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Apple and Google speak out against tech-focused antitrust bills
Apple and Google speak out against tech-focused antitrust bills
Apple sent a letter Tuesday to Senate Judiciary Committee members warning against two antitrust bills that could impact the tech industry. Meanwhile, Google published a blog post Tuesday titled, "The harmful consequences of Congress's anti-tech bills."
The letter and blog post arrive less than two days before a scheduled Senate debate over S.2992, the American Innovation and Choice Online Act.
The legislation targets companies operating "covered platforms," which essentially refers to a platform that has millions of monthly users and a market cap in the billions, and is a "critical trading partner for the sale or provision of any product or service offered on or directly related to the online platform." One platform that would fall into this category is Apple's App Store.
Right now, iPhone and iPad users can only access apps through the App Store. If S.2992 passes into law, iPhone users might be able to access third-party apps outside of the App Store. The letter from Apple details the privacy issues that could affect users by making it difficult for Apple to oversee the collection and management of user data by apps downloaded outside of the App Store. Apple wrote that the bills would let predators and scammers completely sidestep Apple's protections.
"After a tumultuous year that witnessed multiple controversies regarding social media, whistleblower allegations of long-ignored risks to children and ransomware attacks that hobbled critical infrastructure, it would be ironic if Congress responds by making it much harder to protect the privacy and security of Americans' personal devices," Apple wrote.
Google's blog post did not call out any bills by name. Instead, it referred to "anti-tech bills" and "antitrust law," saying these measures could "break" online services like Google Search, Maps and Gmail. The post also detailed how the bills could degrade the security and privacy of Google services and harm US technological leadership.
The American Innovation and Choice Online Act was announced on October 14, 2021, and introduced by US Sens. Amy Klobuchar and Chuck Grassley.
"As dominant digital platforms -- some of the biggest companies our world has ever seen -- increasingly give preference to their own products and services, we must put policies in place to ensure small businesses and entrepreneurs still have the opportunity to succeed in the digital marketplace," Sen. Klobuchar said.
The US Senate debate on the American Innovation and Choice Online Act is scheduled for Thursday, Jan. 20, at 9 a.m. ET.
Apple Reportedly Faces Further EU Antitrust Charges Following a Complaint From Spotify
Apple Reportedly Faces Further EU Antitrust Charges Following a Complaint From Spotify
Apple will facing additional antitrust charges from the European Commission in the coming weeks, according to a Monday report from Reuters. This is said to come due to a music streaming investigation triggered by a complaint from Spotify.
The extra charges come a year after the EU accused Apple of breaching competition law in the music streaming market through restrictive App Store rules.
At the time, the EU's accusation outlined concerns from a 2019 complaint made by Spotify regarding Apple's policy for managing in-app payments. The complaint addressed how Apple charges Spotify and other subscription-based companies a 30% fee for in-app purchases, which, Spotify argued, was stifling competition for companies that compete with Apple Music.
The commission now intends to set out extra antitrust charges in a supplementary statement of objections, according to Reuters, something that's normally issued when an EU competition enforcer has changed a portion of its case or found new evidence.
Apple didn't immediately respond to a request for comment.
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Apple Now Allows Apps in South Korea to Use Third-Party Payment Systems
Apple Now Allows Apps in South Korea to Use Third-Party Payment Systems
Apple said on Thursday that apps exclusively released in the South Korean App Store can use third-party payment systems to take in-app payment. The move comes after South Korea last year amended its Telecommunications Business Act, which banned app stores from forcing developers to use its first-party payment systems. Google complied with the law in November, and now Apple follows suit.
The South Korean law clamps down on app stores in an effort to rein in tech giants, who've been called out for their monopoly over in-app payments. Apple, in particular, has been criticized for the commission it charges to use its payment system, which critics have dubbed the "Apple Tax." The tax gives Apple up to a 30% cut on subscriptions and in-app purchases. This has been the source of many developer complaints throughout the years.
Though developers can request to use a third-party payment system for apps exclusively distributed in South Korea, Apple will still take a 26% commission for payments made through these systems. If an app is available globally, developers must create another version of the app for distribution solely on the App Store in South Korea.
Apple warns that users will not have access to some App Store features if developers choose to go this route, including features like Ask to Buy and Family Sharing. Moreover, Apple won't be able to assist users with refunds, purchase history, subscription management and the like. Instead, developers will now be responsible for these features, and they must report all sales to Apple each month.
