Spotify, Match tell Senate Apple is abusing power in App Store

Spotify Technology SA and Match Group Inc, the company behind dating app Tinder, accused Apple Inc of abusing its power over software developers that depend on the iPhone maker’s App Store to reach users.

Executives from the companies testified Wednesday at a Senate hearing examining potentially anticompetitive conduct by Apple in the App Store and in Google’s digital marketplace for apps, Google Play.

“Apple abuses its dominant position as a gatekeeper of the App Store to insulate itself from competition and disadvantage rival services like Spotify,” Horacio Gutierrez, Spotify’s chief legal officer, told lawmakers. Apple’s restrictions on developers, he added, “are nothing more than an abusive power grab and a confiscation of the value created by others.”

App developers have complained for years that Apple and Alphabet Inc’s Google force them to give up too big a portion of revenue collected from app sales. They also complain that rules governing app stores are overly strict and sometimes inconsistent.

The hearing, before the Senate Judiciary Committee’s antitrust panel, is part of Congress’s expanding scrutiny of the power of technology companies in digital markets. Democrats, and some Republicans, are pushing for changes to antitrust laws that would make it easier for competition watchdogs to bring cases against companies that they say are buying up – and crowding out – rivals.

Senator Amy Klobuchar of Minnesota, who chairs the antitrust committee, said Apple and Google are gatekeepers that have the power to decide how or whether apps can reach iPhone and Android users, even as they compete against apps with their own services.

“Capitalism is about competition,” she said. “It’s about new products coming on. It’s about new competitors emerging. This situation, to me, doesn’t seem like that’s happening when you have two companies really each dominating in different areas.”

Kyle Andeer, Apple’s chief compliance officer, and Wilson White, a senior director of public policy and government relations at Google, also testified at the hearing.

Andeer told senators that the App Store revolutionised software distribution by making it possible for developers to reach users in a new way. He said the commissions are lower than what was charged for software distribution when Apple introduced the App Store more than a decade ago, and that its tight controls over which apps are allowed are aimed at meeting privacy, safety and performance standards.

Until now, congressional scrutiny has focused more on Google than Apple, and Google is already facing antitrust threats on several fronts. A Justice Department lawsuit filed last year accuses Google of illegally maintaining a monopoly in internet search. Texas and other states have sued over the Mountain View, California-based company’s digital advertising practices.

But antitrust complaints against Cupertino, California-based Apple are piling up. They focus largely on the company’s App Store practices, which are now under investigation by the Justice Department, Bloomberg News has reported.

Jared Sine, Match’s chief legal officer, told senators that a few years ago, Match wanted to make changes to its app in Taiwan aimed at boosting safety for users by instituting ID verification rules. Apple rejected the app, and when Sine contacted an executive at Apple about the decision, the person “disagreed with our assessment of how to run our business and keep our users safe.”

“He added that we just should be glad that Apple is not taking all of Match’s revenue, telling me: “You owe us every dime you’ve made,” Sine said. – Bloomberg