Apple, Google, Amazon, and Facebook Hearing: What is in it for the Mobile Ecosystem?

On Wednesday, the tech giants’ chief executives (Facebook’s Mark Zuckerberg, Apple’s Tim Cook, Alphabet’s Sundar Pichai and Amazon’s Jeff Bezos) defended their companies’ market power against the accusations that some of their actions harm customers and stifle competition. 

The House Judiciary Committee has published the opening statements from the CEOs of the Big Four Tech.

Here are the major arguments of the chief executives about the mobile side in their opening statements:

Increasing Subscription Fees on App Store to 40% from 30%

The House Judiciary subcommittee posted a document on Twitter Apple executive Eddy Cue once considered asking for 40% of the first year for recurring subscriptions.

Asked if Apple would ever increase subscription fee commissions, Tim Cook responded:

Apple’s commissions are comparable to or lower than commissions charged by the majority of our competitors.And they are vastly lower than 50 to 70% that software developers paid to distribute their work before we launched the App Store.

In the more than a decade since the App Store debuted, we have never raised the commission or added a single fee. In fact we reduced them for subscriptions and exempted additional categories of apps. The App Store evolves with the times, and every change we have made has been in the direction of providing a better experience for our users and a compelling business opportunity for developers.

Copying Successful Apps by Using Their Data on App Store 

Tim Cook got a question about if they have developed competitive mobile apps by copying apps on App Store. Cook answered “Congressman, I’m not familiar with that, but I could follow up with your office.” We would never steal somebody’s IP” he added.

Removal of the Screen Time Apps from App Store

Apple removed some kids tracker and screen time apps from App Store last year just after they released their own Screen Time app. Most of the competitor apps confronted that their app updates were rejected by Apple. Rep. Lucy McBath (GA-D) read an email from a mother that explains her disappointment about the removal of the apps helping parents to protect their children’s well being. Then she asked the reason for why Apple removed those apps just after releasing Apple’s own Screen Time app. 

Tim Cook answered the apps “placed kids’ data at risk, so we were worried about the safety of kids,” he said. “The technology that was being used at that time was called MDM, and it had the ability to sort of take over the kid’s screen, and a third party could see it,” he said. “So we were worried about their safety.” 

McBath said “The timing of the removals seem very coincidental,” She asked “If Apple wasn’t attempting to harm competitors in order to help its own app, why did Phil Schiller, who runs the App Store, promote the Screen Time app to customers who complained about the removal of rival parental control apps?”

Cook said that “There are today more than 30 screen time apps in the App Store, so there is “vibrant competition for parental controls out there.”

Facebook’s Acquisition of Whatsapp and Instagram

Zuckerberg insisted that Whatsapp and Instagram wouldn’t have survived without Facebook acquisition. In his opening statement he said:

“Following its acquisition, Instagram was able to get help stabilizing infrastructure and controlling runaway spam. It also benefited from the ability to plug into Facebook’s self-serve ads system, sales team and existing advertiser relationships to drive monetization, and was able to build products including IG Direct and IG Video that used Facebook’s technology and infrastructure. Before it was acquired, WhatsApp was a paid app with a reputation for secure communications; together we built on that by introducing end-to-end encryption and making it free to use. Since its acquisition, WhatsApp has also been able to develop products such as voice and video calling that were built on Facebook’s technology stack.

These benefits came about as a result of our acquisition of those companies, and would not have happened had we not made those acquisitions. We have developed new products for Instagram and WhatsApp, and we have learned from those companies to bring new ideas to Facebook.”

Written by Jordan Bevan

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