Having the latest and greatest Apple iPhone or iPad isn’t enough, you need to be able to enjoy your music the way you want. With Spotify, you can listen to your favorites albums, playlists, and artist while you’re on the go, and even download new ones. But if you’re looking for an iOS application that will allow you to do the same thing, you’re going to have to make a special effort.
‘Apple abuses its dominant position to insulate itself from competition’
Earlier this week, lawmakers in the US scrutinized the anticompetitive nature of Apple’s App Store. They are interested in how tech companies take advantage of their dominant position to insulate themselves from competition. Specifically, they want to impose a new rule that makes it harder for platforms to change default settings, as well as banning mobile operating systems from making it difficult to uninstall software.
The hearing – called “Antitrust Applied: Examining Competition in App Stores” – analyzed how Apple and Google are influencing the way developers and consumers access apps. The hearing also examined how big technology companies use their position in the market to benefit themselves, and how they use that power to favor their own products over others.
The hearing is part of an effort to expand congressional scrutiny of digital markets, which includes Google and Apple. It also comes on the heels of a lawsuit filed against Apple by Epic Games, a game publisher that has been suing Apple over its rules on the distribution of its games. The rumored suit claims that Apple’s App Store rules infringe on the European Union’s Treaty on the Functioning of the European Union.
There were a number of notable participants in the event, including representatives from both Google and Apple. The two companies touted the importance of high standards in software development. They also claimed that commissions they pay to third-party developers have dropped dramatically over the years. In addition, both companies reiterated the importance of innovation.
However, the most notable thing about the hearing was the lack of competition in the Google Play Store. The “App Store” has a staggering 1.82 million apps. This means that Apple is doing a lot more than its competitors, especially when it comes to determining which apps are available for consumers to download.
The competition between Apple and Google has been a hot topic of conversation, and the hearing on Wednesday was meant to provide some momentum for legislation that could potentially weaken Apple’s stranglehold on the App Store. But the hearing did little to dispel the suspicions that both companies are using their power over smartphone ecosystems to gain an unfair advantage.
‘Apple’s decision to tie payments to its proprietary payment system is an “arbitrary choice”
Whether or not Apple has a monopoly on smartphones or tablets has been a subject of debate in the European Union for years. The EU claims that Apple has a monopoly on iPhones and iPads and claims that its aforementioned products are the reason for that monopoly. In the grand scheme of things, it’s easy to see why the powers that be in Cupertino would want to protect its bottom line. While the aforementioned mobile device may be a boon to Apple, competition is inevitable. It’s one thing to create a mobile music service, but another to rival the Spotify-like juggernaut.
On a more prosaic note, Apple’s decision to tie payments to its proprietary payment system is an arbitrary choice. In addition, the company does not permit its competitors to offer alternative payment solutions. While the company may claim to be agnostic about the apps that run on its devices, the real world is a different story. For instance, Google, Amazon, and Facebook can offer apps through their respective app stores, but Apple’s walled garden prevents a plethora of agnostic content from entering the Apple ecosystem. Despite the plethora of options, Apple users choose to stick with Apple. While this isn’t the sexiest of choices, it is the most logical. This is particularly evident in the app store, where Android, Windows and Linux are the only other notable players in the ring.
While the company is best known for its hardware, it also makes software and services for developers. Its latest offerings include the iOS 11, macOS High Sierra, and watchOS 3. Its upcoming OS X 10.13.1 update is expected to deliver a significant performance boost, especially in the App Store where Apple has lost ground to iOS rivals such as Android and Windows.
‘Apple’s restrictions on developers are nothing more than an abusive power grab’
‘Apple’s restrictions on developers are nothing but an abusive power grab,’ says Epic Games CEO Bill Sweeney. After Apple removed the popular video game “Fortnite” from the App Store, the company launched an all-out public relations campaign against the iPhone maker.
During the trial, Epic argued that Apple’s policies restrict developers’ ability to compete, and therefore, violate the law. It claimed Apple was abusing its monopoly power in the mobile games industry.
Epic Games and other developers have complained about the 30% cut that Apple takes from their revenue. The amount is considered a “tax” by some witnesses at the Senate hearing. After the first year, the cut falls to 15%. However, it’s unclear if it’s worth the effort to challenge it.
One of the major concerns is privacy shielding. That’s how the company protects its own business, rather than letting third-party apps track users’ location. Andeer, Apple’s chief compliance officer, said that it’s necessary for developers to follow the rules.
But some argue that stronger privacy protections aren’t in the best interest of every business. After all, it assumes a high level of sophistication on the part of the user.
While the trial will likely help build a larger case against the tech giants, it’s not yet clear how the ruling will affect the future of the App Store. After all, if Apple is allowed to change its policies on third-party payment methods, developers would be free to steer customers to other payment options.
The ruling also slashed away at Apple’s grip on the $100 billion mobile games market. That’s because it forced Apple to change its policies for all of the millions of apps in the App Store.
The company is facing an antitrust investigation from the U.S. Department of Justice and state attorneys general. It’s also been the target of formal complaints from companies including Spotify and Match Group, which are looking to get an injunction against Apple.
Some lawmakers are looking to enact new laws to regulate the tech industry. The Open App Markets Act would limit large app store operators’ use of nonpublic business information. It’s also possible that state attorneys general could take action against platforms if they believe they are abusing their monopoly power.
‘Apple is a ruthless bully’
Despite the fact that Horacio Gutierrez has become Spotify’s new Chief Legal Officer, he’s not a big fan of Apple. The CEO has been a vocal critic of Apple’s App Store policies, calling them “ruthless” and an “incremental bully”. As a result, he’s written a scathing op-ed in the Wall Street Journal, and testified against Apple at Senate Judiciary Antitrust Committee hearings. He’s also been criticized for critiquing Apple while using Apple products.
Earlier this year, the European Commission announced that it would launch formal investigations into the company’s antitrust practices. In response to a complaint Spotify filed two years ago, the EU issued a Statement of Objections (SO).
The SO is an important formal step in antitrust investigations. In addition to the SO, the Commission released a report assessing the app-store policies. The report raised concerns that Apple’s policies are infringing upon the rights of developers and consumers. In the report, the commission said that Apple forces app developers to use its payment system, requiring them to pay a 30% fee on in-app purchases.
As a result, Spotify has had to cut off in-app purchases to avoid paying the tax. In addition to this, the company has also been critical of Apple’s 30% cut of in-app purchases, as well as its “anti-steering” provisions. According to the company’s chief legal officer, Apple’s dominance in the music streaming market is unprecedented, and it’s using its power to stifle competition in areas where there is no competition.
This may seem like a minor issue, but it’s a huge one. After all, all three companies rely on subscriptions. If they don’t offer subscriptions, then they won’t be able to compete with each other. This could mean a major loss for CAF. If the company can’t defend itself, then it can’t be sure that it won’t be the victim of antitrust claims.
As Spotify’s CFO, Horacio has made a lot of noise about the App Store, and he’s not alone in his criticisms. Epic Games, a competitor to Spotify, launched a website called Time to Play Fair that raised several issues that are still largely unknown to most people.