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Illustration: Aïda Amer/Axios

A steady drip of criticism over Apple's App Store policies has become a torrent, as even other tech giants feel emboldened to pile on — but Apple's path to satisfying its critics is uncertain.

Why it matters: Apple's policies aren't that different from those governing other digital marketplaces, but its size and inflexibility could fuel regulatory action from antitrust authorities in the U.S. and beyond.

The big picture: The criticisms of the App Store are many and varied, but most revolve around the 30% cut that Apple takes on sales of apps and other digital goods, with very limited workarounds.

Driving the news: Microsoft on Sunday became the latest company to take aim at Apple, warning in a court filing that a move to restrict Epic Games' access to developer tools could impact lots of games from other developers that rely on Epic's Unreal game engine.

Others recently raising alarm over the way Apple runs the App Store include:

  • Epic itself, locked in a battle over the 30% commission, which wants a court to restore Fortnite to the App Store and stop Apple from cutting off its developer access. (Apple defended itself Friday, likening Epic to a shoplifter and insisting Epic's issues were a crisis of its own making.)
  • Automattic, blocked from updating its WordPress app for not letting users buy .com domains through Apple's in-app purchase system, despite not letting users buy such domains directly in the WordPress app at all. (Apple clarified its position and apologized for any confusion over the weekend.)
  • Plus, a group of news publishers asking for better App Store terms; Facebook, which suggests Apple's terms will hurt small businesses; and Airbnb, which reportedly talked with House antitrust enforcers after Apple asked for a commission on Airbnb's recently launched online experiences.

Between the lines: Most Apple critics want to be freer to use alternatives to Apple's payment systems, while some want to see Apple lower its cut or not apply it to particular classes of goods and services.

  • Apple has drawn a bright line, saying it is entitled to a cut of all digital goods and services — a fee that doesn't apply to the sale of physical goods and in-person experiences it facilitates.

That position harms competition, several companies have long argued, even before the recent spiraling of grievances.

  • Spotify, for instance, says Apple gives itself a competitive edge by keeping all Apple Music subscription revenue while eating into that generated by other streaming services. EU antitrust regulators are now probing the App Store, in part due to Spotify's complaints.
  • Match Group says Apple puts paid services at a disadvantage against ad-funded rivals that don't have to give Apple a cut of their revenue.

Yes, but: Apple's rules are slightly stricter, but not all that different from those on other digital marketplaces, including those run by Amazon, Google and Microsoft.

Our thought bubble: While it's easy to see how Apple's digital versus physical goods distinction can feel unfair or arbitrary, it's hard to see where to draw a different line.

  • Apple could face pressure to offer developers more alternatives. Notably, Epic also baited Google into pulling Fortnite from the Play Store and then suing, but Epic is still able to distribute Fortnite directly to Android users.
  • Apple insists that offering such alternatives would make it harder to keep customers safe from malware and privacy invasions.

The bottom line: Expect these arguments to come from more companies in more settings, with courts and regulators likely having to decide if there's an antitrust problem at play.

Go deeper

Nov 18, 2020 - Technology

Apple settles with states for $113 million over slowed iPhones

Photo: Dominic Lipinski/PA Images via Getty Images

Apple will pay states $113 million in a settlement over allegations that the phone maker secretly throttled speeds on older iPhones to extend battery life, Arizona Attorney General Mark Brnovich announced Wednesday.

Driving the news: 34 states were involved in the investigation, which alleges that starting in December 2016, Apple released a software update reducing performance to keep some iPhones from unexpectedly shutting down.

Ina Fried, author of Login
Nov 18, 2020 - Technology

Microsoft adding security chip to Windows machines

Illustration: Aïda Amer/Axios

Microsoft said Tuesday it is working with chipmakers AMD, Intel and Qualcomm to bring a new security processor to Windows machines. Dubbed Pluton, the security chip is based on work done for the Xbox One and designed to bring an added layer of security.

Why it matters: A number of difficult-to-patch chip flaws in recent years have left computers vulnerable to attack. It also comes as many of the biggest tech companies, including Apple, Google, Microsoft and Amazon, are increasingly designing their own silicon to augment traditional processors.

Biden's Day 1 challenges: Systemic racism

Photo illustration: Sarah Grillo/Axios. Photo: Kirsty O'Connor (PA Images)/Getty Images

Advocates are pushing President-elect Biden to tackle systemic racism with a Day 1 agenda that includes ending the detention of migrant children and expanding DACA, announcing a Justice Department investigation of rogue police departments and returning some public lands to Indigenous tribes.

Why it matters: Biden has said the fight against systemic racism will be one of the top goals of his presidency — but the expectations may be so high that he won't be able to meet them.