Meta, Spotify Blast App Store Policies

Topline

Apple’s recent moves regarding its App Store have sparked an angry backlash against the company from several app developers including tech giants like Meta and Spotify, who accuse the iPhone maker of using its market dominance to undercut its rivals.

Apple’s recent changes to its App Store policies have drawn the ire of several major app makers … [+] including Meta and Spotify.

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Key Facts

In a strongly worded blog post published on Tuesday evening, Spotify once again accused Apple of engaging in anti-competitive behavior by using “complicated and confusing” rules on its app store to disadvantage competitors.

Highlighting the issues it faced with its recent launch of Audiobooks on its platform, Spotify said Apple—which also sells audiobooks—rejected the proposed purchasing process on its app three times and forced it to adopt a more cumbersome method.

Spotify claims the rules and Apple’s 30% commission on all in-app sales prevent it from displaying the prices of audiobooks on its app as it has to force customers to request a payment link for the books via email.

Social media giant Meta also criticized Apple’s recent decision to charge a 30% commission on the sales of “boosts” for social media posts—which will impact promoted content on Instagram and Facebook—by forcing these social apps to use Apple’s own in-app payment system.

In a statement shared with the Verge, Meta accused Apple of “undercutting others in the digital economy” and reneging on its earlier promise to not take a cut from developers’ advertising revenue.

Meta argues the biggest impact of this move by Apple will be felt by small businesses and influencers who rely on Facebook’s app to promote their posts instead of large advertisers who work directly with the social giant.

Crucial Quote

“Apple continues to disadvantage competitors, and the impact is huge – on consumers, app developers, and now, authors and publishers. …. I can’t be the only one who sees the absurdity,” Spotify CEO Daniel Ek tweeted.

News Peg

Even as it clashes with Facebook over ads, Apple is attempting to expand its own advertising business. Earlier this week, Apple started displaying more ads on the iPhone App Store. However, several users and developers have raised concerns about the sheer volume of gambling ads showing up on the App Store following the update. Marco Arment, the former Chief Technology Officer of Tumblr and developer of the popular podcasting app Overcast, complained on Twitter that he was “really not OK with” gambling ads showing up on his app’s product page. “The App Store has corrupted such a great company so deeply,” Arment added. John Gruber, who writes the Apple-focuses blog Daring Fireball tweeted: “If these App Store ads were in our email inboxes, we’d all flag every one of them as spam.”

Key Background

Both Meta and Spotify have clashed with Apple over its App Store policies several times in recent years. Earlier this year, Meta acknowledged it expects a $10 billion hit from Apple’s recent sweeping privacy changes that blunt the effectiveness of targeted ads by limiting the tracking of user behavior across multiple apps. Apple has tried to position itself as a champion of user privacy but critics have argued that it is simply trying to gain its own piece of the online advertising business dominated by its rivals Meta and Google. Tesla CEO and billionaire Elon Musk, who is in the process of buying Twitter, also expressed concern about Apple’s recent changes to the App store—moves which will almost certainly affect Twitter’s business. Spotify has frequently clashed with Apple over its dual role as both the arbiter of rules on the App Store and a competitor to other app makers. Spotify has long argued that Apple’s 30% commission on in-app sales offers advantages it own services like Apple Music over third party competitors. In 2020, the EU announced it had opened an investigation into Apple’s alleged anti-competitive practices. The investigation is still ongoing.

Contra

Speaking at the Wall Street Journal’s Tech Live event on Tuesday, Craig Federighi, Apple’s senior vice president of software engineering argued its recent changes will spur innovation in the online advertising space saying: “We felt in the long term, that quality advertising and product privacy could coexist, there would be innovation, some of it from us, some of it from others.” Federighi acknowledged that Apple remains uncertain about what short impact its moves would have.