Microsoft President Discusses Antitrust Concerns with U.S. Committee Against Apple’s App Store

Jul 20, 2020
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Microsoft has been taking a keen interest in the U.S. antitrust committee's investigation against Apple's App Store. Microsoft president and chief legal officer Brad Smith spoke with the House Antitrust Committee via a video call to share his perspective of a big tech company that has been on the wrong side of antitrust regulation before. However, Brad Smith used this opportunity to talk about Microsoft's concerns with Apple's App Store.

The Information reported on this recent meeting. Brad Smith did not talk about any other companies like Facebook, Google, or Amazon who are under similar investigations but went into details about Apple's 30% cut, in-app purchases, approval process, and other requirements. Amazon's Jeff Bezos, Apple's Tim Cook, and Facebook's Mark Zuckerburg are scheduled to testify before the House Antitrust Committee later this month.

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This is not the first time that Brad Smith has gone on the offensive against Apple's App Store policies. He previously spoke at a Politico event to raise concerns:

"They impose requirements that increasingly say there is only one way to get on to our platform and that is to go through the gate that we ourselves have created. In some cases they create a very high price per toll - in some cases 30% of your revenue has to go to the toll keeper."

"The time has come - whether we are talking about D.C. or Brussels - for a much more focused conversation about the nature of app stores, the rules that are being put in place, the prices and the tolls that are being extracted and whether there is really a justification in antitrust law for everything that has been created."

It is interesting that Microsoft would talk about a platform and toll keeping. For Xbox, the company applies the same strategy and takes a cut out of every sale. Game developers, especially small independent developers, have often complained that they never get a prominent spot in the Xbox Store, access to Xbox achievements, or online multiplayer unless they sign up to a paid ID@Xbox membership. Microsoft charges a monthly membership fee to customers as well for online multiplayer. So the toll keeper, in this case, charges money to both the dev and the customer.

Microsoft also takes a 30% cut from each digital game sold. Even if customers buy games from external sources, Microsoft is paid a certain amount of money, so technically, there is no way around it.

Despite the 30% cut that Apple takes, it provides a level playing field to all developers, and they can actually compete against apps from big developers. Simply take a look at any specific category in the App Store and you would see offerings by indie devs, doing well against the likes of apps by Microsoft. As an example, a lot of users prefer to use the indie app Fantastical over Microsoft's Outlook app for calendars.

Are Apple's policies flawless? Of course not. There is much work needed to be done, as Spotify's pressure has shown, however, someone like Microsoft, taking the high ground in this situation is just surprising, to say the least.

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It seems that even though Microsoft has been unable to put up any competition against Apple when it comes to smartphones or app marketplaces, the company is trying other avenues to somehow put pressure on the Cupertino giant. It will be interesting to see how things pan out and what roll Microsoft continues to play against Apple during the investigation.

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