House antitrust committee ready to subpoena Apple CEO Tim Cook for big tech investigation

Posted:
in General Discussion edited July 2020
Apple CEO Tim Cook will be served a subpoena to testify in front of the U.S. House Judiciary Committee if he refuses to willingly participate in an ongoing antitrust probe, the investigation's leader said on Friday.




Rep. David Cicilline (D-RI), chair of the House's antitrust panel, in an interview with Bloomberg said he expects executives from Apple, Amazon, Google and Facebook will volunteer testimony in the ongoing antitrust probe after their presence was requested in formal letters sent out last week.

Facebook CEO Mark Zuckerberg and Google CEO Sundar Pichai committed to appear before lawmakers in letters to the committee this week, though their involvement is conditioned on testimony from other executives involved in the inquiry, The Washington Post reported on Tuesday. Amazon CEO Jeff Bezos signaled intent to testify on Monday, while Apple has not yet agreed to make Cook available.

While Cicilline believes all four executives will offer testimony on their own volition, he said the committee will issue subpoenas to obtain the information it needs to come to a decision. Bezos, for example, was previously threatened with a subpoena before Amazon communicated a willingness to participate.

"We are going to get the documents and the witnesses we need to complete the investigation," Cicilline said on Friday in reference to Cook's testimony. "It is my hope that that will happen voluntarily, but it has always been the intention of the committee that if it does not happen voluntarily, that we will rely on compulsory process to do so."

The House Antitrust Subcommittee announced a bipartisan investigation into "platform gatekeepers" and "dominant" tech firms last year. Apple is being scrutinized for its App Store business, so-called "Sherlocking" of third-party apps and systematic removal of parental control apps, among other issues.

Controversy over App Store policies came to a head this week when Apple rejected updates to Basecamp's new Hey email app on the basis that the software failed to include an option for in-app purchases. Basecamp founders David Heinemeier Hansson and Jason Fried subsequently spoke out against the decision on Twitter, in interviews and a via blog post posted to Hey's website.

Cicilline, who appeared alongside Heinemeier Hansson in an episode of The Vergecast podcast this week, called Apple's App Store fees "highway robbery." That sentiment was echoed in today's interview.

"This is very concerning that the use of the App Store, you know developers who are startups, are basically being forced to pay a ransom of 30% or they are denied access to that marketplace," he said. "And, you know, it's just coincidentally that Google and Apple arrive at the same thing, a third of the profit. [] And so for a developer, it puts them in the position of either you pay them the ransom or you go out of business or your app is not a success. That's a perfect example of an abuse of your market power to bully and exact unfair profits."

For its part, Apple says App Store guidelines are in place to cultivate a consistent consumer experience, not to generate excess profit. Critics, including some developers, view the Hey debacle as Apple chasing its customary 15% to 30% cut of App Store transactions.

"I get why there's a question here, but that's not what we're doing," Apple SVP of Worldwide Marketing Phil Schiller told TechCrunch on Thursday, adding that policies like in-app purchase requirements are designed to foster customer satisfaction.

Fried in a blog post today countered Apple by arguing in-app purchase restrictions hurt customer relations by erecting a false barrier between app makers and their users.

Despite the kerfuffle, Apple is not considering a rule change or exemption for Hey, Schiller said. Whether that stance will soften in the coming days remains to be seen. Apple is slated to host its annual Worldwide Developers Conference next week, a gathering often viewed as a celebration of the tech giant's relationship with third-party developers.
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Comments

