Apple CEO Tim Cook Likens Competition for Attracting Developers to a 'Street Fight for Market Share' in Smartphone Business

Apple CEO Tim Cook is today testifying in an antitrust hearing with the U.S. House Judiciary Antitrust Subcommittee, where he was questioned about Apple's App Store policies.

timcookantitrust
Cook was hit with complaints from developers that the committee has spoken to. Apple was accused of making its ‌App Store‌ rules unavailable to developers, arbitrarily enforcing those rules, changing them at will, enforcing rules that benefit Apple, and discriminating between smaller and larger app developers.

In response, Cook claimed that Apple treats all developers the same, with open and transparent rules. "We care deeply about privacy and quality. We look at every app, but the rules apply evenly to everyone." Cook said that some developers are not favored over others and that Apple examines all apps, small or large.

Cook was questioned about reduced commission rates for apps like Amazon Prime, which Cook said are available to "anyone meeting the conditions." The Congressman questioning Cook went on to ask whether Apple uses data collected from the ‌App Store‌ to decide whether it would be profitable for Apple to develop a competing app, a question that Cook skirted.

Cook was then asked what was stopping Apple from potentially raising its ‌App Store‌ commissions and fees, something that Apple has never done. Cook said that there's competition to attract developers just like there's competition to attract customers, likening the battle for developers to a "street fight for marketshare."

There's competition for developers just like there's a competition for customers. And so competition for developers, they can write their apps for Android, or Windows, or Xbox, or PlayStation. We have fierce competition at the developer side and the customer side. Essentially, it's so competitive I'd describe it as a street fight for market share in the smartphone business.

Cook also said that Apple does not retaliate or bully app developers who do not agree to Apple's ‌App Store‌ rules. "It's strongly against company culture," said Cook.

The antitrust hearing is ongoing, and can be watched live over on YouTube. The antitrust subcommittee is also questioning Facebook CEO Mark Zuckerberg, Google/Alphabet CEO Sundar Pichai, and Amazon CEO Jeff Bezos. Most of the questions so far have been for Pichai and Zuckerberg, but we'll share additional details on anything else notable Cook has to say.

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Top Rated Comments

ouimetnick Avatar
52 months ago
I can’t watch the livestream while at work but I’ve been reading some of the questions. I’d like to know why these politicians are wasting everyone’s time asking stupid questions? They should bring in people who understand how these companies operate to ask questions, not people with the same level of understanding as my 70 year old parents. ?
Score: 25 Votes (Like | Disagree)
aaronhead14 Avatar
52 months ago
As a consumer, all I want is for my experience on the iPhone to not feel crippled. But right now, with Apple effectively blocking their competitors’ services from fully functioning on iOS, I’m unable to have a very good experience as a consumer.

Two examples that come to mind are: 1) The inability to purchase movies in the Vudu app. 2) The inability to purchase eBooks in the Kindle app.

Apple prefers you buy movies from iTunes/AppleTV, and eBooks from iBooks. So they intentionally cripple the competition.

This is not only hostile to developers, but hostile to consumers.

Android is not affected by either of these issues. Both of those apps are fully functional on Android.

Apple, please do what’s best for consumers. Stop crippling apps.
Score: 17 Votes (Like | Disagree)
triangletechie Avatar
52 months ago
Jim Jordan is such a clown.
Score: 14 Votes (Like | Disagree)
Stevez67 Avatar
52 months ago

Nobody suggested Apple should sell products that wouldn’t make them money. Not sure where you got that idea from. Apple should simply take a reasonable fee, rather than an outrageous one. Apple is clearly the problem here. These apps work perfectly on other platforms. iOS is the only platform where they are crippled.
Apple is charging fees similar to other vendors. And frankly, in retail in general, a 30% markup is not outrageous.
Score: 12 Votes (Like | Disagree)
GadgetBen Avatar
52 months ago
Honestly, some of these congress questions are ridiculous and ill-informed.

They need an education in business and technology.
Score: 12 Votes (Like | Disagree)
jent Avatar
52 months ago

He also said developers don’t pay for shelf space. Except for that 30%...
Another commenter referenced placement, or slotting fees, and I presume that's what Tim Cook was referring to. In the world of supermarkets, for example, there are complex contracts where the grocer charges the manufacturer for the right to shelf space. It can be a flat fee, a percentage of sales, or any combination of factors. I don't know very much about it but it's safe to assume Tim was basically saying "We're not like those stores where you have to specifically pay extra just to have your item up for display, and Apple only takes a cut when you sell." Another parallel would be Costco, where apparently they offer very difficult negotiations for the right to sell your products at their store, but with the high volume most sellers are happy. That said, Apple offers the same 70% of sales to all developers, so the treatment is the same across the board.
Score: 12 Votes (Like | Disagree)