Monopolies in any industry have never been a simple issue for the investors. In the market, there are always big companies occupying an overwhelming market share. These companies can use their dominance over the market to create pressure, bully, or even intimidate smaller competitors. Therefore, Antitrust laws in the US and Europe were enacted to create a fair competition for the companies. However, recent events have shown that Appl is showing its Monopoly in the tech industry. Here is an overview of the antitrust lawsuits on Apple to help you have a better look at this issue.
AppStore Payment Policy
Apple and Google jointly require developers to pay 15-30% of app revenue if they want the app to appear on the App Store and Google Play. However, while Android users can still be able to download apps and games from any source. On the other hand, the App Store the only way for iOS users to get their apps. The Basecamp CEO – Jason Fried indicates that this payment policy means that Apple is forcing itself to be the unavoidable middleman between developers and customers. Some developers try to bypass this policy by proving their own payment method in their apps with better benefits.
Recently, The developer community has a ruckus again after Apple forced WordPress to add an in-app payment system. While WordPress is completely free, Apple forces them to sell seemingly premium plans for a 30% commission fee.
Apple Music and Spotify
The longest-running antitrust confrontation has been between Apple and Spotify since early 2019. Regarding the App Store fee, Spotify said it and Apple Music provide the same music streaming service on the AppStore. However, while they have to pay 30% of the revenue, Apple Music does not have to pay this amount. This can offer a cheaper subscription compared to Spotify.
If Spotify makes their subscription fees equal to Apple Music, the profit they earn will be very low because they have lost 30% of revenue to Apple. Conversely, if the price increases to achieve the desired profit, their services will become less competitive. Spotify claim in a complaint that Apple has given itself an unfair advantage.
Antitrust on Apple Pay
In September 2019, Apple faced other European monopoly complaints regarding Apple Pay. Apple allegedly restricted access to the NFC feature on the iPhone and Apple Watch, preventing banks and other financial service providers from providing NFC payments via their own apps.
Apple is accused of setting up conditions that require users to use Apple Pay instead of other mobile payment services. Meanwhile, the firm explains that restricting NFC access will provide tighter security for sensitive banking data.
In June 2019, the US Federal Trade Commission and the US Justice Department began investigating the 4 tech giants: Apple, Google, Amazon, and Facebook, to assess the broad concerns of consumers and investors. This included search engines, social media, and other online retail services. At that time, the investigation details were not specifically provided.
By September 2019. The US House of Representatives Committee also announced its participation in the investigation, examining competitive issues in digital markets and whether the dominant companies have anti-competitive behavior. The App Store was also on the investigation list. Meanwhile, after more than a year of reviewing the Spotify complaint, on June 16, the European Union’s Antitrust Agency announced an investigation of the monopolistic behaviors regarding the App Store and Apple Pay.
A $ 1.2 billion fine in France
In March, France’s Autorité de la Concurrence fined Apple $ 1.2 billion for anti-competitive behavior in its distribution network and abuse of their agents’ economic dependence. Specifically, Apple created illegal agreements with wholesalers Tech Data and Ingram Micro. Their agreements have some implicit terms to ensure the two companies do not compete with each other. This behavior of Apple makes the retail market of Apple products paralyzed. As the dealers cannot adjust the price on their own, the retail price of the product on the market is identical and identical to Apple’s listing.
Apple’s CEO Have a Congress Hearing
On July 29, along with CEOs Google, Amazon, and Facebook, Tim Cook, CEO of Apple participated in an online hearing with the US House of Representatives.
Cook continues to hold that Apple has no advantage in terms of market share in any market in which Apple does business. He also claims that Apple treats all developers equally with open and fair rules. The Apple CEO dismisses the notion that Apple policies are overly strict on the AppStore. In addition, he indicates that the company faced fierce competition from both the developers and its customers
Before that, Apple also claims that they strictly control the App Store to ensure the apps are secure enough. They treat all the apps developer fairly. In fact, many of the rivals, like Microsoft’s email app, are still very popular on the App Store.
Apple vs Epic Games
To bypass the AppStore’s payment, Epic Games allows users to purchase items in Fornite through its own payment gateway instead This action starts the battle between Epic Games and Apple. As a result, Fortnite is currently removed from the AppStore.Epic representatives said they decided to sue Apple to prevent unfair policies and create an environment of fair competition in the distribution of mobile applications in the future.
Last week, Apple went a step further by threatening to withdraw licenses for Epic’s iOS and Mac development tools, including the Unreal Engine, from August 28. If this happens, apps that use Epic’s tools won’t be certified to run on iOS and Mac. The Unreal Engine is currently not only used to create Epic’s apps. It is also widely used by other game developers. The fact that the engine is not licensed could cause developers to leave Epic, isolating the company in the market. Earlier this week, Epic continued to submit petitions to the court to prevent this risk from happening
The conflict between Apple and Epic is the latest in the battle between Apple and app developers in Apple antitrust lawsuits. Over the past two years, Apple has consistently made it difficult for many developers. Therefore, they have been under antitrust investigation in both the US and Europe.
There you go, now you have an overview of Apple’s antitrust issues. What are your opinions on Apple’s monopoly in the Tech industry? Let us know in the comments!