On April 21, Apple and Google faced charges from prominent app developerswho alleged that the two tech giants abused their dominance, thereby harming competition. The U.S. Senate committee – chaired by Democratic Senator Amy Klobuchar – examined charges from three companies – Tile, Spotify and Match Group – that raised issues of unfair competition against the two giants. In a lengthy U.S. Senate hearing, app makers said that Apple and Google’s rules on in-app payments and app updates allow the tech giants to shut down their competing services, and that they retaliate when app developers refuse to comply.
The sometimes tense showdown underscored the growing antitrust scrutiny of Apple, after more than a year of similar focus on peers like Amazon, Facebook and Google. Lawmakers were clear that the hearing would serve as a springboard for scrutiny of the big tech platforms.
Much of the hearing focused on Apple's treatment of app developers, largely due to Apple's closed ecosystem that prohibits the installation of iOS apps from anywhere other than its App Store.
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In the Tile case , the company directly accused Apple of copying its own tracking product, Air Tags . Spotify said Apple prevented the company from telling customers that they could find cheaper prices outside of its own App Store app. Match Group , meanwhile, said in its lawsuit that it currently pays about $500 million a year in fees to Apple and Google to be on the App Store and Play Store, respectively. That money is the dating service's only significant cost. Match Group 's general counsel said the day before the hearing that Google had told Match Group it was unhappy with the content of the filing that was due the next day.
Klobuchar is an advocate of limiting the power of the five US tech giants. She believes that a balanced agreement to control the power of these companies can be reached with Republican senators. Referring to the Match Group case, Klobuchar called on the Senate to investigate the case from the perspective of extortion.
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On the other hand, Apple and Google defended their practices against the accusations, pointing out that they do not violate US antitrust laws. Specifically, they stated that regarding the theft by Tile, the technology used by the latter is common property in the industry and that they cannot claim theft, at a time when similar products are also being released by smaller companies.
Accordingly, regarding applications and fees, they stated that in reality the stores are losing excessive revenue from companies that do not pay their subscriptions on time, while enjoying the respective services. Furthermore, there was a common position from the two tech giants that the subscriptions mainly exist to cover security gaps between the applications and the platforms of the respective devices.
Apple's CCO (Chief Compliance Officer), Kyle Andeer, testified that AirTags are a "very different product" and that the company is excited to compete in this market.
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What is the position of the US Senate?
The US Senate does not currently have a solid position, although the agreement that Klobuchar has predicted is apparent. In the April 21 proceedings, several Senators from both sides argued that the two technology giants are systematically violating US monopoly laws. In fact, Democratic Senator Richard Blumenthal of Connecticut made a sharp comment, saying that if these events were presented in any law school, in a commercial law class, everyone would consider them to be a violation of the relevant laws.
Furthermore, the investigation into Big Tech will not stop at these 3 categories. Next month, Epic Games – creator of the “Fortnite” videogame – will be examining a complaint against Apple, alleging that it forces consumers of the game Fortnite to make purchases through its App Store application.
The results of the Senate committee are not only a harbinger of what will happen with antitrust laws in the US. The Senate's stance on the economic power of Apple and Google will affect billions of store users around the world.
