In June, Microsoft President and Chief Counsel Brad Smith suggested Apple was creating a monopoly by charging developers 30% of their revenue on the App Store. At the time, Smith stopped short of directly naming the company. This week, Smith complained to the United States House Judiciary Antitrust Subcommittee.
Smith went as far as to name Apple directly this time. The Subcommittee has been set up to investigate competition in the digital tech market. Major companies are represented and will speak before the committee, including Apple CEO Tim Cook.
It is worth noting the Subcommittee cannot enact any changes but will instead compile a report for Congress. It’s also worth pointing out that Microsoft was not part of the investigation. Instead, the Subcommittee wanted to “provide Microsoft’s perspective as a big tech company”.
In other words, it sought Microsoft’s opinion as a rival to the likes of Apple and Google, and as a company that has itself been slapped around by antitrust laws. Whether this is ideal is another debate as one could likely question Microsoft’s impartiality in such matters.
Either way, Brad Smith voiced his concerns about Apple’s 30% revenue taken from all dev’s on the App Store.
“They impose requirements that increasingly say there is only one way to get on to our platform and that is to go through the gate that we ourselves have created. In some cases they create a very high price per toll — in some cases 30% of your revenue has to go to the toll keeper. The time has come – whether we are talking about D.C. 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 the tolls that are being extracted and whether there is really a justification in antitrust law for everything that has been created.”
What Will Happen
As mentioned, the Subcommittee won’t be making any rulings. However, what happens in this meeting could have an impact moving forward. Also taking part are Amazon CEO Jeff Bezos, Facebook founder Mark Zuckerberg, and Google chief Sundar Pichai.
It will be interesting to see how Tim Cook responds to Microsoft’s claims. Certainly, there is no other way to get an app onto iPhones and iPads, so that arguably makes the App Store a monopoly. Apple may hope the Subcommittee will be more focused on antitrust and privacy serial offenders Google and Facebook.