  • Reply 1 of 27
    sdw2001sdw2001 Posts: 17,895member
    Apple and a bunch of the big tech companies are going to have a problem. To me, there is clear evidence of anti-trust issues amongst Apple, Facebook, Twitter and others. Let’s obviously not forget Google. It has nothing to do with politics. This isn’t even about censorship online. I support apple and think they are a great company. But their practices with their App Store are questionable. Google has a massive problem and I think it’s going to be the next standard oil. 
    cornchipprismaticslkruppjohnbearelijahg
  • Reply 2 of 27
    mrochestermrochester Posts: 700member
    For google and Facebook, split the advertising business away from the other businesses. For amazon split the marketplace away from their own shop and for Apple split the AppStore away from iOS. 
    prismaticslkrupp
  • Reply 3 of 27
    This is more nonsense.  The US has a very odd way of being the land of the free and allowing entrepreneurs to flourish. When a business has grown, through its own efforts and imagination to make something world class, different and new, it apparently needs to be broken up.  If app. makers want to create apps which work on a particularly platform, obviously, it needs to pay for that.  If you don’t like the terms, do it sign up for it: you know the cost in advance.  Using a platform gives the app. usability, after all. It can also give the app. huge coverage.  If you rent a property for commercial use, you don’t expect the rent to go down if your business is successful.  The same applies to the other companies here.  In Google’s case, without its size it wouldn’t work as a search engine and Facebook wouldn’t work as a worldwide operation.  Amazon is the odd one out here but again it’s success is of its own making.  Amazon does destroy other businesses, often by undercutting the competition which the others do not do, but Amazon has been successful because of its fantastic service.  All these companies do use tax avoidance measures and cheap labour to keep costs down but that is the American way.
    lkruppleavingthebiggurahara
  • Reply 4 of 27
    ‘Do’ in the fourth line should, of course, read ‘don’t’.
  • Reply 5 of 27
    Rayz2016Rayz2016 Posts: 6,957member
    ‘Do’ in the fourth line should, of course, read ‘don’t’.
    Just curious. Why didn’t you just edit it?


  • Reply 6 of 27
    rerollreroll Posts: 60member
    This is Europe and the competition going for a money grab! Oh... wrong article...
    prismaticsurahara
  • Reply 7 of 27
    prismaticsprismatics Posts: 164member
    reroll said:
    This is Europe and the competition going for a money grab! Oh... wrong article...
    :smile: 

    Somehow those dear guests you refer to are not showing up to our party...
    edited June 2020
  • Reply 8 of 27
    9secondkox29secondkox2 Posts: 1,394member
    Narcissist politicians: 

    ”whats this? Someone found a way to build a platform that people actually WANT to buy into with confidence and security? 

    And they take a percentage of sales from people who use said platform to make themselves money too? And they actually enforce rules to ensure the quality of their clientele experience? 

    what is this capitalism you speak of? Down with it! Down I say. The mere existence of the App Store heralds to end of the earth in 12 years I tell you.”

    “But Walmart, Amazon, and Barnes and noble can do the same thing. After all, they don’t make as much money.”

    must suck to actually be successful in America these days. 
  • Reply 9 of 27
    One of the things that makes the Hey complaint so flimsy is that they're selling their product on Windows, Linux, Mac, and Android as well. That makes it obvious that there is a sales related reason for wanting to be on the App Store, despite the fact that they're now trying to claim "it isn't about money" and more about a one-on-one customer service. They've already got one-on-one customer service on those four other platforms. So if the App Store really provides a significant sales incentive, how can you then claim it's detrimental to consumers in the form of antitrust? It doesn't really make any sense. 
  • Reply 10 of 27
    9secondkox29secondkox2 Posts: 1,394member
    If the App Store is separated from Apple, the security goes down. 

    No one wants that. 

    I do believe that a user should be able to install apps not approved by Apple. Thst is at the users risk. 

    But the App Store itself should not be tampered with. 

    Just the app availability to come from elsewhere should be added. 

    Apple may decide to condor someone’s app they don’t agree with. That doesn’t mean everyone feels thst way. And they should still be able to engage with who they want, how they want - regardless of device. 
  • Reply 11 of 27
    uraharaurahara Posts: 664member
    For google and Facebook, split the advertising business away from the other businesses. For amazon split the marketplace away from their own shop and for Apple split the AppStore away from iOS. 
    I am curious, what other business Google has a part from advertisement, and why should they split it. 
    gatorguy
  • Reply 12 of 27
    lkrupplkrupp Posts: 10,038member
    For google and Facebook, split the advertising business away from the other businesses. For amazon split the marketplace away from their own shop and for Apple split the AppStore away from iOS. 
    In the case of Google their entire business is advertising. If that is split off how will all the free stuff survive? All the Google docs apps will become subscription based. YouTube will Be a subscription service. ALL of the free Google things will vanish overnight. Would that make you happy?

