App makers take shots at Apple in Senate hearing
App developers say the company uses its app store to further its own business interests
Legal executives from Spotify, Tile, and Match all spoke out against the mobile giant at a hearing held by the Senate Committee on the Judiciary's Subcommittee on Competition Policy, Antitrust, and Consumer Rights.
The hearing, entitled Antitrust Applied: Examining Competition in App Stores, explored potential antitrust issues in platform ownership. During the event, the executives recounted problematic business relationships with the company and accused it of using the app store to further its own business interests.
This week, Apple launched a direct competitor to Tile's tracking devices with its new AirTag, a device that links directly to its FindMy feature. Kirsten Daru, general counsel at Tile, said that Apple is willing to become hostile with former business partners to further its own business.
"Tile and Apple originally had a mutually beneficial, symbiotic relationship," she said, adding that things "took a very sharp turn in a different direction" in 2019, just as Tile began to hear rumors that Apple was working on a competitive product. It removed Tile from its physical stores without explanation and "started sending Tile customers confusing prompts encouraging our customers to effectively turn off Tile".
"If left unchecked, Apple will become a 3, 5, 10 trillion-dollar company, while countless other viable competitors will be unfairly marginalized and harmed," she warned.
Horacio Gutierrez, head of global affairs and chief legal officer at Spotify, reported that Apple had threatened to ban the streaming music service from the app store unless it used the in-app purchases feature and paid the 30% fee Apple typically charges for the service. This forced Spotify to increase its pricing. Apple then introduced its own, lower-priced Apple Music service and added a rule that companies couldn't direct users to their own external sign-up pages, he complained.
"Spotify is prohibited even from informing its customers about the opportunity to sign up for Premium on Spotify’s own website," Gutierrez warned, accusing the company of "bait and switch" tactics by changing the rules.
Jared Sine, chief legal officer for Match Group, which owns Tinder, had equally harsh words for Apple and Google, which also participated in the hearing. "At the heart of this strategy to control both developers and consumers is the requirement that app developers use Apple’s and Google’s often inferior in-app payment services — think of a credit card processor — for which Apple and Google charge a 30 percent tax," he said.
"Senators, this is not curation," he warned. "It is iron-fisted, monopoly control.
Apple sent executives to the hearing after initially declining to testify. Chief compliance officer Kyle Andeer defended the company's 30% fee for application purchases and in-app payments.
"Today, the commission for most developers who are required to pay one is just 15 percent," he said. "Last year, as many small businesses were struggling during the pandemic, and storefronts were closing around the country, we launched a Small Business Program, which cut the commission for developers making less than $1 million per year in the App Store."
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