Apple has come under fire this week for the exorbitant prices it demands to carry apps on its App Store. Now, some are accusing the tech giant of being a monopoly power in the mobile app game.
Congress is skeptical
This week, Congressman David Cicilline, a chair on the House antitrust sub-committee, spoke with The Verge
about Apple. He decried the company’s treatment of app developers. “Because of the market power that Apple has,” Cicilline said, “it is charging exorbitant rents — highway robbery, basically — bullying people to pay 30 percent or denying access to their market.”
The Rhode Island Democrat accused Apple of “crushing small developers” who are unable to pay Apple’s unfair prices. “If there were real competition in this marketplace, this wouldn’t happen.”
He noted his committee heard from countless app developers who were “terrified of economic retaliation” if they spoke out against Apple. He said the committee will investigate the tech giant for potential antitrust violations.
Game of Monopoly
Apple products are completely ubiquitous at this point, with the iPhone being the most popular smartphone in the world. And when users want to download an app to their phone, they have no option other than the App Store.
As a result of Apple’s closed market, app developers have no choice but to make their products available through the App Store. Apple has taken advantage of their gatekeeper status. It charges developers far more than necessary, since app-makers have no other option.
For small apps, the expense is too great. The steep price of App Store entrance can prevent them from growing or entering the market in the first place. Any practice that diminishes the number of players allowed in a market is by definition anti-competitive. And suppressing competition is a clear violation of antitrust law.
Calls For Action
In a Politico
interview, Microsoft’s Chief Legal Officer Brad Smith also condemned Apple’s treatment of developers. Smith says it is about time to hold Apple to account for its exploitative practices.
“I do believe the time has come,” Smith said, “whether we are talking about Washington DC or Brussels, for a much more focused conversation about the nature of app stores, the rules that are being put in place, the prices and tools that are being extracted, and whether there is really a justification in antitrust law for everything that has been created.”
Mind you, Microsoft is not merely trying to needle its chief competitor. 20 years ago, Microsoft faced its own accusations of violating antitrust laws. The government forced Microsoft to open its Windows operating system to third-party developers. Ever since, the company has been careful not to infringe antitrust regulations and wants Apple to be held to the same standard.
But authorities in the United States are not the only ones demanding accountability from Apple. Even as the House of Representatives looks into the company, the European Union announced its own antitrust investigation against the tech colossus. Music streamer Spotify has also launched an antitrust suit against Apple.
Meanwhile, Apple has defended its practices. “We want to maintain a level playing field where anyone with determination and a great idea can succeed,” a spokesman told The Verge