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Apple App Store Antitrust - Apple To Testify

April 12th, 2021

Apple App Store Antitrust - Apple To Testify
David Quinn

by David Quinn

VP of Strategy & Partnerships at Gummicube, Inc.

Apple has announced their chief compliance officer, Kyle Andeer, will be testifying in front of the Senate Judiciary Committee over Apple’s antitrust allegations.

This is a turnaround from Apple's previous public statement that no witnesses would testify on their behalf. With Andeer’s confirmation as a speaker, the public can expect a thorough hearing, covering the multiple aspects for which Apple is under investigation.

Senate Requests Face Time

The announcement comes in light of the recent letter from Senator Amy Klobuchar and Senator Mike Lee, directing their attention to Apple CEO Tim Cook on April 9:

More than half of internet traffic comes through mobile phones, whose users rely on mobile applications to access online content and services—and the vast majority of mobile apps are downloaded from either Apple’s ‌App Store‌ or Google’s Play Store. Apple’s power over the cost, distribution, and availability of mobile applications on the Apple devices used by millions of consumers raises serious competition issues that are of interest to the Subcommittee, consumers, and app developers. A full and fair examination of these issues before the Subcommittee requires Apple’s participation...Earlier this year, Apple provided witnesses to testify before the North Dakota Senate and the Arizona House of Representatives to oppose state bills that would regulate the very same conduct that the Subcommittee intends to explore.

Epic Games, amongst other developers like Netflix and Spotify, claims that Apple is hurting developers by taking a large cut (30%) of every in-app purchase.

Apple has been dodging most questions in regards to its legal battles against Epic Games until recently. Cook spoke on the possibilities of allowing developers to incorporate their own payment methods within their apps to the Toronto Star:

At the heart of the Epic complaint is they’d like developers to each put in their own payment information. But that would make the App Store a flea market and you know the confidence level you have at the flea market.

Antitrust Allegations Continue

The “App Store Tax” is not the only issue Cook has been met with over the last few years as the debate continued. On top of charging developers 30% of all in-app purchases, Apple is currently battling a number of issues under the antitrust umbrella, including:

  1. Unfairly dominating the App Store by introducing its own set of native apps, or apps automatically installed on all Apple devices
  2. Allegedly favoring its own app within relevant search results
  3. Fostering unfair relationships with carriers and retailers internationally

In a seemingly fleeting attempt to build ground with angry developers, Apple launched its Small Business Program, cutting the 30% commission down to 15% for eligible developers.

There is more to come from the hearing, with additional pressure coming from the European Commission and thousands of other developers in the App Store today.

Developers can still remain hopeful; With Apple’s release of the Small Business Program so quickly after the Epic Games debates, Apple could have more to come to continuing helping developers big and small. However, should the investigation continue further, Apple could see more punishments thrown its way, either legally or through community action.

The hearing itself may be difficult for both parties, as Andeer’s history as an antitrust counsel is robust.

Andeer's Advantage

Andeer formally joined the Apple team in 2010 as a director before being appointed to chief compliance officer in 2018. Anders has a background in antitrust laws, having worked at the Department of Justice and Federal Trade Commission in a similar capacity. It has also been reported that while at Latham & Watkins, he also counseled Apple over similar practices.

The landscape of the App Store continues to shift, with iOS 14.5’s upcoming release, the antirust disputes and whatever announcements Apple has in store for us with the April 20 event. Only time will tell how the App Store will shift following the hearing.

Only time will tell us how the iOS 14.5 update will impact tracking and mobile advertising as a whole. It’s been a long seven months since the original announcement and Apple has kept everyone on their toes.

Want to learn more about App Store Optimization? Contact Gummicube and we’ll help get your strategy started.

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