Apple’s app store levies antitrust charge in EU
This week, Apple showed more power by introducing a software update that gave customers more power to block app tracking of data, a change that sparked a quarrel with facebook, who criticized the move as anti-competitive because it would undermine the ability to sell advertising online.
Companies are increasingly pushing regulators and courts to intervene. At a congressional hearing in Washington last week, companies such as Spotify, Tile, and Match Group told senators how policies set by Apple and Google, of which the Play Store is another pinch point for app developers, hurt competition and pushed up app prices for customers. And next week, a trial is expected to start in California between Apple and Epic Games, the maker of Fortnite who has filed an antitrust lawsuit against Apple on his fees.
Britain leads another antitrust investigation Apple on the App Store after receiving complaints from developers.
The case announced on Friday is part of a larger effort by the The European Union will repress on so-called “gatekeeper” companies like Apple, Amazon, Facebook and Google. Policymakers are drafting laws that would prevent tech giants from abusing their market power to harm small businesses, including the way they run app stores.
Efforts to force changes to the App Store pose a threat to a rapidly growing part of Apple’s business. As sales of iPhones, iPads and other hardware devices mature, the company relies on digital services as a new source of growth. Investor optimism about this activity helped drive Apple’s stock soar, giving it a market value of over $ 2.2 trillion, the largest in the world.
Pressure on Apple over the App Store has already led the company to make changes. Last fall the company halved its commission on many app sales at 15% for developers who earn less than $ 1 million per year on their iPhone apps. This change affected about 98% of developers who paid the commission, but it still hasn’t affected Apple’s bottom line; those developers made up less than 5% of the revenue Apple collected from apps, according to estimates from Sensor Tower, an app data company.
Apple earns a lot more by reducing the sales of the most popular apps. Match Group, which makes the dating app Tinder, recently said it pays Apple nearly $ 500 million a year in commission payments, its biggest expense.