The US Senate Antitrust Committee has just held a hearing on April 21. Here, app makers openly expressed concern over the overwhelming power of Apple and Google, the two companies that own the App Store and Play Store markets. Before Senator Amy Klobuchar – Chairman of the subcommittee, Jared Sine – Legal Director of Match Group – said “we are all scared”.
The hearing was attended by representatives of Apple, Google and leaders of firms such as Match Group (which owns the dating app Tinder), Tile (a device maker to help find lost objects), music streaming service Spotify.
Google CEO Sundar Pichai (left) and Apple CEO Tim Cook
The two US parties are amending antitrust laws to better handle the power of technology giants in many digital markets. Through the hearing, app developers shared the business affected by a slight change in market rules. They also complain about the high fees for in-app purchases and the unclear standard practice.
Some executives accused Apple and Google of threatening their business. Sine said Google called Match Group on the evening of April 20 after his testimony was made public to ask why he spoke differently from the latest business results. Earlier, Match Group said that there was an effective discussion about the 30% fee for in-app payments on Google Play. However, when testifying, Match Group said Google “fake is open platform” and complained about “monopoly”.
In response, Wilson White – Google’s Senior Vice President of Government Relations and Public Policy – responded as if an employee of the company’s business development department called to ask the “honest question”. White does not see it as a threat and claims never to intimidate partners because Google needs to have app developers for the market to succeed.
Senator Klobuchar said she would look into the matter more deeply.
Spotify Legal Director Horacio Gutierrez thought of “at least four clear examples of threats and retaliation” from Apple after Spotify decided to speak out about its anti-competitive behavior and fees with developers. One of the threats was to remove Spotify from the App Store, refuse to promote, or wait a few months to approve the small change.
“Basically, they warned to make sure it was difficult for us to keep the decision to speak up,” he said.
Competitive fees and products
Apple operates Apple Music in competition with Spotify.
Many developers complain about the fees that Apple and Google charge for in-app purchases. Mr. Gutierrez criticized Apple for “silencing” Spotify when communicating with users about how to upgrade to the premium version.
Spotify, for example, allows customers to upgrade outside the App Store to avoid giving them 15 to 30% commission on digital services when shopping through the platform. But since Spotify doesn’t sell paid services through the iOS app, Apple won’t let them mention the upgrade to in-app customers. Instead, users have to upgrade via web browser on PC or another method.
At the same time, Apple operates its competing service with Spotify, Apple Music. Apple Music is not so restricted. This is what Gutierrez calls an “unfair advantage”.
Representatives from Apple and Google both believe that the fee is to cover the cost of distributing apps across platforms and security. Apple Compliance Director Kyle Andeer compares the convenience of today’s App Store to the difficulty and expense that developers had to overcome to deliver apps before the App Store came along.
In addition to fee complaints, developers are also concerned that Apple’s own services encourage them to make adverse decisions. Tile’s lawyer Kirsten Daru, for example, said he had asked Apple for permission to use the iPhone’s ultra-wideband technology to increase the accuracy of the object tracking technology instead of just using Bluetooth. But Apple refused and kept the technology for AirTag, the product that was just released.
While the “missing apple” offers another solution for outside developers to build more precise location data, Daru said that in order for them to access, they had to give Apple unprecedented control over the business. business and instruct customers to use Find My to find lost items. Andeer argues that AirTag is a different product from Tile, which holds the majority of the market.
Standards are not clear
Developers argue that Apple enforces the app market regulations seem arbitrary and delay some important features. Apple may only say that the developer has violated the rules, but it does not specify what to do to correct it.
Tinder has tried to submit a version of the app with LGBTQ + user protection by notifying them when it comes to a potentially dangerous country when it comes to gender. It took two months for the directors of Match Group and Apple to resolve the problem.
The conversation between Subcommittee member Mike Lee, R-Utah and Andeer reveals just how complicated the App Store regulations are. Lee asked Andeer to clarify the difference when the Tinder-paid service may incur commissions while Uber does not. Andeer explains that Uber customers are paying for a non-digital service – it’s a car to pick them up – and Tinder isn’t.
The developers emphasize their reliance on markets for unprecedented reach to customers. But it’s not a symbiotic relationship like Apple and Google want to draw.
“We are not successful because of what Apple did. We succeeded despite Apple’s intervention. We will be more successful without their anti-competitive behavior ”, confirmed Gutierrez.