Tech giants wage war with Apple over App Store guidelines
Spotify, Meta and other Big Tech rivals are putting Apple in their crosshairs for what they say are unfair and anti-competitive practices meant to bolster Apple's business at the expense of their own.
Why it matters: The industry backlash towards Apple has been increasing as the tech giant pushes to make more money from its software services, like App Store, Apple Music, iCloud, Apple News, Apple TV+ and Apple Pay.
Driving the news: Spotify on Tuesday spoke out against Apple after the launch of its new audiobooks feature.
- The Swedish audio giant alleges Apple wouldn't allow a button in its app for users to get an email with specific details on how to purchase a particular audiobook outside the app, because doing so would be a violation of Apple's terms. Apple also wouldn't allow Spotify to include a URL to directly purchase an audiobook.
- Meanwhile, Apple updated its App Store guidelines on Monday, making it explicit that apps that sell promoted posts have to give Apple a 30% cut of those transactions, which caught the ire of Meta.
"Apple is putting less imagination behind innovation, while simultaneously doubling down on collecting tolls and stifling competition," said Harry Clarke, Associate General Counsel and Spotify's top competition lawyer. "They are leveraging every tool in the monopolist’s playbook."
- Speaking to investors Wednesday, Spotify CEO Daniel Ek said that Apple keeps "moving goalposts." He noted that the Spotify user experience on Android is "beautiful," and called Apple's purchasing flow "inherently broken because Apple decidedly wanted it to be broken."
- "The App Store was designed to be a great business opportunity for developers," an Apple spokesperson said in a statement to Axios, noting the Spotify app was initially rejected for not following the App Store's guidelines. "We provided them with clear guidance on how to resolve the issue, and approved their app after they made changes that brought it into compliance."
A Meta spokesperson objected to the new App Store guidelines in a statement saying, "Apple continues to evolve its policies to grow their own business while undercutting others in the digital economy."
- "Apple previously said it didn't take a share of developer advertising revenue, and now apparently changed its mind."
Apple, for its part, maintains it is just being more explicit about its existing policy. "For many years now, the App Store guidelines have been clear that the sale of digital goods and services within an app must use In-App Purchase," the Apple spokesperson said.
- "Boosting, which allows an individual or organization to pay to increase the reach of a post or profile, is a digital service — so of course In-App Purchase is required."
Be smart: Apple has increasingly found itself at odds with its Big Tech rivals as it pushes to make more money off of in-app transactions and advertising. Some competitors have pushed for the passage of bills like the Open App Markets Act and the American Innovation and Competition Online Act, which would force Apple (and Google) to loosen their rules.
- Spotify sued Apple for anti-competitive practices in the EU in 2019, resulting in the EU charging Apple with antitrust violations.
- Meta waged a massive lobbying campaign against changes to Apple's app tracking policies that make it harder for advertisers to collect user data for ad targeting.
- "Apple has really doubled down on its role as a Big Tech villain this week," Rick VanMeter, executive director of the Coalition for App Fairness, a group that pushes for more inclusive Apple and Google store rules, told Axios.
- "The introduction of ads to the App Store confirms what we have argued all along: Apple's anticompetitive practices are not intended to promote privacy, security, or the user experience, but rather to pad Apple's bottom line."
The big picture: Apple's increasing App Store lockdown follows growing protest and international action over its rigid payment systems.
- When Epic Games sued Apple over its restrictive App Store in 2020, a judge ruled for Apple to let Epic, and other developers, tell users about alternative payment mechanisms and to link out to their own transaction systems. Apple fought the injunction and appealed the ruling, with a final decision not expected until 2023.
- Meanwhile, new laws in South Korea and the EU's Digital Markets Act will compel Apple to allow rival in-app payment systems.
- And for years, many iOS developers have called out the iPhone maker for the high cut it takes off digital sales.