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Apple's growing power a concern for regulators, lawyers
San Jose, California
APPLE announced a host of new software features on Monday that the company hopes will pull its customers deeper into its increasingly limitless array of gadgets and services.
But looming over the announcements, which came with polished presentations, big-budget video vignettes and cheers from thousands of adoring app developers in the audience, was an onslaught of scrutiny from lawmakers, regulators and plaintiffs' lawyers concerned with whether Apple's growing power is stifling competition and keeping prices from falling.
The Worldwide Developer Conference, as it's called, is usually a celebratory affair, and it was, at least inside the San Jose Convention Center. But as if to underscore the trouble the company is facing, Reuters reported during the keynote address that the US Department of Justice is considering an investigation into Apple for antitrust violations.
And later on Monday, Democrats in the US House of Representatives announced a sweeping antitrust probe aimed at tech companies, including Apple. Antitrust concerns have already been raised over the way Apple runs its app store, which Apple touts to developers at its conference. Critics say the 30 per cent cut Apple collects on all revenue earned by developers on the store is unreasonably high and leads to higher consumer prices. App developers have also complained that Apple competes unfairly with apps that offer services similar to Apple's.
Last month, the US Supreme Court said consumers were free to sue Apple for alleged antitrust violations in its app store, which could prompt a wave of legal challenges to the way Apple handles its app store business. Apple launched a website last week to defend its app store policies and said it welcomes competition.
On Monday, Apple showed no signs of backing off its expansion into services that are offered by third parties within the app store. At least a dozen of its announcements could offer serious threats to companies that have built businesses at least in part around the Apple economy.
A US$15 app called Duet Display, for instance, offers consumers the ability to share their desktop screen with an iPad. Apple said that option would now come for free with its latest operating system.
Apple also added a new menstrual cycle tracking service to its suite of health offerings, putting it in head-to-head competition with companies such as Clue. Even its new swiping keyboard, now included for free, is something its developers have charged people for downloading on the app store for years.
Before Apple's event, a group of app developers said Apple is not competing fairly. On Friday, some developers that offer parental control services banded together, saying Apple unfairly kicked them out of the app store to make room for Apple's competing product called Screen Time. Apple says the apps violated its terms of service, and the developers asked the company to offer a way to allow them to operate while still complying with the rules.
Andrew Armour, an IT consultant in Indianapolis who helped organise the Screen Time group, described putting tens of thousands of dollars into developing his app, Activate Fitness, before it was blocked from the app store. BLOOMBERG