Both Apple and Google opposed the South Korean law, citing the benefits of its first-party system. Namely, both tech giants argued that allowing a third-party payment system undermines their users' safety and privacy on their app stores, increasing the risk of fraud.
Lawmakers around the globe are looking to establish limits for big tech. The US Congress is working on a slate of bills aimed at antitrust and privacy that would change the way that tech giants do business.
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Tinder-Parent Match Group Sues Google Over Play Store Billing
Tinder-Parent Match Group Sues Google Over Play Store Billing
Match Group, the company that operates dating apps such as Tinder, Hinge and OkCupid, has filed a lawsuit against Google, accusing the internet giant of forcing it to use the Google Play Store's billing system, paying royalties for subscription transactions. The lawsuit, which was filed Monday in federal court in California, accuses Google of violating federal and state antitrust laws.
"Ten years ago, Match Group was Google's partner. We are now its hostage," Match Group said in a press release.
Match Group said Google assured app developers that they would be able to choose alternative payment systems for their customers, only to do an about-face. The dating giant says that its users prefer Match's internal billing system and that Google's system is "lacking capabilities."
Google pushed back against the lawsuit.
"This is just a continuation of Match Group's self-interested campaign to avoid paying for the significant value they receive from the mobile platforms they've built their business on," a Google spokesperson said in a statement to CNET. "Like any business, we charge for our services, and like any responsible platform, we protect users against fraud and abuse in apps."
Google went on to point out that Match Group was sued by the Federal Trade Commission in 2019 for failing to filter out fake profiles that may have incentivized users into paying for subscriptions. The lawsuit was thrown out earlier this year. Last month, Match also won a lawsuit against Muslim dating app MuzMatch over trademark infringement.
App store fees have been at the center of a number of legal battles in recent months. In March, Google struck a deal that would allow Spotify to offer its own in-app payment option alongside Google's. This deal came after Epic Games, creators of Fortnite, sued both Apple and Google for not allowing its own in-app payment systems, meaning that every in-game costume purchase had Apple and Google taking a percentage off the top. Google and Epic Games have agreed to a trial in early 2023.
In this new lawsuit, Match says it attempted to resolve Google's concerns but was told that its apps would be removed from the Google Play Store by June 1 if it didn't comply. The dating app maker's lawsuit accuses Google of violating the Sherman Antitrust Act, the California Cartwright Act, the California Unfair Competition Law and California tort law by demanding companies exclusively use Play Billing.
"They control app distribution on Android devices, and pretend that developers could successfully reach consumers on Android elsewhere," Match Group CEO Shar Dubey said in a statement. "It's like saying, 'you don't have to take the elevator to get to the 60th floor of a building, you can always scale the outside wall.'"
Given that 90% of app downloads on Android occur on the Google Play Store, Match says Google's marketplace is the only viable app platform. Google said if Match didn't like its terms, it could distribute its apps elsewhere.
Match says fees can be as high as 30%, which is 10 times more than those charged by payment processors such as Visa and Mastercard. Google says its high fees are necessary to protect Android users from fraud and abuse and that Match Group is eligible to pay 15% on Google Play for digital subscriptions.
"While Google has claimed that 99% of the developers subject to the Google tax will qualify for the lower rate, hidden by this statistic is the fact that not all in-app purchases qualify and some of the most popular are still subject to the 30% tax," according to an FAQ created by Match Group regarding the lawsuit.
When asked about the high percentage rate of its fees compared with payment processors, Google said the Play Store does more than process payments, adding that the fees help keep the Android operating system free and fund development of platforms such as Android Auto and TV, security, app distribution, developer tools, and billing systems around the world.
If Match is forced to stop using its internal payment system, the company says it will suffer "irreparable damage to its customer relationships, reputation, business performance, and goodwill and its users will be harmed by increased prices and Google's monetization of their data."
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Microsoft vows Windows, Xbox app stores will promote competition
Microsoft vows Windows, Xbox app stores will promote competition
When we think of app stores, the ones that come to mind are typically those for Apple's iPhone, Google's Android devices and maybe Amazon's Fire tablets. But Microsoft said Wednesday that it wants to set itself apart with a series of "principles" it's publicly committing to that it says will promote competition in its app stores.
The tech giant's Open App Store Principles include privacy protections and transparent editorial rules, as well as a promise to hold Microsoft's own apps to the same standards the company applies to others. Microsoft is publishing the principles in an effort to weigh in on new laws that are before the US Congress, as well as to ease concerns about its own potentially monopolistic size amid its proposed $68.7 billion acquisition of gaming giant Activision Blizzard.
