Damaging Week For Apple, Google In Senate Hearings

Image credit: US Senate

App makers and others testify against the dominance of Apple and Google in US Senate antitrust hearing on Wednesday

It has been an uncomfortable few days for Apple and Google, after companies including Spotify, Tile and Match aired their grievances against them at a Senate antitrust hearing on Wednesday.

Apple and Google were accused of implementing high app store fees and copycat behaviour, the Guardian newspaper reported.

And Apple and Google were also accused of holding “data hostage” from small apps, stifling their ability to compete.

Senate hearing

The hearing on Wednesday took place before the Senate antitrust committee, was uncomfortable for the tech titans, after companies spoke about their experiences within Google and Apple’s respective app stores, and copycat behaviour.

Earlier this week for example Apple unveiled its AirTag tracking tabs, in a move that will not please Tile, which for the past ten years has offered its own Bluetooth trackers.

Amy Klobuchar, the Democratic senator and the chair of the antitrust subcommittee, was quoted by the Guardian as saying Apple and Google have used their power to “exclude or suppress apps that compete with their own products” and “charge excessive fees that affect competition”.

“The only way apps can get to consumers is through one of these two platforms, which are owned by just two companies,” she reportedly said. “The best thing to do here would be to admit that we have a huge monopoly problem across the board, and put in some stiffer rules and standards to address it.”

To be fair Apple last month opened up its operating system and the Apple ‘Find My’ app to third party products, and one of the first to sign up was Chipolo, which offers its own range of bluetooth trackers.

Apple AirTag

Apple chief compliance officer Kyle Andeer also testified that AirTag is a “very different product” and that the company is excited to compete in that market.

Andeer said AirTags were an outgrowth of Apple’s “FindMy” app, which is used for locating lost Apple devices and to share user locations and was introduced in 2010, before Tile’s founding.

However Tile’s general counsel, Kirsten Daru, testified before the Senate that Apple’s Find My app is installed by default on Apple phones and cannot be deleted.

Image credit: Tile

“Apple has once again exploited its market power and dominance to condition our customers’ access to data on effectively breaking our user experience and directing our users to FindMy,” she reportedly said.

App Store fees

Meanwhile representatives from other companies including Spotify and Match (the owner of Tinder), complained the requirement to share up to 30 percent of the in-app revenue and strict inclusion rules set by Apple and Google amount to anticompetitive behaviour.

Jared Sine, chief legal officer of Match Group said app store fees now account for the company’s single largest expense, topping $500 million a year, CNN reported.

If a user purchases a premium subscription through Tinder’s iOS app, for example, 30 percent goes to Apple.

“That’s $500 million that could be going back into the pockets of everyday consumers or deployed to hire employees or invested in new innovations,” Sine said.

Companies that try to find alternatives to Apple’s in-app payment system – such as by urging users to pay directly on an app’s website – quickly find themselves on Apple’s bad side, Horacio Gutierrez, Spotify’s chief legal officer, was quoted as saying.

“We couldn’t even email our users to tell them about a way to upgrade”” that didn’t involve paying through Apple, Gutierrez said, calling Apple’s contractual restrictions a type of “gag order.”

Two years ago, Spotify filed a formal antitrust complaint against Apple with the European Union.

App developers that cross the tech giants are fearful of retribution, the app makers were quoted as saying this week.

It should also be remembered that Apple is set to go to trial next month against Epic Games, in a court room showdown over the question of App Store fees.

Google intimidation?

Match Group’s Sine testified that on the eve of the hearing, Google had contacted Match Group asking for an explanation of its coming testimony.

Seneator Richard Blumenthal called Apple and Google’s conduct “patently indefensible,” and upon hearing Sine’s testimony, told subcommittee chair Sen. Amy Klobuchar he believes Google’s call was a case of intimidation that should be investigated by the Senate.

“That’s the plan,” Klobuchar responded.

Wilson White, a senior director of public policy at Google, testified that he disagreed with Sine’s characterisation of the call.

“I respectfully don’t view that as a threat, and we would never threaten our partners,” he was quoted by CNN as saying.