The big story
For all of the antitrust attention that’s been paid to Facebook in recent years, what’s become clearer over the past week is that there’s already a good deal of anti-competitive sentiment surrounding Apple and its monopoly on gatekeeping software that can live on the iPhone.
The big news this week was that the EU had launched formal antitrust probes against Apple regarding the iOS App Store and Apple Pay.
Per our report:
The Commission confirmed today that it’s looking formally into whether Apple’s rules for app developers on the distribution of apps via the App Store violate EU competition rules. It said the probe focuses on Apple’s mandatory requirement that app developers use its own proprietary in-app purchase system, as well as restrictions applied on the ability of developers to inform iPhone and iPad users of alternative cheaper purchasing possibilities outside of apps.
Arriving alongside this news, the very same day, the very vocal development team behind Basecamp announced that their new product, an email service called Hey which had launched earlier this week, had drawn Apple’s ire. The app review team at Apple indicated that the app may be removed from the store if Hey’s team refused to include in-app purchases to sign up for the $99 per month email service.
On the Mac users can download apps outside the Mac App Store, but the iOS App Store is the only path for a developer to get their experience onto an iPhone. For developers that charge for digital services inside their apps, Apple takes a 30% cut that later shrinks to a 15% one. This is a very substantial revenue slice and one developers have long aimed to avoid. But Apple rules make it quite difficult for them to pull this off, even if they avoid selling anything inside their app.
The blowback was instantaneous from Hey’s team, while other developers also took the opportunity to criticize how Apple took substantial cuts of widely-defined “digital services” We covered the broader developer response here.
TechCrunch also interviewed Apple exec Phil Schiller this week, and while he advice to the team at Hey a path forward to being accepted on the store, rule changes were not part of the offer. “Sitting here today, there’s not any changes to the rules that we are considering,” Schiller said. “There are many things that they could do to make the app work within the rules that we have. We would love for them to do that.”
As Apple prepares for next week’s WWDC developer-centric event, expect the company to continue highlighting the value generated from the App Store for developers. But you can also expect regulators to continue scrutinizing the company’s maneuverings and continue listening for developer discontent surrounding anticompetitive practices.
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