"Ultimately, we believe that this principled approach will promote a more open app market and better serve our users and creators alike," Microsoft President Brad Smith wrote in a blog post Wednesday.
In addition to its principles for its app stores, Microsoft promised that it'll continue to offer the top-selling war simulation franchise Call of Duty, as well as other Activision Blizzard games, on competing devices, like Sony's PlayStation and Nintendo's Switch. "We believe this is the right thing for the industry, for gamers and for our business," Smith said.
Microsoft's efforts come at a time of intense scrutiny from lawmakers, regulators and everyday people around the world. The tech industry includes some of the largest and most powerful companies on Earth. But during the past few years a string of controversies over the spread of disinformation and hate speech has intensified already hot debates about the industry's approach to privacy, security and other sensitive issues.
Meta, Twitter, Google, Amazon and Apple have all found themselves answering questions before congressional committees that are considering a wide array of laws, including antitrust and advertising industry reforms, to rein in the companies' power and possibly punish perceived bad behavior.
Microsoft has largely stayed out of the crosshairs, despite having been declared a monopoly during a trial two decades ago. But its proposed purchase of Activision Blizzard, amid other significant investments in its Xbox video game division, has already raised some concerns.
In many ways, Microsoft's 11-point set of principles also serves as criticism of other tech industry giants, including Apple and Google, who've faced harsh words over how they control their respective app stores. Microsoft said, for example, that it won't require developers to use its payment system for in-app payments, something Apple and Google have defended, including in lawsuits with Fortnite maker Epic Games.
Though Microsoft didn't name Apple or Google directly, it did say its rules are written in reaction to the "friction" that exists today between developers, gamers and app stores across the web.
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The iPhone at 15: How Apple's Phone Became the Center of Your Life
The iPhone at 15: How Apple's Phone Became the Center of Your Life
This story is part of Focal Point iPhone 2022, CNET's collection of news, tips and advice around Apple's most popular product.
What's happening
On June 29, 2007, the first iPhone went on sale. A decade and a half later what defines the iPhone has shifted away from just design and hardware specs to dozens of Apple-centric features and services.
Why it matters
For better or worse, the iPhone has become home to our photos, music, conversations, ideas, games, identity, work, social media, shopping, keys and money. It will likely continue to do so for the foreseeable future.
Today marks 15 years since the first iPhone went on sale. When Steve Jobs introduced the original iPhone he wryly hyped it as three revolutionary products: an iPod, a phone and an internet communicator. The first iPhone only came in one size and the only decision you had was whether to get 4GB of storage or 8GB. As far as carriers, only AT&T supported Apple's first phone in the US.
At the time, the idea of carrying an iPhone instead of a flip phone and an iPod was enough to convince some people to buy one. For others like me, the iPhone's main appeal was the touchscreen, which seemed unreal and futuristic.
"From the very beginning, one of the unique things about [the] iPhone was that we wanted to fuse together software, services and hardware to create a simple, powerful kind of magical experience," said Bob Borchers, Apple's vice president for product marketing. "And with the original iPhone, it was that interaction of multitouch and pinch to zoom, where you started to see that come together."
Fifteen years later, Apple sells eight different models of iPhone, five of which have launched in the past 10 months. There is at least one version that works with pretty much every major phone carrier in the world. The iPhone is available in an array of colors, finishes, sizes and storage options that now top out at 1TB. And while the screen is where most of the magic happens, it's no longer the main appeal of the iPhone.
Over the past decade and a half, what defines the iPhone has shifted away from just design and hardware specs. Instead, the iPhone and iOS have become a gateway into Apple services and features like iMessage, FaceTime, Siri, Apple Music, Apple Pay, top-of-the-line cameras and apps like Uber, TikTok, Twitter and WhatsApp. For better or worse, the iPhone has become home to our photos, music, conversations, ideas, games, identity, work, social media, shopping, keys and money.
In 2022, the iPhone continues to extend beyond its svelte metal-and-glass chassis into the world around us. It's the backbone for products like the Apple Watch and AirPods, and will likely play a role in future Apple products like rumored AR glasses.
It also serves as the foundation for Apple's digital services, which have become an increasingly important factor to differentiate the iPhone from competing mobile devices. These services have evolved rapidly in recent years along with the iPhone.
