US antitrust hearing: Apple's preferential treatment to certain apps comes to fore

With the advent of smartphones and computers before that, market places have evolved fast from being person-to-person to digital, where customers interact with software applications on a mobile/PC screen to get service delivered such as hailing a cab, ordering food or play games.

In that aspect, we have to acknowledge that Apple played a critical role with the launch of the iPhone in 2007 and the unveiling App Store in the following year.

From the humble beginning of just 500 apps to 1.7 million, Apple App Store has grown exponentially and has helped the iPhone/iPad owners get access to almost every service possible. Even the recently announced iOS 14, which off App Clips. Currently, iPhone users had to install dedicated apps to buy a product, or coffee at a local Starbucks or rent a vehicle or bike.

With so many apps on the iPhone, the home screen looks messy and, some times it would be difficult other apps and swipe through pages of homes. App Clips are a special application that does not be installed on the iPhone at all. They are easily discovered and accessed by scanning a new Apple-designed App Clip code, through NFC tags and QR codes, or shared in Messages or from Safari, all with the security and privacy expected from apps.

However, Apple is also criticised for charging exorbitant 30% commission on developers for in-app purchases on the first year of the installation of an app on an iPhone, and in the following years, the Cupertino company takes 15% cut.

This apparently forced several companies including Netflix to withdrew in-app subscription options on iOS devices and asked the consumers to renew it on the company's official website.

Now, more dirt has come up during the Anti-trust hearing by Members of US Congress subcommittee on Apple, Google, Amazon, and Facebook.

Valdez Venita Demings, US congresswoman representing Florida questioned Apple CEO, Tim Cook, why the company took off some Parental Control apps. To that Cook said the apps did not meet the company's user privacy policy. Demings followed up with a counter-argument why Apple continued to allow certain government-owned apps (implying ToTalk Messenger app of UAE), which had similar security vulnerability and allowed them to put surveillance on its citizens. To that, Cook said to look it into the matter and get back with more information and submit to her office.

Later, another US Congresswoman Lucy Kay McBath who represents Georgia took on Tim Cook by accusing the Cupertino-based company of unfair practice of removing Parental Control apps such as OurPact and Kidslox after the launch of the Screen Time feature through iOS 12 in 2018. This feature helps user control the usage of apps and curb using iPhone all the time. Furthermore, it gave the option to parents to control their children's iPhone on what apps they can download and watch videos and block the iPad/iPhone usage during a particular time slot of the day.

Congresswoman McBath quoted a mother who was disappointed over Apple removing the OurPact and other related apps, which offered better services than the iOS 12's Screen Time feature.

To that Cook reiterated that Apple was concerned that the removed apps did not meet the company's security policy and the apps had accrued children's privacy data without proper security protocols particularly related to MDM (Mobile Device Management) and third-party clients of the apps could view them. Also, Cook added that Apple App Store has close to 30 Parental controls apps and there is a vibrant competition between the developers and potential to earn more revenue than ever before.

Congresswoman McBath did not buy the Cook's argument as the timing of the Screen Time launch and eventual removal of rival parental control apps seem not co-incidental.

McBath charged that Apple took six months to re-instate those same apps, but with no major changes in the privacy protocols. This time gap made people switch to alternatives including to Apple's Screen Time and there was a low chance of customers migrating back to the previous app. Also, six months is a really long time for a small startup to stay afloat without any revenue, which we can see ourselves in the Covid-19 pandemic-induced lockdown.

Without giving time to Cook respond, McBath moved on to the next question. She noted Apple, when it launched the iBooks in 2010, unfairly targeted Random House publishers, as the latter wanted to offer its own e-books through a mobile app.

It even submitted it to Apple App Store but was refused initially as Apple wanted Random House to join the iBooks.

However, Tim Cook said he did not have knowledge of that particular incident but said the rejection of the app may have been due to not meeting the standards in terms of user-interface and other reasons.

Now, Bloomberg report has revealed that the tech titans Apple and Amazon, accused of stifling rival brands made a lucrative deal with themselves on allowing Amazon Prime Video app on Apple App Store.

Apple apparently charged a 15% fee on the Amazon Prime Video subscription by the consumer for the first year. That's half the commission the Cupertino company levies on other applications in the App Store.

It has come to light that Eddy Cue, an Apple senior vice president, and Jeff Bezos, Amazon CEO and founder personally negotiated the aforementioned deal in 2017. It also included Apple's digital assistant Siri integration with Prime Video service.

It is said that Apple coaxes developers to integrate the former's tech in their apps to get discounts on fees to enter the App Store. Though it seems Apple wants to offer seamless app experience on the iPhones and iPads, the aforementioned practice is just frowned upon in the market. Members of the House antitrust subcommittee is against such unethical deals between major tech firms and view them has an act of monopolisation of the market. The ultimate aim of the committee just wants fair and equal opportunities to all.

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