Apple Is Facing Criticism for Anti-Competitive Practices

August 14, 2020
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Apple Inc. (NASDAQ: AAPL) isn’t the first tech company to be accused of anti-competitive practices, but some of its most recent decisions have drawn ire from both consumers and other tech companies.

Just this month, Apple has denied Microsoft’s Xbox game streaming service and has pulled one of the world’s most popular videogames from its platform.

Apple cites breach of terms, while the affected parties say that Apple is stifling competition and innovation.

Microsoft Condemn’s Apple’s Policies

Microsoft may be one of Apple’s biggest rivals, but it’s also a publisher of software on the popular App Store.

As a cloud and gaming service innovator, Microsoft was preparing to release its xCloud application on Apple’s ecosystem. xCloud allows Microsoft subscribers to stream games to their smartphones and other devices, eliminating the need for powerful and expensive dedicated hardware.

Apple won’t allow xCloud on its platform because it claims that individual games offered on the service can’t be reviewed and rated.

Microsoft had anticipated this, and released a statement to its customers, saying that “Our testing period for the Project xCloud preview app for iOS has expired. Unfortunately, we do not have a path to bring our vision of cloud gaming with Xbox Game Pass Ultimate to gamers on iOS via the Apple App Store.”

Microsoft claims that Apple’s strict policies aren’t aligned with industry norms, and states that “All games available in the Xbox Game Pass catalog are rated for content by independent industry ratings bodies such as the ESRB and regional equivalents.”

Apple controls its own subscription-based gaming platform, which has led some consumers and analysts to speculate that it simply doesn’t want competition from a more established videogame publisher and developer.

Fortnite Developer is Suing Apple

Apple is now under scrutiny for the second time this month, after pulling the Fortnite game from its platform. Fortnite is one of the world’s most popular games and a major revenue driver for its developer, Epic Games.

Epic offered discounts for in-app purchases, circumventing  App Store and its 30% commission fee. it claimed this to be a breach of its terms of service and removed the game.

Epic is now suing Apple in a California District Court, citing “illegal restraints.”

Apple Stock Down in After-Hours Trading

The stock dropped slightly in after-hours trading and was down -0.12% when the markets closed. Epic’s lawsuit and Microsoft’s condemnation might not have a major impact on stock in the short term, but the pending legal case could compel regulators to investigate what many believe to be monopolistic practices.

Long-term, this could result in hefty fines or even changes in the business structure of America’s most valuable company.

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