Apple seeks to undercut antitrust arguments ahead of Congressional hearing with new study
Ahead of Apple CEO Tim Cook’s appearance before the U.S. House Judiciary Committee next week, Apple has released a third-party study that undercuts arguments that its App Store operates as an illegal monopoly.
Apple (AAPL), like Amazon (AMZN), Google (GOOG, GOOGL), and Facebook (FB), is also currently under investigation by the U.S. Department of Justice and state attorneys general for suspected monopolistic behavior.
The study, performed by economic consulting firm Analysis Group, and made available on Wednesday, looks at the commissions Apple charges developers who sell their apps through the App Store and use its proprietary payment method.
Apple currently charges a 30% commission for app sales and in-app content, but doesn’t charge for physical goods such as deliveries through food ordering apps like GrubHub or rides through services like Uber and Luft.
The tech giant also charges a 30% commission on the first year of orders for subscription services, but reduces that to 15% for each successive year. Google’s Play Store charges similar commissions.
“Our study shows that Apple’s App Store commission rate is similar in magnitude to the commission rates charged by many other app stores and digital content marketplaces,” the study’s authors wrote. “The commission rates charged by digital marketplaces most similar to the App Store, such as other app stores and video game digital marketplaces, are generally around 30%.”
App developers including the likes of Spotify have complained about not only Apple’s commission rates, but the fact that the iPhone maker offers competing apps of its own in the same categories, such as Apple Music.
App developers see the fact that they have to pay a commission as an inherent disadvantage versus Apple, which doesn’t have to pay a fee for its own apps like iMovie and iTunes in the store.
But Apple contends that money collected from commissions is used to invest in the App Store to incentivize developers to use the digital storefront via security, app analytics, application programming interfaces and software development kits.
Outside of the U.S., Apple is facing probes into both the App Store, as well as its Apple Pay system by the European Commission, the European Union’s antitrust watchdog.
The App Store investigation is similar to the current U.S. investigations, while the Apple Pay investigation is looking at Apple’s refusal to allow third-party apps to use the iPhone and Apple Watch’s NFC technology to make mobile payments.
Apple and Amazon are also being investigated by Italy to determine if the companies are working together in an anti-competitive matter to keep electronics retailers not included in Apple’s official retailers program from selling its goods.
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