From The Verge’s “Congress is diving into the App Store fight” posted Wednesday:
The [Senate antitrust] hearing brought in representatives from companies like Spotify, Tile, and Match Group, a dating app company, to explain how Apple’s App Store fees and walled-garden business strategy harms their companies. All three companies gave harsh testimony, accusing the iPhone-maker of anti-competitive behavior over the burdensome fees it charges some app developers on its App Store.
The timing couldn’t be worse for Apple, coming just a day after the company announced an iPhone-linked item tracker called the AirTag in direct competition with Tile. Speaking to Congress, Tile’s General Counsel Kirsten Daru said that once Apple decided to develop its own item-tracking devices and services in 2019, the two companies’ friendly relationship dissolved.
“If Apple turned on us, it can turn on anyone,” Daru told lawmakers. “And Apple has demonstrated that it won’t change unless someone makes them, making legislation so critical.”
Apple’s shifting platform relationships were a theme in the hearing, with each company testifying to how quickly Cupertino’s collaborative outreach could turn competitive. Match’s Chief Legal Officer Jared Sine told lawmakers that app store fees amount to the company’s single largest expense, totaling around a fifth of the company’s total sales. Spotify’s Head of Global Affairs and Chief Legal Officer Horacio Gutierrez said that Apple’s business model equated to “a classic bait and switch,” luring developers into its app store and suddenly changing the terms to benefit the iPhone-maker.
“We all appreciate app stores and the roles that Apple and Google have played in helping to create many of the technologies that have defined our age,” Sen. Amy Klobuchar, chair of the subcommittee, said on Wednesday. “We’re not angry about success… It’s about new products coming on. It’s about new competitors emerging. This situation, to me, doesn’t seem like that’s happening.”
My take: It will come as no surprise to regular readers that I believe the App Store is an antitrust problem for Apple — not for charging rent, but for playing hardball with competitors in a park where it sets the rules and calls the balls and strikes. The full 3:15-hour hearing is available here. It starts at the 30-minute mark.