to antitrust laws that could better explain the power that a few tech giants have in many digital markets. This includes the ability of platforms such as Apple and Google to manage the main distribution platform for applications, while increasingly competing with their own competitors.

Throughout the meeting, the application manufacturers expressed their fear about the ease with which any of the companies could reduce their business by making small changes to the rules of the application store. They also complained about high fees for in-app purchases and the unclear application of standards.

Allegations of threats

Several executives have accused Apple and Google of threatening their businesses.

He said Google called Match Group on Tuesday night after his testimony went public to ask why his testimony differed from the company’s comments in the latest earnings call.

In the winning call, Match executives said they thought they were having productive conversations about paying 30% of the Google app through their Google Play store. But, in testimony, Match complained that Google made “false claims of open platform” and complained about “its monopoly power”.

Wilson White, senior director of public policy and government relations, Wilson White, said it sounded like employees working on Google’s business development team asked a “sincere question.” Wilson said he did not see it as a threat “and we will never threaten our partners” because Google needs app developers to use its app store to be successful.

Senator Richard Blumenthal, D-Conn., Said the appeal was “potentially actionable.”

Senator Richard Blumenthal, D-CT, speaks during a hearing of the Senate Judiciary Committee on the January 6 riot in the Hart Senate Office building on Capitol Hill in Washington, DC, March 2, 2021.

Graeme Jennings | Swimming pool through Reuters

Klobuchar said he intends to look into the matter further.

Spotify legal director Horacio Gutierrez said he could think of “at least four clear examples of threats and retaliation” from Apple, after Spotify decided to talk about alleged anti-competitive behavior and Apple’s fees for developers of purchased digital products. through its platform. This included threats to remove the Spotify app, refusing to promote it, or waiting months for minor updates to the app to be approved, he said.

“They basically threw the book at us to make it hard for us to continue to support our decision to speak,” he said.

Rival taxes and products

Many application makers have complained about the fees charged by service administrators for purchases in digital service applications.

Gutierrez complained about what he called Apple’s “gag order” about how it can communicate with its own users on how to upgrade to its paid version.

For example, Spotify allows customers to upgrade only outside of its iOS app, to avoid Apple’s 15% to 30% commission for digital services purchased through its platform. But because Spotify doesn’t sell paid service through its iOS app, Apple doesn’t let the app maker talk about customer upgrades through the app either – users have to upgrade through a web browser on a PC, or another method.

At the same time, Apple operates a competing service, Apple Music, which has no such restrictions. Gutierrez claimed that this gives the Apple version an unfair advantage.

Representatives of Apple and Google told both lawmakers that their developer fees are meant to cover the costs of distributing applications across their platforms and securing them properly. Kyle Andeer, Apple’s compliance director, compared the services offered on the App Store today to the cumbersome and expensive processes that app makers had to go through to distribute their apps before the App Store existed.

White described the group as a set of “small but vocal” voices of “primarily large companies.” He said he was concerned that by trying to satisfy their complaints, “we are even damaging the foundation that has allowed the open source Android ecosystem to work so well for a much larger set of small and medium-sized businesses.”

In addition to the tax complaints, the developers were concerned that Apple’s rival products had stimulated it to make unfavorable decisions against them.

For example, Tile general counsel Kirsten Daru said the company had asked Apple for permission to use ultra-wideband (UWB) technology on the iPhone to make its article tracking technology more accurate than only Bluetooth can use. She said Apple turned down the request, then reserved the technology for its own competitive AirTags, which it announced Tuesday.

While Apple is launching a way for third-party developers to rely on more accurate location data, Daru said that in order to access this, “we need to give Apple unprecedented control over our business and direct customers to the Find me find lost objects app. “

Andeer argued that AirTags is a separate product from Tile, which currently has the majority of its market share for space, and that opening up tools to more third-party developers will encourage competition.

Unclear standards

App makers have also complained that Apple’s application of its app store rules may seem arbitrary and may delay the release of key features. Apple may tell developers what rule it violated, but not exactly how or what to do to fix it, Sine said.

He said Tinder tried to send a version of its app with a feature designed to protect its LGBTQ + users, notifying them when they were in a country where they could be at risk of sexual exposure or gender identity. He said it took two months and a conversation between the top executives of the owner of Match Group, IAC and Apple, to solve the problem.

An exchange between subcommittee leader Mike Lee, R-Utah and Andeer revealed how complex the Apple App Store rules can be.

U.S. Sen. Mike Lee, R-Utah, speaks during Senate Senate Committee hearing on FBI investigation into links between Donald Trump’s associates and Russian officials during the 2016 presidential election on Capitol Hill in Washington, USA, 10 November 2020.

Susan Walsh | Reuters

Lee asked Andeer to differentiate between the reasons why a service paid through Tinder might incur a commission, while one for Uber could not. Andeer explained that an Uber customer pays for a non-digital service – a car to show up at home – while not expecting the same return from Tinder, saying it would be a different service, in what appeared to be an insinuation of sex work.

Application manufacturers have emphasized their dependence on application stores due to their unprecedented access to consumers. But, they argued, not the symbiotic relationship that Apple and Google like to paint.

“We are not successful because of what Apple has done, we have been successful despite Apple’s interference,” Gutierrez said. “And we would have been much more successful than for their anti-competitive behavior.”

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