Economy

European Union opens competition investigation into Apple's App Store

European Union opens competition investigation into Apple's App Store”

Apple Inc.'s App Store facilitated sales of $519 billion past year, underscoring the influence of the digital marketplace on the global economy, according to a study supported by the company.

Commission EVP Margrethe Vestager, in charge of competition policy, says: "Mobile payment solutions are rapidly gaining acceptance among users of mobile devices, facilitating payments both online and in physical stores".

Although the study didn't cover a time period impacted by coronavirus, Apple notes that the global health crisis has changed how people interact with their devices.

However, the company said the estimates don't include revenue from its own app subscriptions like Apple Music.

The physical goods and services purchased included $268bn of general retail goods, $57bn of travel services, $40bn in ride-hailing purchases, $31bn of food deliveries and $14bn of groceries.

One investigation centres on iPad and iPhones being limited to installing apps from Apple's own App Store, among other restrictions imposed on third-party developers.

The largest USA technology companies are being investigated by antitrust regulators, and Apple has been criticized in recent years for exerting too much power over outside developers that rely on its App Store.

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There is often a lot of chatter about the 30% share that Apple gets from subscriptions and in-app purchase transactions done on the online platform, but of the $519 billion worth of business it created, Apple's combined share for the 30% cut was just %61 billion.

"We're committed to doing even more to support and nurture the global App Store community - from one-developer shops in almost every country to businesses that employ thousands of workers - as it continues to foster innovation, create jobs, and propel economic growth for the future", Cook said. Within this particular category, games was the largest generator of billings and sales.

The investigation follows complaints from music streaming service Spotify and an e-book distributor Rakuten Kobo on the impact of the App Store's rules on the competition.

The study found $45 billion (roughly Rs. 3.41 lakh crores) came from in-app advertising. The App Store launched in 2008 as a way of distributing applications and games to iPhone, and later iPad, users.

Apple is set to hold its annual Worldwide Developer Conference (WWDC) next Monday, with this year's event taking place virtually.

Apple is also under scrutiny in the USA where the House Judiciary Committee is reported to have asked for its chief executive Tim Cook to appear alongside other tech leaders to answer questions about anti-trust concerns.

The company has repeatedly said it is a "flourishing economy" that is helping millions of developers globally.



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