Find My, which started as a tool in 2010 for locating a lost iPhone, has grown into a network for finding Apple devices and pretty much anything you can attach one of Apple's tiny AirTag trackers to. Some products, like VanMoof's S3 bike, even have built-in Find My support, eliminating the need to add an AirTag entirely. As of 2021, Apple's Find My network had hundreds of millions of devices, most of which were iPhones.
Just weeks ago at WWDC, Apple's annual software developers conference, the company announced iOS 16 with expansions to its nearly decade-old Wallet app and Apple Pay service. Essentially, Apple wants to make your physical wallet obsolete. There's also a new feature called Apple Pay Later that lets you split the cost of an Apple Pay purchase into four equal payments spread over six weeks, with zero interest and no fees. It's done entirely through your iPhone.
The 2022 iPhone SE is nearly identical to the 2020 version but gets more durable glass, 5G and the A15 Bionic chip that debuted in the iPhone 13.
Kevin Heinz/CNET
In fact, you need an iPhone to access or use most of these services. Keep in mind that, for years, the iPhone's premium price made it inaccessible to many, and that's still true of Apple's top-of-the-line iPhone Pro models. The recently upgraded iPhone SE gives Apple the opportunity to expand the iPhone's reach even further. It's the purest example of what defines an iPhone in 2022. The SE blends the body of an iPhone 8 with the glass and processor from the iPhone 13. At $429, it's currently the most affordable way to get people into Apple experiences.
I spoke with Borchers ahead of the iPhone SE launch in March about the phone and why Apple added an A15 Bionic chip to it.
"It's actually a really easy decision to put as much capability as we can in today, in order to invest in and create opportunities for those future experiences. It's something that distinguishes us from others," said Borchers.
No other phone maker takes this approach. It would be like Samsung using the body of its Galaxy S8 and putting the Galaxy S22's processing power inside. The upcoming Pixel 6A will be the first budget Android phone that uses the same processor, Google's Tensor chip, as the flagship Pixel 6 and 6 Pro. Of course, Google isn't putting it into the body of Pixel 2 and instead is introducing a new design.
It makes sense that Apple's cheapest phone has the same processor as its most expensive: It's all about giving people access to Apple experiences. For example, if you buy an iPhone SE, you can use the Live Text feature in iOS 15 to grab text with your camera or copy it from a photo. And while the 2016 and 2020 versions of the iPhone SE sold well, it seems the 2022 version isn't breaking any sales records yet. Apple doesn't disclose a specific model breakdown of how many iPhones it sells, but analyst Ming-Chi Kuo lowered his shipping estimates for the iPhone SE (2022) by 10 million. The lower demand could be an effect of rising inflation and the fact that the 2022 and 2020 versions of the iPhone SE look identical.
The SE showcases how iOS and Apple Silicon become the bedrock for everything you do on your iPhone. Obviously, not every model in Apple's iPhone lineup is equal. More expensive phones like the iPhone 13 Pro come with a contemporary design, high refresh-rate screens, larger camera sensors and tools like the U1 ultrawideband chip and lidar.
These extra perks mean you can use your iPhone in more ways. For example, if you've got the right car, you can unlock it and start it with your iPhone. Borscher describes moments like these as "automagic," meaning it just works. The same way a pair of AirPods can switch from your iPhone to your Mac for watching a video, or the way you can unlock your Mac using your Apple Watch.
Apple first introduced AirPods in 2017 with the release of the iPhone 7 and 7 Plus, which lacked a physical headphone jack.
Sarah Tew/CNET
Such growth has consequences. Antitrust concerns over the app store and mobile payments, debates about screen time, Apple's contentious dealings with the FBI, criticism that all these services are part of a strategy to lock people into Apple's ecosystem and, more recently, privacy questions over AirTags are just some of the concerns that have grown alongside the iPhone's meteoric success. There are even questions as to whether Apple can launch another product line that is even half as successful as the iPhone. My CNET colleague and Apple reporter Ian Sherr points out that products like the Apple Watch and AirPods are lucrative lar gely because of their connection to the iPhone.
Over 15 years, the iPhone has become ubiquitous and helped Apple become a nearly $3 trillion company. The next iteration of the phone, likely called the iPhone 14, is expected to launch this September. It will no doubt run on iOS 16 and have the newest version of Apple's A-series processor and will continue to support the Apple experience. As for the long-term, my colleague Lisa Eadicicco thinks the most important part of future iPhones will be how it works with everything around it.
