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Apple and Google to be on the Senate’s hot seat this week over their uncompetitive app stores

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With Apple and Google wearing big targets on their backs because of their policies regarding the App Store and Google Play Store respectively, Congress will begin hearings this Wednesday over both firms’ app storefronts. According to Bloomberg, Google will be represented by Senior Director of Government Affairs and Public Policy Wilson White while Apple’s Chief Compliance Officer Kyle Andeer will also attend.

Apple, Google to face a Senate Judiciary Committee on Wednesday over app store policies.

The hearing is being held by the Senate Judiciary Committee’s Subcommittee on Competition Policy, Antitrust and Consumer Rights. The panel is investigating whether Apple and Google are not being competitive when it comes to consumers who are buying the apps and the developers who create them. The Committee plans on calling on Horacio Gutierrez, Kirsten Daru, and Jared Sine, top legal executives from music streamer Spotify, tracking app Tile and dating app Match Group, respectively.

Google and Apple both take as much as a 30% cut from in-app purchases and force developers to use the tech giant’s own in-app payment platforms or face having their apps removed from both stores. This is the big issue between Fortnite developer Epic Games, Apple, and Google. When Epic created its own platform for consumers to pay for currency used in Fortnite, it allowed game players to save money on the purchases but denied Apple and Google their 30% cut. Because this violated the rules created by both tech firms, Apple and Google kicked Fortnite out of the App Store and Play Store, respectively.

Spotify is sure to land some punches against Apple’s App Store during its testimony. The largest music streaming app in the world has complained often about the so-called 30% Apple Tax. Movie and television show streamer Netflix has also complained about the cut that Apple takes from developers.

Google argues that when it comes to app stores, it should not be put in the same category as Apple. That’s because Google allows Android users to sideload apps from third-party app stores which in theory allows Android users to find a better price for an app. Apple does not allow iPhone users to sideload apps which gives Apple greater control over the pricing of apps.

In a lawsuit that has achieved Class Action status, iPhone users are suing Apple claiming that its policy against sideloading is forcing them to pay more for apps than they would otherwise. In May 2019, the Supreme Court ruled by a 5-4 vote that the lawsuit against Apple can continue and that iOS users are buying their apps directly from Apple giving the latter control over pricing. The Court rejected Apple’s testimony that it merely hosts apps for sale in the App Store and has no control over their pricing.

While Google does allow Android uses to sideload apps from third party stores, it forces phone manufacturers who want to use the popular Google licensed version of Android to install the Google Play Store, the Chrome browser, and only one search engine (Google Search). The EU has already fined Google $4.8 billion for demanding this and forced it to give users the names of other search engines and browsers that Android users can select from.

The lead Senator on the committee is former Democratic presidential candidate Amy Klobuchar while the aforementioned Senator Lee is the top Republican. When Apple at first said that it would not attend the hearing, the two sent a letter to Apple CEO demanding that the company send someone to represent it. Apple did give in to the demands of the lawmakers.

In the letter to Cook, Klobuchar and Lee wrote, “Apple’s power over the cost, distribution, and availability of mobile applications on the Apple devices used by millions of consumers raises serious competition issues that are of interest to the subcommittee, consumers, and app developers. A full and fair examination of these issues before the subcommittee requires Apple’s participation.”

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