Apple's big motive for fighting a new antitrust law - Yahoo Finance
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Wednesday, April 13, 2022
Apple has a better motivation than privacy to fight antitrust reform
Apple (AAPL) CEO Tim Cook made his most public declaration this week against proposed antitrust legislation aimed at the company’s App Store. Cook claims that allowing customers to download apps onto their iPhones from third-party sources would make them less safe.
“If we are forced to let unvetted apps on the iPhone, the unintended consequences will be profound,” Cook said during a gathering of the International Association of Privacy Professionals on Tuesday.
Cook is right that the App Store helps protect users from malware, and third-party options would open up iPhone users to the increased risk of downloading scammy apps. However, the Apple chief has a bigger reason to protest the legislation: Apple’s bottom line.
That’s because if users download apps outside of the App Store, Apple would lose out on the 30% fee it collects on many app sales. Apple doesn’t break out revenue for its App Store, but its services division, which includes the App Store, brought in $68 billion of the company’s total $365 billion in revenue in 2021. Since 2008, the App Store raked in $260 billion.
“Maintaining central control is immensely profitable for Apple — it is the mechanism that allows Apple to set prices for users on both sides of its platform, app developers and consumers,” Penn State Law professor John Lopatka told Yahoo Finance. “And maintaining central control inevitably injures competitors.”
Apple’s App Store keeps users safe
Cook contends the proposed antitrust legislation, called the Open App Markets Act, would make users less safe by removing Apple’s ability to vet every app users install on their devices.
And he’s right.
Without the App Store, users would be able to download and install apps from any third-party app store or site of their choosing. While that gives users more freedom, it also opens them up to the potential for downloading apps loaded with malware that could steal their information, scoop up their login credentials, or capture their banking data.
Of course, Apple’s App Store doesn’t keep you completely safe. According to a 2021 report by , 2% of the App Store’s 1,000 top grossing apps on one day were scam apps.
Apple, of course, benefits from user data, as well. The company’s Safari browser uses Google as its default search engine, which nets Apple between $8 billion and $12 billion a year, . Google, naturally, uses information gleaned from users’ searches to inform its advertising business.
That, developers say, forces them to raise prices, which hurts them and their customers. Spotify (), Epic, and a slew of other developers have battled this for years. With antitrust legislation finally making its way through Congress, it looks as though Apple may finally be forced to loosen its iron grip on the App Store.
source: https://finance.yahoo.com/news/apples-big-motive-for-fighting-a-new-antitrust-law-182600137.html
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