Microsoft Takes Swipe at Apple in Adopting App Store ‘Fairness’ Principles

Microsoft joined the chorus of critics of Apple’s App Store policies, with the software giant announcing that it was adopting 10 principles “to promote choice, ensure fairness and promote innovation” in its own digital storefront for Windows.

Microsoft said the principles, which will apply to the Microsoft Store in Windows 10, build on “the ideas and work” of the Coalition for App Fairness, the organization launched last month by companies that have had longstanding beefs with Apple’s App Store including Spotify, Epic Games, Match Group, Deezer and Tile.

While it didn’t specifically call out Apple, Microsoft has raised “concerns about app stores on other digital platforms,” Rima Alaily, Microsoft VP and deputy general counsel, wrote in a blog post Thursday.

“Windows 10 is an open platform. Unlike some other popular digital platforms, developers are free to choose how they distribute their apps,” she wrote. “We and others have raised questions and, at times, expressed concerns about app stores on other digital platforms.”

However, Microsoft is not applying the app-store principles to its Xbox store. That’s because game consoles “are specialized devices optimized for a particular use,” according to Alaily. “Console makers such as Microsoft invest significantly in developing dedicated console hardware but sell them below cost or at very low margins to create a market that game developers and publishers can benefit from. Given these fundamental differences in the significance of the platform and the business model, we have more work to do to establish the right set of principles for game consoles.”

The launch of the Coalition of App Fairness came after Epic, creator of the popular “Fortnite” game, sued Apple over the tech company’s mandated 30% fee for in-app purchases and Apple’s refusal to allow Epic to offer its own payment mechanism. Apple banned “Fortnite” from the App Store because of Epic’s attempt to avoid paying the 30% revenue cut.

Facebook also has complained about Apple’s App Store. Last month, Apple agreed to a three-month moratorium on collecting in-app fees for paid live events purchased through Facebook’s iOS app — but will resume taking the 30% cut in 2021. Facebook says it won’t take a cut of creators or businesses’ revenue for livestreaming events until at least August 2021, citing economic hardships inflicted by the COVD pandemic.

Apple has defended its App Store policies, claiming it applies them in the same way to all developers (something its critics dispute).

“The App Store provides a great business opportunity for all developers, who use it to reach half a billion visitors each week across 175 countries,” Apple said in a recent statement. “To ensure every developer can create and grow a successful business, Apple maintains a clear, consistent set of guidelines that apply equally to everyone.”

Among Microsoft’s 10 app store principles, the company said it will give developers the freedom to choose whether to distribute their apps for Windows through the Microsoft app store or competing app stores on Windows. Alaily noted that third-party app stores, such as those from Steam and Epic, are available for Windows and “offer developers different pricing (or revenue share) options, standards, requirements and features.”

In addition, the Microsoft Store “will charge reasonable fees that reflect the competition we face from other app stores on Windows and will not force a developer to sell within its app anything it doesn’t want to sell.” Microsoft also says it will not use any “non-public information or data from its app store about a developer’s app to compete with it.”

U.S. lawmakers also have weighed in on Apple’s App Store. On Tuesday, House Democrats issued a report summarizing findings and recommendations from its antitrust probe of four big tech companies: Apple, Amazon, Facebook and Google. The 449-page report called on Congress to enact new laws to curb the companies’ power, including prohibiting companies like Apple from operating “adjacent lines of business” (in other words, preventing it from offering its own apps in the App Store that compete with those from third parties).

“Apple’s monopoly power over app distribution on iPhones permits the App Store to generate supra-normal profits,” the House Judiciary Committee report said.

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