Apple Inc. Chief Executive Tim Cook warned Tuesday that the proposed antitrust law would have the unintended consequence of making iPhones less secure, putting users at risk of “data-hungry” companies that are bypassing its privacy features. .
The iPhone maker faces double threats to its App Store business from Congress and the European Union, with lawmakers trying to loosen their grip on the app economy and increase competition to make the iPhone more accessible to third-party developers. intend to.
Laws in both jurisdictions would force Apple to allow third-party programs to be downloaded to the iPhone outside of the company’s App Store, where it currently controls the offerings and takes up to 30% commission from in-app purchases. . Apple has said that this change will harm the security and privacy of the user.
“Removing the more secure option will leave users with fewer options — not more,” Cook said Tuesday during a speech at the International Association of Privacy Professionals’ summit in Washington, DC, “and when companies decide to leave the App Store.” Because they want to exploit user data, this could put significant pressure on people to connect to alternative app stores—app stores where their privacy and security cannot be protected.”
In Europe, the Digital Markets Act is moving towards final approval, while pieces of legislation are being considered in Congress and are far from becoming law.
“Apple believes in competition,” said Mr. Cook. “But if we are forced to let go of untested apps on the iPhone, the unintended consequences will be profound and we feel obligated to speak up and let policymakers act when we see those goals with us.” To pursue what I truly believe we share without diminishing privacy in the process.”
The issue of user privacy is a favorite topic of Mr Cook’s when he makes a rare public appearance, regularly calling it a “fundamental human right”. The company’s iPhone has been at the center of several battles over privacy in recent years.
Several high-profile tech companies operating in the app economy have raised the issue of how Apple does business, arguing the iPhone maker’s claims that its restrictive policies ensure user privacy and security are, in fact, its own. wrongly profiting their own business and harming them.
Facebook’s Meta Platforms Inc. And other companies that profit from online ads are unhappy with a change Apple made to its phone software last year that requires users to agree to have their online usage tracked by apps. Data has played a vital role in how the digital advertising market has worked, and as most users choose not to be tracked, it has cut off access and hindered some digital advertising businesses. Meta says the change is expected to see a $10 billion drop in sales this year.
It’s just the latest way in which Apple wields authority over third parties, amid widespread debate about the play power tech companies play in digital markets and political speech.
After years of lobbying for change by Spotify Technology SA and Match Group, lawmakers and regulators around the world are taking a strong interest in Apple.
Apple’s biggest blow to date came last September when a federal judge ordered the company to loosen its App Store rules. Under the order, Apple will be prevented from prohibiting developers from providing a link to an alternative payment method within their apps. Apple is appealing the decision.
That case was brought by “Fortnite” maker Epic Games Inc., which claimed that Apple had an unfair monopoly in controlling the distribution of apps on the iPhone and forcing it to use its in-app payment system. The judge dismissed nine of the 10 claims. Epic, too, is appealing this decision.
The high-profile case sheds light on the extent to which Apple profits from its App Store. Internal records released during testing show that roughly one in five dollars of Apple’s operating profit in 2020 came from its commissions on apps and most of that from videogames. Apple disputes those figures as being too high but has not provided its own numbers.
Mr Cook has focused on growing Apple’s services business, which includes the App Store, after years of sluggish growth among its phones, tablets and computers. But strong sales of devices during the pandemic by buyers working from home and studying has helped the company see record gains from hardware sales. Revenue from services grew more than 20% to $19.5 billion in the last three months of 2021 compared to the previous year.