Apple and Google Grilled at Senate Hearing on App Store Competition


A panel of senators grilled representatives from Apple and Google at an anti-trust hearing Wednesday, with the companies pushing back against accusations of abusing market power to squash competition and of charging unjustified developer fees in their app stores.

The Senate Judiciary Subcommittee on Antitrust and Consumer Rights heard complaints from Spotify, Match, and other app store developers, who accused Apple and Google of anti-competitive practices, including selectively hitting certain companies with high developer fees and of strong-arming developers to do their bidding.

“Apple abuses its dominant position as a gatekeeper of the App Store to insulate itself from competition and disadvantage rival services like Spotify,” Horacio Gutierrez, head of global affairs and chief legal officer of Spotify Technology SPOT, said at the hearing. “Apple’s anti-competitive conduct hurts consumers, with higher prices, less innovation, and less choice,” he added.

Gutierrez said App Store fees forced Spotify to raise monthly prices to $12.99 from $9.99, shortly before Apple launched a competing music service for $9.99 a month.

“Our market moves at Internet speed, and legislative action is urgently needed to give anti-trust enforcement agencies the tools they need to prevent gatekeeper platforms like Apple from abusing the power of their platform,” Gutierrez said.

Unless decisive legislation and enforcement action is taken, other platforms will “inevitably follow Apple’s example,” leading to further concentration of power “in the hands of a handful of digital sovereigns,” he charged.

A representative for dating services giant Match Group, which owns the Tinder app, complained in his testimony that Google and Apple both exact an onerous 30 percent of any digital transaction, leading to higher prices for consumers.

Jared Sine, chief legal officer at Match Group, said that 30 percent commission fees to the App Store cost the online-dating service $500 million annually, the company’s single biggest expense.

In November, Apple cut its fee to 15 percent on apps that bring in $1 million or less, with Google following suit in March with a similar reduction.

Source : Theepochtimes