NEWS: 10.09.10 – A congressional report suggesting that Apple should break up due to its tight control over iOS and apps sold on the iPhone prompted the company to issue a statement in defense late Tuesday.
Apple’s response came after the release earlier in the day of a 449-page report on competition in digital markets published by the House Judiciary Committee’s Antitrust Subcommittee, which stemmed from a nearly year-and-a-half-year review of Apple’s business practices. Google, Facebook and Amazon. According to the subcommittee, these modern technology giants – as compared to those such as railway tycoons and telecom barons from previous years ̵
In the subcommittee’s report, the Cupertino, California-based company was specifically called upon to use its power to exploit app developers – it charges a 30% fee for submitting its apps – and to exercise control over the App Store to create and enforce barriers to competition while promoting their own offerings that exclude and discriminate against their competitors. The technology news-centric blog Engadget reported on Tuesday that, in particular, the report concluded that Apple has a monopoly on app distribution on iOS devices (eg IPhone).
Apple, in an attempt to refute the subcommittee’s findings, responded with a statement that Engadget published Tuesday night in a late breach update to the blog post from earlier that day.
“We have always said that an investigation is reasonable and appropriate, but we completely disagree with the conclusions of this personnel report with respect to Apple. “Our company does not have a dominant market share in any category in which we do business,” Apple said in the statement.
“From the beginning 12 years ago with just 500 apps, we have built the App Store to be a safe and reliable place for users to discover and download apps and a supportive way for developers to create and sell apps globally. The App Store hosts close to two million apps today, delivering promise and meeting the highest standards of privacy, security and quality. The App Store has enabled new markets, new services and new products that were unimaginable a dozen years ago, and developers have been the main beneficiaries of this ecosystem. ”
In its statement, Apple released statistics from last year, saying that in the United States alone, the App Store facilitated $ 138 billion in commerce, with over 85% of that amount going only to third-party app developers. The company also defended itself by pointing out that commission rates, in their own words, are stuck in the mainstream of those charged by other app stores and gaming markets (eg Google’s Google Play, which also charges a 30% fee on apps sent to their store).
“Competition drives innovation, and innovation has always defined us at Apple,” the company said.
On the day the subcommittee’s report was released, CNN reported that the investigation of anti-competitive behavior by technology giants found that Apple, Google, Facebook and Amazon had monopolies in key business segments and abused their dominance in their respective markets in what the cable news network called “complete condemnation” of. companies, and added that the findings of the survey set the stage for possible future legislation. The subcommittee also found that there was significant evidence that the companies’ behavior had hindered innovation, reduced consumer choice and weakened democracy.
According to CNN, the subcommittee’s report issued several recommendations to limit the dominance of the tech giants, ranging from structural separation – mainly to breaking up companies – to providing new tools and funding to antitrust enforcement agencies.
On the political front, the business news-centric site Business Insider also reported on Tuesday that Democrats in the subcommittee said new laws would be passed to ban companies from giving their own products an advantage on platforms they control (eg Apple’s App Store). The Republican members of the group, however, did not agree with all the conclusions of the democratic majority.
In particular, one of the Republican members of the subcommittee – who on Monday published a rebuttal in response to the subcommittee’s report (which was still pending at the time) – protested against calls from Democrats to separate the companies, but they, according to Business Insider stressed that they supported the drive of the investigation and viewed the behavior of the technology giants as competitive.
While extensive legal changes are recommended to promote competition, Engadget reported that – among other recommendations – the subcommittee’s report also proposed strengthening antitrust laws and requiring dominant companies to make their platforms compatible with competitors. If adopted, the changes recommended by the report will dramatically reshape the technology industry going forward.
“The total body of evidence produced during this investigation shows the urgent need for legislative action and reform. These companies have too much power, and that power must be emptied and subjected to appropriate supervision and enforcement, “the subcommittee said in its report.
Earlier this year back in July, Apple CEO Tim Cook, along with Alphabet CEO Sundar Pichai (Google’s parent company), Facebook CEO Mark Zuckerberg and Amazon CEO Jeff Bezos, appeared before Congress to testify at congressional hearings – which included ordained and conducted by the House Judiciary Committee’s Antitrust Subcommitee – for anti-competitive conduct by Cooks and the other CEO’s respective companies. The four CEOs were faced with questions about how the companies’ business practices drove them to the dominant technical giants they are today. Other issues that were affected were innovation, privacy and the key issue: competition.
Business Insider reported on Tuesday that according to the subcommittee’s report, Democrats were very critical of CEOs for evading questions during the hearing, as well as criticizing companies for being slow and uncooperative in delivering documents relevant to the investigation requested of them outside the hearing. . According to the subcommittee, the answers given by the CEOs were often evasive and at times non-responsive, which raised questions about whether these technical giants thought they were out of the reach of democratic oversight.