As per the company’s 2021 annual meeting for shareholders and proxy statement, Apple antitrust risks are included in the discussion with the audit committee and board members. For the first time, Apple has shown concern over several antitrust accusations and investigations against the company.
Throughout 2020, Apple faced several antitrust challenges, globally. Mainly because of its App Store policies and practices, developers like Epic Games, Spotify, Facebook have strongly and publicly criticized Apple for creating a “monopoly” by the arbitrary implementation of its 30% commission rate rule. And working to limit the power and to deter anti-competitive practices of four big tech companies, legislators launched an investigation against Apple, Facebook, Amazon, and Google.
Apple antitrust risks included in 2021 proxy statement
Last year in July, Apple CEO, Tim Cook testified at the U.S Antitrust hearing with the U.S House Judiciary subcommittee investigating the anticompetitive behavior of the aforementioned Silicon Vally tech giants. Although Cook was able to satisfactorily explain the company’s acquisition practice, was not convincing in supporting that App Store policies are equally applied for all developers.
Leaked emails of a deal with Amazon CEO, Jeff Bezos to bring Prime Video on iOS and Apple TV revealed that Apple cut the 30% commission by half and this evidence weakens the company’s position. Concluding its investigation, the subcommittee ruled that top the U.S tech giants have established “kinds of monopolies like the era of oil barons and railroad tycoons.”
Therefore, in addition to data privacy and security, business conduct and compliance and tax, the agenda of the audit committee in the 2021 annual meeting of shareholders and proxy statement included discussion on Apple anti-trust risks;
The Audit Committee and Board regularly review and discuss with management Apple’s antitrust risks. Apple’s Antitrust Compliance Officer is responsible for the development, review, and execution of Apple’s Antitrust Compliance Program and regularly reports to the Audit Committee. These reports cover, among other matters, the alignment of the program with Apple’s potential antitrust risks, and the effectiveness of the program’s design in detecting and preventing antitrust issues and promoting compliance with laws and Apple policies. (pg. 17-18)
Recently, major U.S publishers joined the Coalition for App Fairness (CAF); quoting the Amazon Prime Video deal, the organization claims that Apple favors some developers over others and treats them unequally. During the COVID-19 pandemic, Facebook launched a social media campaign against the iPhone maker claiming that the company was harming small businesses by charging ‘Apple Tax‘.
To appease growing Apple antitrust dissent, the company launched a new App Store Small Business Program which will charge 15% App Store commission from developers who earn equal to or less than 1 million annually.