Lawyers representing Apple and Google found themselves in hot water Wednesday during a Senate Judiciary Committee hearing on corporate app stores and their ability to stifle competition.
Representatives of Spotify, Tile, and Match Group, which owns dating apps including OKCupid and Tinder, argued that the Silicon Valley giants are unfairly wielding their power as app store overseers and deliberately limiting competition, damaging ultimately to consumers.
At the heart of the problem are the payments through the apps that Apple, Google and others extract from developers in exchange for listing an app in their app stores, giving them a 15% discount to 30%. % of every transaction made there.
In 2020, payments totaled $ 33 billion combined for Apple and Google, according to data tracked by app analytics firm Sensor Tower.
Match Group chief legal officer Jared Sine told senators fees are his company’s biggest expense and will soon eclipse half a billion dollars a year.
These concerns were echoed by Spotify’s legal advisor Horacio Gutierrez, who said these costs would inevitably make them to consumers, thereby making Apple’s offerings more attractive.
“Apple Music is one of our main competitors,” noted Gutierrez. “Its advantage is not better service; instead, it’s Apple’s full control over the App Store, which allows them to impose rules that disadvantage Spotify and benefit Apple’s own service. “
In previous hearings, Apple officials have argued that as a private company that invented both the iPhone and the app ecosystem, it should be free to profit from it as it sees fit. .
Gutierrez argued that the opposite was true: third-party apps turned the iPhone into a monster, not the other way around.
“So Apple has it exactly the other way around when it claims that companies like Spotify are free-riding Apple’s innovations,” he says. “It’s Apple’s success that relies in large part on the creativity of third-party application developers who have created demand for Apple devices. Proof of this is Apple’s slogan: “There’s an app for that.” “
Apple also maintains that the charge is justified with respect to the payment of maintenance of the App Store. Chief Compliance Officer Kyle Andeer noted that the company spends “hundreds of millions” each year on store retention and reviewing each application “for privacy, safety, security and performance.”
This argument did not fly with Sen. Jon Ossoff (D-Ga.), Who noted that it was “trivially easy” to find predatory scam apps on the platforms of Google and Apple who , given the bogus legitimacy of thousands of bogus reviews, trap users in costly bill cycles that can be difficult to unsubscribe from.
Fraudulent apps are likely making millions on the App Store, according to a survey by The Verge. And when a bad actor makes the money, so does Apple.
As for the claim that monitoring the app ecosystem protects users, Sine argued that the opposite is true, recalling Match’s efforts to prevent underage users from its apps. Sine said Match has had its apps revoked on several occasions when attempting to verify a user’s age by requesting their ID.
“Senators, this is not curation as we have been told. It’s an iron monopoly control, ”he said. “When an industry player has the power to dictate how applications work, how much they will be forced to pay and, in many cases, if they will even survive, it is a monopoly. It is the same behavior of the robber barons before them.
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