Prior to the hearing hopes were running that lawmakers would drill deep into the CEOs of the wolds biggest tech companies to get some truth about concerns of market dominance and antitrust behavior. While lawmakers successfully did grill Amazon CEO Jeff Bezos, Google CEO Sundar Pichai, and Facebook’s CEO Mark Zuckerberg, Apple CEO Tim Cook was left out.
Going into the hearing Apple’s base argument is that the App Store remains a fair place for developers, and has transformed software distribution forever. While mainly true, concerns over how Apple’s own dominance in the store can thwart competition have taken a front-seat in the community.
Lawmakers haven’t been shy about their disapproval with the store. In June a lawmaker called Apple’s 30% commission policy for in-app purchases “highway robbery,” at the same time, the EU formally started an investigation into the App Store based on complaints from Spotify.
Mr. Cook started the hearing with a strikingly similar tone to others, that Apple is proudly American and serves its customers because they love its products. The CEO goes on stating that they’ve never raised the 15% to 30% commission policy, or added additional fees for developers to pay.
However, emails that were released by the committee during the hearing shows that Apple Executive Eddy Cue floated the idea of rasing the commission to 40%, saying that leaving it at 30% would “be leaving money on the table.”
The sentiment Cue brought forward is that Apple should take advantage of 3rd party app developer’s success, a narrative Mr. Cook pushed heavily against in his testimony. When pressed by lawmakers Mr. Cook denied the idea that Apple exhibits dominance in the App Store by attempting to take down the potential competition to its native apps or features.
In particular, Mr. Cook was reminded of Apple’s decision to remove apps that would allow parents to control their children’s devices right before the launch of iOS 12 which introduced “Screen Time.” Screen Time is Apple’s built-in feature to limit digital addiction, offering parental features such as App Limits, Communion Limits, and Content and Privacy Restrictions.
Mr. Cook says that those apps were removed due to their use of MDM or Mobile Device Management. Whether true or not, the timing of the removal right before the launch of iOS 12 raised eyebrows. Mr. Cook denied the allegations that it was purposefully.
When lawmakers brought forward App Store policy and guidelines, it was clear they were misinformed. Lawmakers repeatedly pushed the idea that Apple can reject any app they want. While in theory true, they missed the fact that Apple puts apps through a review process. That review process including the rules and polices developers must follow Mr. Cook say are to protect user privacy.
Mr. Cook went on to make the remarkable claim that Apple’s stock apps in the App Store, which there are 60, follow the same rules that developers do. However, that is beyond false. As noted by a report by Bloomberg in 2019, Apple’s own apps have far greater freedom to the system, and the inability for users to set default apps are a direct antitrust concern. Per the older report:
“Apple could and ultimately should allow third-party apps to have the same power as first-party ones,” said David Barnard, creator of Launch Center Pro, which competes against and works with Apple’s Shortcuts app. “I get there are security implications, but they’re not even allowing simple things that don’t impact security.”
Still, Apple has not allowed third-party apps to become system defaults partly to thwart the encroachment of rival software, according to one executive who used to work at the company. In an interview this year, former App Store review head Phillip Shoemaker said the “number one fear” in the early days of the iPhone and the App Store was that major third-parties like Google or Facebook Inc. would create a suite of mobile apps that would replace those built by Apple. “There is now a conflict as Apple goes into these spaces that are ripe with competition,” he said. Apple says competition is alive and well on the App Store.Bloomberg
With iOS 14 Apple will allow users to set default email and web browsing apps, but still lacks for setting a default music, or maps app. Those aren’t accidents, Apple is limiting those abilities given they own services in both. Apple Music the company’s own music streaming service is baked into the system far greater than Spotify or Amazon Music. Apple Maps, the company’s mapping services also offer far greater system integration than Google Maps or Waze.
Apple limited the default option for music and maps is a direct move to boost its own services and apps while forcing developers to live within the constrained boxed-in world the ecosystem provides. When lawmakers attempted to bring these concerns forward to Mr. Cook, he reminded them that Apple’s App Store has grown exponentially in the past years.
He attributed that sucess to the fairness and privacy that the App Store provides. While true, that “fairness” and “privacy” come at a cost for developers. The privacy driven from the App Store guidelines has become a core issue with some calling it to stringent. Lawmakers missed the chance to grill Mr. Cook further on how its App Store rules have nearly no oversight, leaving perhaps the biggest concern unaddressed.
In the first round of questionings, Apple CEO Tim Cook was pressed on whether all developers are treated in the same way. Mr. Cook says that regardless of size, all developers are treated the same and have access to the same tools and services. This narrative is the same one pushed out by Apple’s SVP of Worldwide Marketing Phill Schiller this week in an exclusive interview with Reuters.
An example brought up by a lawmaker is Amazon Prime, which Apple does not take a commission for purchases from. Mr. Cook says all developers have access to that exemption if they meet the requirements. However, once again lawmakers missed the opportunity to ask Mr. Cook where the oversight is, if it exists.
All in all, lawmakers failed to address some of the biggest concerns pertaining to the front-end user experience. Mr. Cook was clearly ready as evident from his opening speech to have been grilled more than he was. He was expecting to be directly hammered on the specifics of App Store rejections, or Apple’s tight restrictions within its software. All of which went unmentioned.
In all fairness, it’s hard to cover all the concerns while other CEOs of companies who find themselves in much deeper trouble than Apple does are present. But in almost every way, lawmakers left many questions unanswered, and the questions they did ask were merely clarifications rather than the hard-hitting truth. While the other CEOs, most notably Amazon’s Jeff Bezos left the hearing with grill marks, Tim Cook left like nothing ever happened.