Meta and Microsoft Sue Apple over App Store Opening Plans

Mar 21, 2024

Apple’s plan to open up its app store to outside payment options via an outside link is receiving strong opposition from various quarters. Meta Platform, Microsoft, and Match Group are the latest to ask a federal judge to reject the iPhone makers’ proposed plan for opening up its ecosystem.

Apple App Store Debacle

In their filing, the companies allege that using a third-party link does not comport with the letter or the spirit of the 2021 ruling.  In 2023, the company was found to violate antitrust laws by limiting developers’ ability to notify users about alternate payment systems that cost less.

Apple has always maintained a tight grip on the iOS ecosystem, partly because it also runs its own payment system. Apple Pay has always been the default payment service in the ecosystem, something that developers have always complained about costs more on fees. In addition, developers have always complained about how much revenue Apple squeezes them, depending on apps sold.

Apple operates one of the most lucrative app stores that rake in billions of dollars yearly on app sales and transaction fees. With app spending forecasted to reach highs of $207 billion by 2027, a lot is at stake, which explains  the lengths  Apple is willing to go to protect one of its most priced business empire

Last year, a federal judge ordered the company to open its iOS ecosystem and allow app developers to direct users to their payment systems. The companies are opposed to Apple’s plans to let third-party apps use an outside link to direct consumers where payments are to be processed

According to the companies, the new plan comes with stringent restrictions that go against the principle of fair competition.  Apple has already detailed dozens of requirements and limitations that developers must adhere to in order to include a purchase link within their apps. The iPhone maker has also reiterated its attempt to collect a 12% or 27% revenue share from all developers that opt out of the Apple system.

Google Monopoly

The fact that the tech giant is still attempting to collect 12% or 27% revenue share from developers could have gone better with developers. According to developers, Apple charges 27% tax on web transactions. Still, being forced to pay a fee of between 3% to 6% to a third-party payment process would make it impossible for them to offer lower costs to consumers.

Apple is not the only payment service provider that is a loggerhead with authorities and other companies. Alphabet’s Google is also facing its fair share of issues over allegations it wields monopoly power in its Android app store. While Google insists that its Android ecosystem is open source, the business deals that the company has entered with other companies have plunged it into trouble with authorities.

There has been growing concern that the Google Play store is enjoying an unwarranted edge regarding app downloads as it remains the favored access point for apps on Android devices. Late last year, a jury concluded that Apple wields a monopoly with the app store, a decision the company insists it will appeal.

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