Apple is currently the subject of two various antitrust investigations by the European Commission. Now, it looks like the company’s antitrust woes are only going to get worse as the DOJ and multiple other state attorneys in the US plan on probing Apple for its control over the App Store.
As per sources, the DOJ and a coalition of state attorneys have spoken to a number of companies who are unhappy with Apple’s “ironclad control” over the App Store. Their main source of frustration is how the App Store rules are not followed consistently by Apple especially for its own services and products which in the end leads to higher prices and limited options for consumers.
The discussions have taken place as recently as last week, after European competition officials announced twin probes into Apple’s App Store and its payment platform, Apple Pay. And they indicate that Apple’s easy ride from U.S. authorities may be over, after a year in which the company has escaped state and federal antitrust scrutiny bearing down on Google, Facebook and Amazon.
Most of the developers complain that Apple is tying its own IAP system with access to the App Store. By forcing developers to use its own IAP system, Apple is able to charge developers a 30% commission on every transaction that takes place. This commission is frequently referred to as “Apple tax” by developers. However, the Cupertino company has made an exception for companies like Uber, Airbnb, and Grubhub, etc. which offer physical goods and services through the App Store.
Apple’s App Store rules came under massive media spotlight last week due to its tussle with the Hey email app released by the founders of Basecamp. Apple stopped approving updates for the Hey app and wanted the company to add IAP support to it. After a lot of drama, Apple approved the app update soon after which Hey announced that it will be offering its iOS customers the option to sign up for the service for free as a workaround to Apple’s App Store guidelines.
The App Store and Apple’s various services business have grown tremendously over the last few years and has been generating billions of dollars in revenue for the company. Despite the massive growth, Apple has been using its clout over the App Store to its own advantage and to keep competition at bay. In the past, the company has been called out for its unfair practices by Spotify, with Tile and other companies also testifying against Apple’s anti-competitive behavior. A report from earlier this year had pointed to the Department of Justice quizzing app developers as a part of its anti-trust probe against Apple.