As Apple CEO Tim Cook prepares to speak in front of the United States House Judiciary Antitrust Subcommittee tomorrow, his opening statement was made available. [PDF]
Cook will say that Apple “does not have a dominant market share” in any market in which it operates, and that consumers have many other options when it comes to smartphones. “As much as we believe the iPhone provides the best user experience, we know that it is far from being the only option available to consumers,” says Cook’s testimony.
The smartphone market is fiercely competitive and companies like Samsung, LG, Huawei and Google have created very successful smartphone businesses that offer different approaches.
Apple does not have a dominant market share in any market where we do business. That’s not just true for iPhone; It is true for any product category.
Cook “will not compromise on the facts” and plans to dispute claims that Apple is anti-competitive. Apple’s app store, Cook says, has opened the “widest door” for developers, and the fees charged provide access to Apple’s APIs and other benefits.
I am here today because the scrutiny is reasonable and appropriate. We approach this process with respect and humility. But we do not compromise on the facts.
After starting with 500 applications, today the App Store houses more than 1.7 million, of which only 60 are Apple software. Clearly, if Apple is a gatekeeper, what we’ve done is open the widest gate. We want to get all the applications that we can in the Store, not keep them away.
As for the high app store fees, Cook will argue that Apple’s 15-30 percent cut is competitive with alternatives, and that Apple offers a better option than what was available to software developers prior to the launch of the ppApp Store in 2008.
The developers of the App Store set their app prices and never pay for “shelf space”. Apple continually improves and provides each developer with cutting-edge tools such as compilers, programming languages, operating systems, frameworks, and over 150,000 essential software components called APIs. These are not only powerful, they are so simple to use that elementary school students can and do create applications.
The App Store pa guidelines ensure a high quality, reliable and secure user experience. They are transparent and apply equally to developers of all sizes and in all categories. They are not in stone. Rather, they have changed as the world has changed, and we work with developers to apply them fairly.
Cook plans to explain that Apple has not increased commissions or added fees since the App Store debuted, and has, in fact, reduced fees for added subscriptions and waivers for certain categories of apps.
For the vast majority of apps in the App Store, developers keep 100% of the money they earn. The only applications that are subject to a commission are those in which the developer acquires a customer on an Apple device and where the features or services would be experienced and consumed on an Apple device.
Apple’s commissions are comparable to or less than the commissions charged by most of our competitors. And they’re far less than the 50 to 70 percent that software developers paid to distribute their work before launching the launchedApp Store.
The antitrust hearing will begin tomorrow at 12:00 p.m. M., Eastern Time, with live broadcast. It will also feature testimony from Facebook CEO Mark Zuckerberg, Amazon CEO Jeff Bezos and Google / Alphabet CEO Sundar Pichai. Cook’s full statement can be read here.
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