Apple Could Face An Antitrust Investigation In China

Apple may soon find itself in hot water with Chinese regulators over its App Store policies. According to a recent report, it suggests that China is considering launching an antitrust investigation into Apple. This investigation will look into the company’s App Store fees as well as the restrictions Apple puts on third-party app stores and payment methods.

Apple’s 30% cut

Apple’s 30% commission on app sales and in-app purchases is at the heart of the issue. Apple’s App Store policies have faced controversy before. Some of you might recall that Apple and Epic got into a lawsuit over similar issues. It is also why some services, such as Netflix and Spotify, have removed the option to subscribe to their services through their apps.

Instead, customers will have to set up their own subscriptions via their websites. This is done so that these services can skirt around the 30% cut. According to the report, Chinese regulators believe that Apple is charging “unreasonably high fees” for local developers. They also believe that this move limits competition and could lead to higher prices for consumers.

Another concern is Apple’s walled garden approach. Unlike Android, Apple does not permit third-party app stores, at least not for most parts of the world. Recent changes to EU law forced Apple to allow third-party app stores for iOS users. However, this change only affects users in the EU while nothing has changed for the rest of the world.

This forces local Chinese developers to rely solely on Apple’s payment system and its App Store, which subjects them to the 30% cut. The report suggests that Apple could be given a chance to make the necessary changes. If they don’t, the Chinese government will launch a formal investigation.

Apple’s Relationship with China

China is quite strict, especially when it comes to foreign companies. But despite that, Apple has enjoyed a strong relationship with China. Given China’s vast population, it is a key market for Apple. It also accounts for a significant share of its iPhone sales. Additionally, Apple has manufacturing partnerships with various Chinese companies like Foxconn, which is responsible for assembling various Apple products like the iPhone.

Unlike many of its Western counterparts, the company has flourished in the Chinese market. However, this investigation could end up straining the relationship. Apple has historically strongly resisted change, even when it comes to local laws and regulations.

We’ve seen the company protest the various changes the EU has demanded of tech companies. This includes allowing third-party app stores, alternative payment methods, and the forced implementation of USB-C as a new charging standard. However, Apple has been relatively quiet over changes in the Chinese market.

For instance, when China passed a law requiring the removal of unapproved VPNs, Apple was more than happy to oblige. The company also restricted access to certain content in accordance with China’s censorship laws