Now we have had a chance to see the antitrust argument that Tim Cook will make in today’s hearing, and it essentially amounts to: There is nothing to see here.
Apple is arguing that it has done nothing wrong in the past, it is doing nothing wrong now, and it sees no need to change the way it works in the future …
Cook’s three-page statement (ok, three pages and one line) breaks down like this:
- We are proud of what we do and compete with other hardware companies.
- We are solid in privacy (go ask Facebook and Google about it)
- The development of the App Store was a good thing, and being goalkeepers is also a good thing.
- Google charges the same commission as us, so that’s fine.
- We have made some concessions along the way [aka: we need Netflix]
- Did I mention that we are proud of what we do?
Cook very specifically argues that while the scrutiny is appropriate, Apple believes that no change in its approach is necessary. Or rather, Apple should be the one to decide if, when, and how it should change something about the way it does business.
Some might argue that it is not surprising: Cook’s job is to defend Apple. But I don’t think it’s the best approach here.
Yes, Apple has come out of nowhere and has accomplished amazing things. Yes, it makes some great products. Yes, the App Store is one of the company’s greatest achievements, and it has absolutely enabled some people to achieve their dreams and others to live pleasantly. It’s something good.
But times change. The once new company is now a trillion dollar corporation. Where companies could ever make their own decision on whether or not to have an iPhone app, today it would be unthinkable to be on Android but not iOS. What was once considered perfectly reasonable now seems quite greedy.
Apple may win this antitrust argument in the short term. Of the four tech giants questioned today, Apple is probably less afraid. Congress doesn’t have the best track record when it comes to understanding technology, asking sharp questions, or creating sensible legislation in response. Cook’s approach to telling a good story and pinpointing the positives can see him come out more or less unscathed.
But this is not a single battle, it is a war.
Apple’s antitrust issues have made headlines again this week, not just once, but twice.
First, there were the two additional European Union antitrust investigations, which are just the latest in a long line of investigations into Apple’s alleged anti-competitive behavior. As a non-exhaustive list, there is Congress, the Department of Justice, several US states, the EU, France, Japan, South Korea, and Russia. A new antitrust probe is now imminent.
Given the cultural differences, my expectation is that Europe is more likely to take action against Apple’s business practices rather than the US But I do believe that, first in Europe and then in the US, Apple will be forced to change.
The company’s focus at every stage seems to be to do the absolute minimum that it can get away with. Are companies making too much noise about Apple taking a full 30% commission every time an app user renews a subscription? Reluctantly, he agrees to reduce it to 15%. Does a high-profile name make a big fuss about App Store policies? Finally, give developers the right to challenge them. Does Tile provide evidence of unequal treatment of Apple and third-party device tracking? Make a change to this eventually, but with a catch in the fine print. Are enough people complaining about being forced to use Apple’s default apps? Finally, after users have been asking for it forever, make the smallest possible change that you can get away with: Mail and Safari only.
Each concession feels reluctant, and is made after literally years of complaints from developers or customers. Honestly, I think Apple would be much better off ripping the band-aid off once. Make big changes. Do them willingly and cheerfully. Make it good news. Don’t wait for lawmakers to force you to do it.
Tune in to the audience later today.
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