Apple's App Store appeals process would make 'Kafka blush,' entrepreneur tells Congress

Key Points

  • Technology executives said in a congressional hearing in Boulder, Colorado on Friday that Apple's App Store platform has too much power.
  • The hearing, which focused on big tech companies including Amazon, Google and Apple, also indicates that lawmakers continue to lump big technology antitrust concerns together.
  • For Apple, the entrepreneurs focused on Apple's App Store, which is the only way for most people to install software on an iPhone.

Apple CEO Tim Cook delivers the keynote address during a special event on September 10, 2019 in the Steve Jobs Theater on Apple's Cupertino, California campus.

Justin Sullivan | Getty Images

Technology executives said that Apple's App Store platform has too much power in a congressional hearing in Boulder, Colorado on Friday.

The hearing, held by the House Antitrust Subcommittee, is another signal that Washington lawmakers are increasingly scrutinizing big technology companies over power that might not always harm consumers, but can hurt smaller businesses.

The hearing, which focused onAmazon,Facebook, andGoogle, and at timesApple, also indicates that lawmakers continue to lump big technology antitrust concerns together, despite the fact that the companies operate different marketplaces and face different allegations of anti-competitive behavior.

Complaints about the App Store

For Apple, the entrepreneurs focused on Apple's App Store, which is the only way for most people to install software on an iPhone.

Basecamp founder David Heinemeier Hansson said that anyone who submits applications to the App Store is worried that Apple could reject their app, and that the company's system of appeals is difficult to navigate.

"All it takes is being assigned the wrong clerk," Hansson said. "Then you'll be stuck in an appeals process that would make Kafka blush."

Hanssen also criticized Apple's practice of taking 30% of total sales processed through the App Store as "outrageous" and said his company had designed its apps to avoid it.

"We created the App Store with two goals in mind: that it be a safe and trusted place for customers to discover and download apps, and a great business opportunity for all developers," Apple said. "We continually work with developers and take their feedback on how to help protect user privacy while also providing the tools developers need to make the best app experiences."

Apple employees review every single app and update that are distributed through the App Store, CNBC previously reported , and some reviewers said that the process and rejections can be arbitrary.

Developers who disagree with an App Review decision, which is made based on Apple's App Store guidelines , can appeal to a board called the App Review Board, CNBC reported, which can change a lower level reviewer's decision. It is partially composed of reviewers with good track records, people familiar with the processpreviously told CNBC.

Last year, Apple published published a new webpage that explains the principles that govern the App Store as well as the most common reasons for rejection.

Complaints from accessory-maker Tile

Tile also testified at the hearing. Tile sells small square-shaped products that can help you find lost belongings.

Tile's General Counsel, Kirsten Daru, alleged that Apple removed Tile's hardware products out of Apple stores after reports that Apple was planning a competitive product. Last year, Apple launched the "Find My" app, which tracks MacBooks and other lost Apple products.

Daru said Apple didn't give Tile access to hardware features in the iPhone that Apple uses for its own products. Tile says it was prevented from getting that access because of Apple's claims to focus on privacy.

"Apple is acting as a gatekeeper to applications and technologies in a way that favors its own interests," Daru said.

Apple answered those complaints in an email to CNBC.

"Apple builds its hardware, software and system level apps to protect user privacy and provide the best products and ecosystem in the world," an Apple spokesperson told CNBC. "Apple has not built a business model around knowing a customer's location or the location of their device," the company said, noting they can use the Find My app to locate lost Apple products. "Customers have control over their location data, including the location of their device. If a user doesn't want to enable these features, there's a clear, easy to understand setting where they can choose exactly which location services they want enabled or disabled."

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