Apple (NASDAQ: AAPL) faces an increasing wall of difficulty as app developers unite in protest against the company's app-store fees, all while under intense scrutiny from the European Union, which has launched an antitrust investigation into the company's practices.
App developers are uniting in resistance to the policies of Apple's App Store, which developers claim are inhibitive and exploitive. Specifically, developers are voicing their support for a recently launched antitrust investigation being conducted by the European Commission. Video game developer Epic Games, best known for the ubiquitous Unreal Engine and the monumentally successful battle royale game Fortnite, has voiced its support for the investigation. Epic Games is joined by Match Group (NASDAQ: MTCH), the owner of several dating websites and apps, such as the extremely popular Tinder, as well as OkCupid, Hinge, and Match.com, among others.
"Apple is a partner, but also a dominant platform whose actions force the vast majority of consumers to pay more for third-party apps that Apple arbitrarily defines as 'digital services'" A spokesperson for Match Group said. "We welcome the opportunity to discuss this with Apple and create an equitable distribution of fees across the entire App Store, as well as with interested parties in the EU and in the U.S."
The chief complaint of developers is the egregious policies enforced by Apple for all companies that wish to make their app available for iOS, as well as the anticompetitive practices the company allegedly partakes in. For any developer wanting their app listed in the app store, they must agree to Apple taking 30% cut from all purchases, including in-app purchases.
Additionally, developers are concerned that Apple is using data gathered from the app store to create its own first-party apps to compete with third-party apps. To make matters worse, Apple deliberately locks out certain functions of its products to app developers, which means that any apps published by the company are capable of using said functions, giving Apple's apps an unfair advantage.
The antitrust investigation by the European Union is set to investigate these claims and more, with two investigations to run concurrently. The first investigation will look into potential anticompetitive practices, following up on complaints from developers such as Spotify (NYSE: SPOT) that allege Apple is hampering both revenues from app purchases as well as sales of third-party apps by offering competing services. The second investigation will investigate Apple's use of NFC technology and its rules regarding its use by app developers. Several companies have complained that Apple's refusal to allow any other form of contactless payment aside from Apple Pay constitutes an anticompetitive practice.