Apple’s App Store Draws E.U. Antitrust Charge

This week, Apple flexed its power by introducing a software update that gave customers more power to block data tracking by apps, a change that has started a feud with Facebook, which has criticized the move as anticompetitive because it will harm the ability to sell online advertising.

Companies are increasingly pushing regulators and courts to intervene. At a congressional hearing in Washington last week, companies including Spotify, Tile and Match Group told senators how policies set by Apple and Google, whose Play Store is another pinch point for app developers, hurt competition and resulted in higher app prices for customers. And next week, a trial is scheduled to begin in California between Apple and Epic Games, the maker of Fortnite that has filed an antitrust lawsuit against Apple over its fees.

Britain is conducting another antitrust investigation of Apple over the App Store after receiving complaints from developers.

The case announced on Friday is part of a broader effort by the European Union to clamp down on so-called gatekeeper companies like Apple, Amazon, Facebook and Google. Policymakers are drafting laws that would prevent the tech giants from abusing their market power to harm smaller companies, including how they manage app stores.

Efforts to force App Store changes pose a threat to a fast-growing piece of Apple’s business. As sales of iPhones, iPads and other hardware devices mature, the company is counting on digital services as a fresh source of growth. Optimism among investors about that business has helped send Apple’s stock soaring, giving it a market value of more than $2.2 trillion, the largest in the world.

Pressure on Apple about the App Store has already led the company to make changes. Last fall, the company halved its commission on many app sales to 15 percent for developers who made less than $1 million a year on their iPhone apps. That change affected about 98 percent of developers who paid the commission, but it still hardly touched Apple’s bottom line; those developers accounted for less than 5 percent of the revenue Apple collected from apps, according to estimates by Sensor Tower, an app data firm.

Apple earns far more by taking a cut of sales from the most popular apps. Match Group, which makes the dating app Tinder, said recently that it paid Apple nearly $500 million a year in commission payments, its single largest expense.


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