Horacio Gutierrez, the Chief Legal Officer of Spotify, recently testified in front of the US Congress, stating that Apple is a “ruthless bully.” In an interview with The Verge’s podcast Decoder with Nilay Patel, Gutierrez spoke out loud about his thoughts on Apple and how he and several app developers are quite frustrated with Apple’s way of doing business.
What is the problem?
Gutierrez mentioned that when Spotify signed up to be in Apple’s App Store, Apple was more than welcoming to apps with open hands, courtesy of its prolonged fight with Android. Almost all important applications were included with time. This was when they started to change the rules and to tighten them even more. Then they chose to merge Apple’s proprietary payment system to the App Store as the only payment mode available. Furthermore, Apple levied a 30% tax on various digital content and gaming applications. This hurt the companies as they had no choice but to pay up Apple to keep their apps in their App Store.
Apple hasn’t allowed payment systems like PayPal and Mastercard etc. saying that their system is superior. This is where the question arises. If Apple’s system is so superior, why doesn’t it allow other payment systems to be present during in-app purchases as well? Why doesn’t it let the user decide which system they want to opt for? It will be a fair opportunity for competition. The user will also have the power to decide between a 30% higher-priced Apple Payment System or other lesser-priced systems.
The Looming Concern
Gutierrez’s main concern lies in the suppressive and monopolizing nature of Apple. Being a trillion-dollar company gives Apple the edge to sway the market in its direction. This is exactly what they are doing. But in the longer term, this will curb the growth in innovations.
The competition will take a direct hit. Ever imagined why you couldn’t buy a Kindle book in the Kindle app? If you buy anything through the app, Apple again charges a commission of 30% from Amazon, so they lose profits.
Apple justifies this taxation of apps, saying that these funds help them protect the privacy and security of their users. As far as we are concerned, this claim does sound like a cover-up. Apple promises privacy and security of users when on all of its products that make up the Trillion-Dollar Company.
So why would they need a meagre 30% taxation to provide funds for the same? Although Apple has been revolutionary in its technological advancements and has really worked hard behind its amazing products, there are certainly some questions on its way of doing business. These questions are being highlighted by cases like Epic Games v. Apple and Spotify v. Apple. The root of all the problems now just seems to be a number: 30%.