Facebook joins Microsoft in criticizing Apple for app store business practices

This segment originally aired on August 7, 2020.
Apple (AAPL) is facing off against its fellow tech giants Facebook (FB) and Microsoft (MSFT) about the iPhone maker’s App Store policies in a showdown that comes just as a week after Apple CEO Tim Cook and Facebook CEO Mark Zuckerberg, among other CEOs, appeared before a House Judiciary hearing about Big Tech’s market power.

The dustup has to do with Apple’s responses to Facebook’s new Facebook Gaming app and Microsoft’s xCloud cloud gaming app. Both companies submitted their apps for review and had them rejected by Apple for violating the App Store’s terms of service.

Now Facebook and Microsoft, smelling blood in the water, are hitting back, calling out Apple with statements that echo the kinds of complaints antitrust investigators have heard from other developers who say Apple is hurting competition and consumers. And that could be a problem for Apple in the long run.

“The audience for [last week’s hearings] was not just a domestic audience, it was an international audience, it included competitors, third parties, and competition authorities,” explained former Federal Trade Commission Chairman William Kovacic.

“So [Apple knows] that every time they twitch now, they will have close scrutiny from many different eyes including quite a few astute observers,” added Kovacic, who now serves as a law professor at George Washington University, where he specializes in global competition.

Shots across the bows
Apple’s current antitrust problems stem directly from its App Store policies and how it enforces them. App developers, Spotify (SPOT) being one of the most prominent, have complained to investigators and regulators about Apple’s app review guidelines, saying they aren’t applied evenly.

Developers have also taken issue with the 30% commission Apple collects on app sales through the App store, saying it’s unfair because Apple sells competing apps, like its Apple Music service, and doesn’t have to pay a commission to itself. Apple also operates its own gaming service called Apple Arcade, which is available as a subscription and lets users play games across their iPhones, iPads, and Mac computers.

Investigators are looking at whether Apple’s tight control over the App Store, which is the only means developers have to get their apps on the company’s iOS devices, stifles innovation and unfairly targets competing apps.

Cook denied such accusations during a recent hearing before the House Judiciary Committee’s Subcommittee on Antitrust, Commercial, and Administrative Law, pointing to the fact that the App Store has helped generate 1.9 million jobs and is host to 1.7 million apps, of which Apple only competes with a few dozen.

Facebook and Microsoft are well aware of the accusations Apple is facing, and appeared to purposely use language supporting the argument that Apple is operating an illegal monopoly in their surprisingly public responses to Apple’s decision.
#Facebook #Microsoft #Apple

Subscribe to Yahoo Finance: https://yhoo.it/2fGu5Bb

About Yahoo Finance:
At Yahoo Finance, you get free stock quotes, up-to-date news, portfolio management resources, international market data, social interaction and mortgage rates that help you manage your financial life.

Connect with Yahoo Finance:
Get the latest news: https://yhoo.it/2fGu5Bb
Find Yahoo Finance on Facebook: http://bit.ly/2A9u5Zq
Follow Yahoo Finance on Twitter: http://bit.ly/2LMgloP
Follow Yahoo Finance on Instagram: http://bit.ly/2LOpNYz