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  • Writer's pictureFlow Australia

Google and Apple hit back at anti-competition claims

Two of the world's largest companies have defended accusations their app stores are driving out competition with smaller developers.

Tech giants Google and Apple reject claims in-built app stores on their mobile phones are anti-competitive for developers.

Speaking at a parliamentary inquiry on Tuesday, Google's public policy director in Australia Lucinda Longcroft said the company had been facing sharp competition from other manufacturers such as Samsung and Huawei in their respective app stores on its phones.

Google had come under fire for charging a 30 per cent fee for companies on digital transactions made in apps, but Ms Longcroft said only larger companies were charged the fee.

"The vast majority of app developers in Australia, and globally, pay no fees. Ninety-seven per cent of all app developers pay no fees because they're not charging users," she told the inquiry.

"The only people that pay a fee of 30 per cent are those that make over $1 million Australian annually.

"Google's business model is unapologetically to support a wide app store and developer community."

The criticisms came in light of the developer of the video game Fortnite, Epic Games, launching legal proceedings against Apple and Google over the fees.

In its submission to the inquiry, the developer previously said the large market share of the tech companies had led to an anti-competitive environment.

But Ms Longcroft said smaller operators made up the bulk of the more than $600 million in value of app store developers in Australia.

"It is our business model to ensure that only the very largest developers pay any fee at all, and that they pay a fee which is competitive at the market level," she said.

"Our billing structure is one which serves the great majority of Australian users that families that are downloading safe and secure apps and have access to a vibrant app developer community here in Australia and globally."

The inquiry also heard from Apple's chief compliance officer Kyle Andeer, who rejected claims about its app stores being anti-competitive.

Mr Andeer said a similar fee structure for developers was in place for its products and that only bigger firms paid larger fees.

"A small handful pay that 30 per cent commission, the largest, most successful billion dollar developers like Epic Games ... every other developer is eligible for a commission that's at 15 per cent," he said.

He also hit back at claims that apps already pre-downloaded on devices such as iPhones made it less competitive for other apps providing similar services.

He said there was a large amount of competition for third-party apps within its store.

"Take music for example.

Spotify is the most successful music service in Australia by a three-to-one margin over Apple Music," Mr Andeer said.

"We see this play out over and over again because we use the App Store as an engine for competition.

"We have every incentive to offer our users as many different apps as possible, including apps that compete with us."


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