Apple enjoys “monopoly power” over App Store and distribution of apps on iOS, says US House investigation

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One year and 4 months after it began its investigation, today the US House Judiciary subcommittee on Antrisut released a 450 long page report outlining its finding.

According to the committee’s investigation, Apple “exerts monopoly power in the mobile app store market,” and is recommending major steps to break its power-up. As CNBC reports:

In a nearly 450-page report, the Democratic majority staff laid out their takeaways from hearings, interviews and the 1.3 million documents they scoured throughout the investigation. They conclude that the four Big Tech companies enjoy monopoly power and suggest Congress take up changes to antitrust laws that could result in parts of their businesses being separated.

Concluding their investigation, the House subcommittee is recommending a number of changes for all major dominant firms, including Apple, Amazon, Facebook, and Google. Amongst the recommendations, the committee is advising against a firm’s ability to use its dominant platform to harm competitors and hamper 3rd parties.

• Nondiscrimination requirements, prohibiting dominant platforms from engaging in selfpreferencing, and requiring them to offer equal terms for equal products and services;

Third, dominant platforms have used their integration to tie products and services in ways that
can lock in users and insulate the platform from competition. Google, for example, required that smartphone manufacturers seeking to use Android also pre-install and give default status to certain Google apps—enabling Google to maintain its search monopoly and crowd out opportunities for thirdparty developers.

And fourth, these firms can use supra-competitive profits from the markets they dominate to subsidize their entry into other markets. Documents uncovered during the Subcommittee’s investigation indicate that the dominant platforms have relied on this strategy to capture markets, as startups and non-platform businesses tend to lack the resources and capacity to bleed billions of dollars over multiple years in order to drive out rivals. For dominant platforms, meanwhile, this strategy appears to be a race to capture ecosystems and control interlocking products that funnel data back to the platforms, further reinforcing their dominance.

In a scathing rebuttal to points that CEO Tim Cook made during his hearing in July, the US House report says that Apple exploits app developers and charges overly high prices within the App Store, hurting innovation at the same time.

Apple also uses its power to exploit app developers through misappropriation of competitively sensitive information and to charge app developers supra-competitive prices within the App Store.

In the absence of competition, Apple’s monopoly power over software distribution to
iOS devices has resulted in harms to competitors and competition, reducing quality and innovation among app developers, and increasing prices and reducing choices for consumers.

Apple in a statement to Bloomberg has responded to the findings in the report. As expected, Apple says it rejects the findings of the investigation and reiterates it has no dominance in any market.

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Sami
Sami started falling in love with Apple in 2010 with the iPhone 4S. As a registered developer, he deeply admires the world of Apple. Sami is an aspiring journalist, writer, and actor. He also has devoted his life to sharing his passion and knowledge with others around the world.