Microsoft President Brad Smith called Thursday for greater antitrust scrutiny of the app stores run by rivals like Apple and Google, suggesting they have made it too difficult for small developers to build applications for their smartphones and other devices without agreeing to onerous rules.
"I do believe the time has come, whether we're talking about Washington, D.C., or Brussels, for a much more focused conversation about the nature of app stores, the rules that are being put in place, the prices and the tolls that are being extracted and whether there is really a justification in antitrust law for everything that has been created," Smith said during a POLITICO Live interview.
While he did not explicitly mention Apple and Google, the two companies whose operating systems run on almost all smartphones, Smith expressly criticized several practices true of their platforms.
Apple and Google both take a sizable cut of app sales and subscriptions through their platforms, and Apple in particular offers few ways to reach customers without going through its app store. Those practices have long been decried by certain app developers and they have now begun attracting the attention of antitrust officials on both sides of the Atlantic.
On Tuesday, Europe's primary competition authority opened a probe into Apple focusing on the company's App Store. The investigation was sparked by complaints from Spotify and Rakuten's Kobo that Apple illegally ties access to the App Store — the only method for iPhone and iPad users to download apps — with its payment system, which charges a blanket 30 percent. State attorneys general, who last year opened antitrust probes into Google and Facebook, have also spoken to Spotify about its concerns, a senior executive said this week.
"If you look at the industry today, I think what you'll find is increasingly you're seeing app stores that have created higher walls and far more formidable gates ... than anything that existed in the industry 20 years ago," Smith said.
The Clinton administration slapped Microsoft with an antitrust lawsuit in the 1990s amid criticism that it used its control over the Windows operating system to disadvantage competing software developers. After a lengthy court battle, Microsoft agreed to some restrictions on how it does business.
Smith noted that Windows permits developers to distribute apps through multiple stores or directly to consumers.
"Contrast that with what we're seeing in terms of other app store practices," Smith said. "They impose requirements that increasingly say there's only one way to get onto our platform, and that is to go through the gate that we ourselves have created. In some cases, they create a very high price or toll."
Leah Nylen contributed to this report.
