Mark Zuckerberg called the iPhone maker's App Store a monopoly and a nuisance to customers citing the company's "stranglehold" on the online store
Mark Zuckerberg: Apple is charging "monopoly rents" with its "stranglehold" on the iPhone. The App Store "blocks innovation, blocks the competition".
Facebook CEO Mark Zuckerberg apparently had some harsh words for Apple at a recent company-wide meeting held online Thursday. Zuckerberg used the meeting as a way to criticize Apple's control over the iPhone and App Store. He called the iPhone maker's App Store a monopoly and a nuisance to customers while answering questions at the meeting, citing the company's "stranglehold" on the online store and claiming Apple charges "monopoly rents".
"Apple has this unique stranglehold as the custodian of what's on the phones," Zuckerberg told more than 50,000 employees via the webcast. He added that the giant's App Store in Cupertino, California, "blocks innovation, blocks competition" and "allows Apple to charge monopoly rents," the boss of the largest social network joked.
While Facebook's CEO denounced Apple's blocking of gaming-related applications, his comments came at a time when authorities are examining the two Silicon Valley giants for antitrust behavior. Last month, Zuckerberg and Apple CEO Tim Cook, along with Amazon and Google executives, testified at a House of Representatives hearing examining the potentially monopolistic practices of America's largest technology companies.
Earlier Thursday, Facebook revealed that Apple had blocked its plans to add a "transparency notice" informing users that Apple would receive a 30 percent commission on purchases made through a new feature of the Facebook application that allows companies to sell tickets to online events on the platform. After Apple told Facebook that the notification was "irrelevant information" and refused to waive its 30% commission, the social network was forced to delete the message from its application before Apple let the feature go.
The feature allows Facebook users to purchase tickets for online events directly through the application (in-app purchase). For this specific feature that allows people to purchase access via Facebook on iOS, the social network had initially requested that Apple waive its commission. The underlying idea is that these are online events to support small businesses experiencing difficulties due to the coronavirus crisis. This is also the reason why Facebook did not ask for a percentage of revenues.
Comments are also coming in as earlier this month, Apple also removed a feature from Facebook called "Instant Games from Facebook Gaming", an application that mainly allows people to watch other people play video games. "This is an innovation that could really improve people's lives," Zuckerberg said Thursday. "And Apple is opposed to it.
A change in Apple's iOS 14 operating system for the iPhone and iPads, which could make it much harder for companies like Facebook to target people using these devices with advertisements, was condemned by Zuckerberg. Facebook's CEO estimated that Facebook's ad targeting on iPhone and iPads would lose about 50% of its effectiveness once the iOS 14 is released and suggested that if Facebook could distribute its applications outside the App Store, it could avoid this kind of scenario.
Apple, which this month became the first U.S. company to be valued at $2 trillion, is facing charges of anti-competitive behavior worldwide because of the way it operates the App Store, the only way to buy and download applications on iPhone and iPads. In recent months, application developers such as Spotify and Rakuten have criticized the company for taking a 30% commission on every application purchase and for not allowing iPhone and iPad users to download applications outside the App Store to their devices. Apps like Hey were removed from the App Store for not offering an in-app subscription and paying a commission to the store.
The decision to block Epic's Unreal Engine was "just an extremely aggressive move"
Criticism of Apple came to a head earlier this month when the company banned Fortnite after Epic Games violated Apple's rules by trying to bypass the company's in-app payment system. In response, Epic filed a lawsuit against the company, and Apple threatened to revoke the accounts of the company's developers. This decision had repercussions beyond Fortnite, jeopardizing all software that used the Unreal engine, a platform owned by Epic and used by other developers to create video games.
The legal battle between Epic Games and Apple has also led to Fortnite now being split into "two different games. A final version will only be available to gamers on PlayStation 4, PC, Android, and Nintendo Switch, while those on iPhone, iPad, and Mac will be satisfied with the pre-August version. However, a California judge recently blocked Apple's decision to withdraw the game maker's access to its development tools.
In his speech to employees at the meeting, Zuckerberg said Apple's decision to block Unreal Engine was "just an extremely aggressive move" that was "quite problematic. But while Apple was the focus of Zuckerberg's speech, it wasn't the only topic that Facebook's CEO addressed at the meeting.
He also commented on a recent article in the Wall Street Journal, which reported that Zuckerberg had raised concerns about Chinese Internet companies threatening U.S. companies at a private dinner with President Donald Trump at the White House in October.
Shortly thereafter, the U.S. government launched a national security investigation into TikTok, owned by Bytedance, the most popular Chinese application used in the United States and one of Facebook's biggest competitors. Last month, Trump declared TikTok a "national emergency" and signed an executive order threatening to ban the application unless it was sold to a U.S. company. This week, TikTok sued Trump's administration. Mark Zuckerberg is believed to be at the root of tensions between Washington and Beijing over TikTok, according to the WSJ.
"Trump certainly mentioned China or some of the steps he was taking, but I don't think TikTok or anything like that was specifically mentioned," Zuckerberg told his staff on Thursday in response to the report.
At a general meeting earlier this month, Zuckerberg acknowledged that there were "valid" national security issues surrounding TikTok, BuzzFeed News reported but maintained that banning it would set a "very bad precedent in the long run" and that "this must be treated with the utmost care and seriousness, whatever the solution. He reiterated these views in his speech on Thursday.
Zuckerberg is also not the only boss of major U.S. technology companies who are weighing in on the state of today's mobile app stores. Last month, at a virtual event at Politico, Microsoft President Brad Smith recently called on regulators to take a closer look at how app stores are being managed.