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FACTBOX-Apple's app store eyed in U.S. Congress antitrust probe

by Reuters
Friday, 13 September 2019 17:56 GMT

By Stephen Nellis

Sept 13 (Reuters) - The U.S. House Judiciary Committee on Friday requested information from Apple Inc Chief Executive Tim Cook as part of an investigation of competition in digital markets.

The lawmakers in a letter sought information related to Apple's App Store, which is the only way that users of devices such as the iPhone can put third-party software on their phones. Apple takes a cut of the sales that developers make when tapping its payment systems on its App Store. https://bit.ly/2kghD2J

But Apple is also a major player in its own marketplace, with in-house apps such as Apple Music competing directly with rivals such as Spotify Technology SA. Other apps that do not compete with Apple, such as Uber Technologies Inc , are allowed to take in-app payments without paying Apple a cut.

Spotify and other developers have alleged that Apple engages in anticompetitive behavior with its App Store, while Apple executives have maintained that they are focused on providing a better user experience for people who buy the company's devices.

Apple did not immediately respond to a request for comment on the letter from U.S. lawmakers. The committee asked for executive communications on the following topics.


-The decision to remove parental control apps Qustodio, Freedom, Kidslox, Mobicip and OurPact.

-How the search algorithm for the App Store ranks results and executive discussions examining whether that algorithm should be changed. The New York Times and Wall Street Journal both performed analyses that found Apple's own apps dominated the results for common search terms, and Apple changed its formula the same month as the Journal published its investigation. https://nyti.ms/2mhwjPV https://on.wsj.com/2Kc0vnZ

-Apple's policies around which apps or categories of apps must use its payment systems on the App Store and which are exempt.

-Whether apps can include links to payment systems other than Apple's. Spotify complained to European regulators that Apple barred it from providing links to promotions that are vital to its business.

-How Apple arrived at its policies on the cut of revenue it takes from app developers, including executive discussions around the precise share taken. Apple charges 15-30% to sellers of "digital goods" like movies and video game credits but does not take a fee from sellers of physical goods and services, which has led companies like Amazon to not sell e-books on Apple devices.

-How Apple decided whether to allow users to set non-Apple apps as the default for applications such as web browsers, maps, e-mail clients and music players.

-Whether to allow non-Apple app stores on its devices. Both consumers and developers have sued Apple over its refusal to allow apps on the iPhone outside the app store, saying the practice raises software prices for consumers and lowers developer profits.

-How Apple decided to build its own apps with similar functions to third-party apps Clue, Duet Display and SwiftKey. Developers of some of those apps recently told the Washington Post that Apple's outsized power made it harder for their apps to compete after Apple copied their ideas. https://wapo.st/2lMVjhM

-Whether third-party web browsers in the App Store must use an Apple-backed technology called WebKit. Apple has used its WebKit requirement to limit the advertising tracking that its rivals Facebook Inc and Alphabet Inc can perform on its devices.


-Details on how Apple has restricted third-party repairs of its devices, including any rules that its authorized service providers must follow.

-Apple's decision in December 2017 to offer discounted battery replacements, including how that move would affect iPhone sales. Consumers have filed dozens of lawsuits accusing Apple of throttling battery performance in older devices to compel users to buy a new phone.

-Apple's decision to launch an "Independent Repair Provider Program," including which parts the company offers and at what prices. After years or resisting "right to repair" laws that would require Apple to provide parts to independent shops, Apple changed course and implemented a program to do so - but some parts such as circuit boards remain unavailable.

-The decision to sell Apple products on Amazon.com Inc's site, including the decision to limit the resellers that can sell Apple products on Amazon. Smaller resellers of Apple products told The Verge the move hurt their businesses. https://bit.ly/2VYLTRy (Reporting by Stephen Nellis in San Francisco; Editing by Cynthia Osterman)

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