US Senate quizzes Apple and Google on app practices

App store revenues 2019
(Image credit: Future)

Apple and Google have denied suggestions from US senators that they abuse a dominant position on their respective mobile platforms to stifle competition from other developers and manufacturers.

The accusations against the companies are two-fold. The first is that the practices employed by their app stores are restrictive, while the second is that their role as platform holders means they have an unfair advantage when it comes to the provision of services.

Both the Apple App Store and Google Play require developers to adhere to a series of conditions in order to be listed. This includes an obligation to pay around 30% commission on the sales of apps and add-ons such as in-game currency or subscriptions.

Apple App Store investigation

Although Google allows other app stores to sell software on Android, the first-party Play Store is the most popular as it comes pre-installed, while the App Store is the only marketplace on iOS. This approval system means Apple ultimately has the final say over which applications can be used on iPhone and iPad.

Several companies, such as Spotify and Match Group (which owns Tinder), have complained that the demand for commission on sales of digital goods is anti-competitive and increases prices for consumers. Match told senators that its annual commission costs of $500 million were its largest single expense, while it was also frustrated at Apple’s review process.

Apple and Google says this high degree of control and the commission charged were necessary to pay for the security measures to protect users from harmful apps and activities. However, Reuters reports that Apple did not commit to spending all the mandatory fees on security and senators were not satisfied with explanations around why vendors of physical goods were not obligated to pay commission.

A secondary concern is that the two companies can use their positions as platform holders to stifle rival services. Tile, a manufacturer of smart tags, is concerned that Apple’s new AirTags will have an unfair advantage because Apple’s ‘Find My’ app is so integral to the iOS platform and cannot be deleted.

The Cupertino-based company has denied this, stating the overall aim of the ‘Find My’ service was to help users and notes that the app has been opened up to third party developers.

Apple is currently in the middle of a high-profile legal battle with Fortnite-developer Epic Games, whose applications were removed from the App Store after it created an in-app purchase system designed to circumvent Apple’s commission requirements. A court hearing on the matter is due to start next week.

Meanwhile, Apple faces probes from the UK’s Competitions and Markets Authority (CMA) and the European Commission over its App Store practices.

Via Reuters

Steve McCaskill is TechRadar Pro's resident mobile industry expert, covering all aspects of the UK and global news, from operators to service providers and everything in between. He is a former editor of Silicon UK and journalist with over a decade's experience in the technology industry, writing about technology, in particular, telecoms, mobile and sports tech, sports, video games and media.