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U.S. senators question Apple and Google on app store dominance

PoliticsApr 21, 2021 08:10PM ET
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2/2 © Reuters. Apple unveils AirTag in Cupertino 2/2

By Diane Bartz, Stephen Nellis and Paresh Dave

WASHINGTON (Reuters) -A panel of U.S. senators questioned officials from Apple Inc (NASDAQ:AAPL) and Alphabet (NASDAQ:GOOGL) Inc's Google on Wednesday about the dominance of their mobile app stores and whether the companies abuse their power at the expense of smaller competitors.

Amy Klobuchar, the top Senate Democrat on antitrust issues, said Apple and Google can use their power to "exclude or suppress apps that compete with their own products" and "charge excessive fees that affect competition."

App makers like music streaming service Spotify Technology SA (NYSE:SPOT) and dating services giant Match Group (NASDAQ:MTCH), which owns the Tinder app, have long complained that mandatory revenue sharing for sales of digital goods and strict inclusion rules set by Apple's App Store for iPhones and iPads, along with Google's Play store for Android devices, amount to anticompetitive behavior.

Representatives for Apple and Google told senators the companies' tight control over their stores and the associated revenue-sharing requirements are needed to enforce and pay for security measures to protect consumers from harmful apps and practices.

But when asked by Senator Josh Hawley, Apple's Chief Compliance Officer Kyle Andeer would not commit to spending all of the mandatory fees on security.

Explanations from Andeer and Google's Wilson White, senior director for government affairs, about why the companies' fees do not apply to Uber Technologies (NYSE:UBER) Inc and apps that sell physical goods also failed to satisfy senators.

"I feel like unfrozen caveman lawyer," Senator Mike Lee said. "I'm not grasping it."

Senator Richard Blumenthal expressed concern about a call Match said it received late on Tuesday from its business counterpart at Google.

Match's Chief Legal Officer Jared Sine said Google wanted to know why Sine's planned testimony, which had just been released, deviated from previous comments the dating company had made.

"It looks like a threat, it talks like a threat, it's a threat," Blumenthal said of the call, vowing to investigate Google's action further.

Google's White said the call reflected an effort to ask an honest question and the company would never threaten partners.

In his testimony, Match's Sine argued that Google and Apple both exact an onerous 30% of any digital transaction, raising prices for consumers.

Match pays nearly $500 million in fees to the app stores annually, the company's single largest expense, Sine said.

Spotify and Match said Apple's app review process was opaque. Sine said Apple blocked a safety update to the Tinder app meant to warn LGBTQ+ users if they were traveling to a country where it might be dangerous to expose their identity because Apple said the update violated the "spirit" of a new rule.

But Apple would not explain how to fix the issue, Sine said. He said that Apple approved the update two months later only after senior leaders at Match's parent company at the time, IAC/Interactivecorp, raised the issue with Apple's senior leaders.

The hearing came a day after Apple said it would begin selling AirTags - which can be attached to items like car keys to help users find them when they are lost - in direct competition with Tile, which has sold a similar tracking device for more than a decade.

Apple said its AirTags were an outgrowth of its "FindMy" app, which is used for locating lost Apple devices and to share user locations and was introduced in 2010, before Tile's founding. Apple last month opened its operating system up to alternative item trackers and said that Chipolo, a startup competing with Tile and AirTags, is using the system.

Tile General Counsel Kirsten Daru testified Apple's FindMy program is installed by default on Apple phones and cannot be deleted.

"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 said.

U.S. senators question Apple and Google on app store dominance
 

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Comments (8)
Todd Gray
Todd Gray Apr 22, 2021 12:06AM ET
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remember how Madoff had the detailed whistle to the SECZ blown on him by that analyst 5 times in about 5 years. the SEC did nothing, until Madoff walked in and confessed. the u.s. gov is the same as the SEC. no real value to ordinary people.
Roger Miller
Roger Miller Apr 21, 2021 11:20PM ET
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Quit providing generous intellectual property protections to start with and maybe it wouldn’t be so easy for them to maintain their dominance.
Silence Dogood
Silence Dogood Apr 21, 2021 8:58PM ET
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It's a problem unless they are ruining conservative apps.. then it's all good with the hypocrite dems.
Adrian White
Adrian White Apr 21, 2021 8:58PM ET
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What exactly is a "conservative app"? Do you honestly think that Apple and Google rate apps politically and then decide to "ruin" the "conservative apps"? Right wing playing the victim again.
Silence Dogood
Silence Dogood Apr 21, 2021 8:58PM ET
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Adrian White  You’ve never heard of a conservative app called Parler? Seriously? Facebook and Twitter deplatform and demonetize conservative contributors CONSTANTLY. You should feel shame for trying to argue against the constant assault against conservatives by big tech. You know better than that.
Steve Lora
Steve Lora Apr 21, 2021 8:38PM ET
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Apple needs to be broken up
Daniel Hodel
Daniel Hodel Apr 21, 2021 8:38PM ET
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What happened to the “free market capitalism” that republicans stand by? Now you want to regulate companies, because you can’t create a company to compete?
AA AA
AA AA Apr 21, 2021 8:37PM ET
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This is like going to the gov and complained Walmart charges a markup
ben sc
ben sc Apr 21, 2021 4:37PM ET
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Its amazing their antitrust issues have not been reigned in, one bit.
Me comment
Me comment Apr 21, 2021 2:25PM ET
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Great add tracker to everyone so the gov't know exactly where you are 24/7/365.
Randy Randy
randy00 Apr 21, 2021 12:30PM ET
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Does it work? Cause Tile doesn't.
 
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