Microsoft’s Smith Spoke to Congressional Committee About Apple

Posted on July 21, 2020 by Paul Thurrott in Apple, Microsoft, iOS with 31 Comments

Microsoft president Brad Smith reportedly told a U.S. Congressional committee about his firm’s concerns about Apple’s Apple Store ahead of an antitrust hearing.

News of this meeting comes via Bloomberg, which cites a single source.

As you may recall, Smith publicly complained about Apple’s illegal business practices back in June, noting that the firm was abusing its role as gatekeeper to a large percentage of its customers on mobile and the incredible fees and non-transparent rules that it imposes on app makers.

“They create a very high price per toll, in some cases 30 percent of your revenue has to go to the toll keeper,” Mr. Smith wrote at the time. “The time has come—whether we are talking about D.C. or Brussels—for a much more focused conversation about the nature of app stores, the rules that are being put in place, the prices and the tolls that are being extracted and whether there is really a justification in antitrust law for everything that has been created.”

Microsoft isn’t alone in complaining about Apple’s App Store policies, far from it. But it is the biggest voice, and so it’s not surprising that the software giant had been invited to discuss its concerns ahead of a House Judiciary Antitrust Subcommittee hearing scheduled for next week. The CEOs of Amazon, Apple, Facebook, and Google will all be present at the hearing. It’s not clear if Microsoft is attending.

Apple is also under investigation by the EU for very similar illegal business practices.

Join the discussion!


Don't have a login but want to join the conversation? Become a Thurrott Premium or Basic User to participate

Comments (31)

31 responses to “Microsoft’s Smith Spoke to Congressional Committee About Apple”

  1. madthinus

    Strange, 30% is the same toll Microsoft extracts from it's store. Looking forward to the reduction.

  2. hellcatm

    apple needs to be looked at for more than their dishonest store business practices. Hopefully this is just the start.

    • toukale

      In reply to HellcatM:

      Why? One can make an argument about the 30% charge which I think is fair. Even that I think is questionable because iOS is at best 18% of the market therefore not a monopoly. I think a lot of competitors are just jealous of how successful the appstore has been and Apple have put a lid on a free for all for its competitors.

      I am against having alternative stores since it will create more harm than good for the average users only to please a small but niche group of folks who wants to abuse it. This is where a platform owner should put their foot down for the benefit of the whole at the expense of the few. Everyone wants a piece of the Apple pie because the best consumers are there. Which makes the case for Apple charging a fee, if you want access to the best consumers of the most successful platform on the planet, then you must pay a fee. We can argue about what the fee is but there is no question there should be a fee.

      • Andi

        In reply to toukale:

        Earth to Apple fanboy. In the US Apple has 50% marketshare and 70% revenue share. It's the dominant player and it's using its dominance to stifle competition.

        App store policies are at stake here more than the fee itself. Stop shilling for the richest corporation in the world.

        • GT Tecolotecreek

          In reply to Andi:

          Earth to Apple hater, IOS had a 14% worldwide market share in 2019.

        • toukale

          In reply to Andi:

          Again, you are making the case for Apple if you want to use their appstore revenue as a way to go after them for monopoly. We need to be careful what precedent we set just because of our biases towards a company we don't like for some reason. Apple is not always going to be or stay where there are now. Everyone with a store have pretty much follow that model, the problem is non of them have had the success Apple has with their store so now they want to cry foul.

        • Paul Thurrott

          Guys. The facts speak for themselves. Let's leave out the personal attacks. Please.
          • nbplopes

            In reply to paul-thurrott:

            People forget that MS had its shared of punished illegal practices.

            Around here it does seam that when it’s Apple or Google it’s because they crooks, but when it’s about MS everyone else is a Cry baby.

            The same things happens in Macrumors.

            Its crazy.

            • Paul Thurrott

              That is a ludicrous assertion given that I routinely criticize Microsoft. And people don't forget. If anything, people remember too much. Holding up today's Microsoft to the company that it was in the 1990s is unfair. They are two completely different companies.
      • Paul Thurrott

        No, one can't.
  3. mrdrwest

    In reply to lvthunder:

    Due process is relative. The justice system is biased and temperamental.

  4. winner

    Microsoft tries a store with the same toll, fails miserably.

    Microsoft complains about Apple's toll to Congress.

  5. tpiselli

    Smells like jealously; MS got caught with their pants down with the iPhone release then steamrolled by Google with Android. The fact of the matter is that Apple invested in their platform and came up with an ecosystem that they feel is best for their users. If a user or developer doesn't like the rules then go elsewhere; it's not like Apple is the dominant platform. What is Brad asking for? The government to dictate how a publicly held company should write their software and support their users.

  6. Pungkuss

    I would love this to come back and bite MS in the butt. Promoting government action is never a good thing. Would love for the EU to force MS to implement more open standards for Word/Excel/PowerPoint. Would be easier to convert office to whatever other productivity suite a company wants to use. Companies can more easily move away from decades of being held hostage by Office.

  7. nbplopes

    Apple practices have not yet been found illegal. This is important. Neither seams to be the stance of MS.

    Still I believe they are charging customers for value that they would not be able to deliver if there were other options to get in. So it’s a value driven by policy, not market.

    Especially they driving value out for themselves from services and innovations for which they don’t contribute in any way. The App Store is just a component of an App.

    I remember Apple complaining about Qualcomm the same way.

    The counter argument of Qualcomm was the same as Apple. They also required Apple to follow a licensing model based on revenue share, I think lower than 30% actually. They argued that their tech enabled deepest the value of the iPhone and the iPad. Any reasonable person would say ... bulshit ... Apple was right. Well Apple argument is just the same as Qualcomm ... bulshit.

    • Andi

      In reply to nbplopes:

      Apple already broke anti-trust laws twice. Wage fixing cartel, strike one, pay to settle. Price fixing ebooks, strike two, pay to settle. Pending 1 billion $ fine in France for anti-competitive policies.

      We can infer from history that using platform dominance in one area - say ios - to prop up new business against other players - say Apple Music vs Spotify - is pretty anti-competitive. Both MS and Google ended up on the receiving end of massive fines from the EU. Expect the same for Apple. They will still be richer than God and with their reserves they can afford to coast for the next century.

  8. red.radar

    Any actions that a company makes to limit access to your customers is anti-competitive.

    this is very similar issue to net neutrality.

  9. kjb434

    This is going to be fun. At least to read up on the highlights.