Their businesses have gone virtual. Then Apple wanted a cut.
Lawmakers set to grill Tim Cook, chief executive of Apple, as well as its counterpart of Amazon, Facebook and Google, in a hearing Wednesday as part of a year-long antitrust investigation. They are studying how Apple exercises control over its App Store and companies like Class Pass and Airbnb who do business there.
After Airbnb and ClassPass started selling virtual courses because of the pandemic, they say Apple tried to collect its commission on sales. But Apple said it’s not trying to generate revenue – although that’s a side effect – but instead is trying to enforce a rule in place since its app guidelines were first released in 2010.
Jack Nicas and David McCabe explain the importance of the fight:
Apple’s disputes with small businesses show the control the world’s biggest tech companies have had over the pandemic’s transition to life online. While much of the rest of the economy is struggling, the pandemic has further boosted their business.
With millions more employees working from home, Amazon and Google are selling more online cloud space, as revenue from Amazon Web Services and Google Cloud skyrocketed in the first quarter of the year that included the start of the pandemic. Facebook and YouTube, which is part of Google, some of the internet’s biggest gathering places, saw an increase in traffic because people couldn’t socialize in person.
And Apple has generated more revenue from its online service business, mostly through its App Store, while its Macs, iPads and iPhones have become even more important tools.
Airbnb and ClassPass aren’t the only ones. Many companies and app developers are complaining that Apple is forcing them to pay its commission to be included in the App Store, which is crucial in reaching the roughly 900 million people with iPhones.