Apple: App Store should be regulated by privacy, not competition

14 April 2022

Apple has agreed to loosen payment restrictions on its App Store, a major change announced in a settlement with small developers as the US technology giant faces growing scrutiny and legal challenges over its tightly controlled online marketplace. (Photo by Chris DELMAS / AFP)

Apple head Tim Cook attacked moves to regulate his company’s App Store in a rare speech in Washington earlier this week, arguing that new rules could threaten iPhone users’ privacy.

Cook put forth the Silicon Valley giant’s perspective as momentum gathered for legislation that could weaken Apple’s app market dominance, which critics have said amounts to a monopoly. “We are deeply concerned about regulations that would undermine privacy and security in service of some other aim,” Cook told an International Association of Privacy Professionals gathering.

“Proponents of these regulations argue that no harm would be done by simply giving people a choice, but taking away a more secure option will leave users with less choice, not more,” he added.

At issue are efforts by policymakers in the United States and elsewhere to force Apple to let apps onto the iPhone from places other than the App Store, which is currently the only gateway onto the firm’s billions of devices in circulation. Apple requires developers to adhere to its rules for what apps can or can’t do, and makes them use the App Store payment system for all transactions there.

Apple takes a commission of up to 30% of app purchases or transactions, contending it is a fair fee for providing a safe, global platform for developers to hawk their creations. Apple maintains that 85% of the approximately 1.8 million apps at the digital shop pay nothing to the Silicon Valley-based tech giant.

Apple and Google hold a dominant position in the market, with their operating systems running on the overwhelming majority of the world’s smartphones.

Apple has clashed in court with Fortnite creator Epic Games, which has sought to break Apple’s grip on the App Store, accusing the iPhone maker of operating a monopoly in its shop for digital goods or services. A federal judge in November ordered Apple to loosen control of its App Store payment options, but said Epic had failed to prove that antitrust violations had taken place.

Apple has also recently sparred with regulators in Europe. Letting iPhone users “sideload” apps from digital shops other than the App Store would bypass Apple vetting for malicious code or data collecting features, Cook said.

“That means data hungry companies would be able to avoid our privacy rules, and once again track our users against their will,” Cook added. Critics have countered that Apple uses the App Store to its advantage, taking a bite out of financial transactions and keeping app makers under its thumb.

“If we are forced to let unvetted apps on the iPhone, the unintended consequences will be profound,” Cook argued. “We will continue to make our voices heard on this issue.”