U.S. senators question Apple and Google on app store dominance

WASHINGTON (Reuters) -A panel of U.S. Senators questioned officials from Apple Inc and Alphabet Inc's Google on Wednesday about the dominance of their mobile app stores and whether the companies abuse their power at the expense of smaller competitors.

Amy Klobuchar, the top Senate Democrat on antitrust issues, said Apple and Google can use their power to "exclude or suppress apps that compete with their own products" and "charge excessive fees that affect competition in the app store economy."

The hearing came a day after Apple said it would begin selling AirTags - which can be attached to items like car keys to help users find them when they are lost - in direct competition with Tile, which has sold a similar tracking device for more than a decade.

Before the hearing, Klobuchar told Reuters Apple's announcement was the kind of conduct that her panel planned to discuss at the hearing.

Apple said its AirTags were an outgrowth of its "FindMy" app, which is used for locating lost Apple devices and to share user locations and was introduced in 2010, before Tile's founding. Apple last month opened its operating system up to third-party item trackers and said that Chipolo, a startup that competes with both Tile and Apple's new AirTags, is using the system.

Apple's chief compliance officer, Kyle Andeer, testified at the hearing as well as Kirsten Daru, general counsel for Tile.

Tile's Daru testified Apple's FindMy program is installed by default as part of its operating system on all Apple phones, and cannot be deleted.

"Apple has once again exploited its market power and dominance to condition our customers’ access to data on effectively breaking our user experience and directing our users to FindMy," she said.

Others on the witness list are Google Government Affairs Senior Director Wilson White, Spotify <SPOT.N> Chief Legal Officer Horacio Gutierrez and Match Group <MTCH.O> Chief Legal Officer Jared Sine.

App makers like music streaming service Spotify and dating service firm Match, which owns the Tinder app, have long complained that mandatory revenue sharing and strict inclusion rules set by Apple's App Store for iPhones and iPads, along with Google's Play store for Android devices, amount to anticompetitive behavior.

In his testimony, Match's Sine argued that Google and Apple both exact an onerous 30% of any digital transaction, raising prices for consumers.

Match pays nearly $500 million in fees to the app store annually, the company's single largest expense, Sine said.

(Reporting by Diane Bartz, Stephen Nellis and Paresh Dave; Editing by Steve Orlofsky and Marguerita Choy)

04/21/2021 20:23

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