    As for the App Store who, exactly, would manage it? How much would it be allowed to charge developers for access? Who pays for it all? 
    edited June 2020
  • Reply 13 of 27
    SpamSandwichSpamSandwich Posts: 33,407member
    sdw2001 said:
    Apple and a bunch of the big tech companies are going to have a problem. To me, there is clear evidence of anti-trust issues amongst Apple, Facebook, Twitter and others. Let’s obviously not forget Google. It has nothing to do with politics. This isn’t even about censorship online. I support apple and think they are a great company. But their practices with their App Store are questionable. Google has a massive problem and I think it’s going to be the next standard oil. 
    I consider all anti-monopoly and antitrust legislation bullshit. Markets ultimately determine winners and losers, not alleged attempts to control markets.
    dewmeredraider11
  • Reply 14 of 27
    johnbearjohnbear Posts: 160member
    30% is just ridiculous. 3%would be reasonable 
  • Reply 15 of 27
    johnbear said:
    30% is just ridiculous. 3%would be reasonable 
    Obviously, you don’t know the staffing and infrastructure costs associated with running a platform. Also, profiting for your shareholders must be considered lest they dump you and you go out of business...
  • Reply 16 of 27
    SpamSandwichSpamSandwich Posts: 33,407member
    johnbear said:
    30% is just ridiculous. 3%would be reasonable 
    What are you basing this ridiculous number on?
  • Reply 17 of 27
    anantksundaramanantksundaram Posts: 20,356member
    johnbear said:
    30% is just ridiculous. 3%would be reasonable 
    Why not 0.3%?
    muthuk_vanalingamSpamSandwich
  • Reply 18 of 27
    fred1fred1 Posts: 985member
    I love his use of the word “ransom” in referring to the 30% fee Apple takes. Just like the “ransom” I pay AirBnB or Uber or Lyft or . . . to use their services? Or any store I buy something from?  Or any place where I eat? Who hosts/displays/markets anything for free, either online or in a physical presence?  Does he really not understand what that fee goes towards?  Apparently he has no idea. 
  • Reply 19 of 27
    elijahgelijahg Posts: 2,634member
    What I don't understand with these antitrust issues, is there are numerous things each company can do to go some way to appeasing the regulators and keeping the antitrust eyes off of them. Yes, that may cost a tiny amount of revenue (which is apparently more important than the goodwill of the public), but they absolutely refuse; even if the gamble could result in massive fines, being broken up or otherwise. Obviously they can't just bend over when every accusation comes along or they'd just be a cash machine for lawyers/governments, but even when there's pretty clear evidence some of the actions/rules could be anticompetitive, they refuse to change. This is something that pisses me off about Cook's Apple. He and his execs are incredibly stubborn, usually to the detriment of the users, at the protection of their profit margins and seemingly more often than not nowadays protection of "innovation" that's actually a step backwards to many users.
    edited June 2020
  • Reply 20 of 27
    elijahgelijahg Posts: 2,634member
    sdw2001 said:
    Apple and a bunch of the big tech companies are going to have a problem. To me, there is clear evidence of anti-trust issues amongst Apple, Facebook, Twitter and others. Let’s obviously not forget Google. It has nothing to do with politics. This isn’t even about censorship online. I support apple and think they are a great company. But their practices with their App Store are questionable. Google has a massive problem and I think it’s going to be the next standard oil. 
    I consider all anti-monopoly and antitrust legislation bullshit. Markets ultimately determine winners and losers, not alleged attempts to control markets.
    So it was just fine for Microsoft in the 90's to intentionally break APIs that Netscape were using so they could have a chokehold over the internet, and therefore push out every other competitor in favour of Windows?
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