SAN JOSE — Apple announced a host of new software features Monday that the company hopes will pull its customers deeper into its broadening array of gadgets and services.
But looming over the announcements, which came with polished presentations, high 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 high.
The Worldwide Developer Conference, as it is called, is usually a celebratory affair, and it was, at least inside the San Jose McEnery Convention Center. But as if to underscore the trouble the company is facing, Reuters reported during the company’s keynote address that the Justice Department is weighing an investigation into Apple for antitrust violations. And later Monday, House Democrats 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 percent 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 U.S. Supreme Court held that 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 business. Apple launched a website last week defending its 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 business at least in part around the Apple economy.
A $15 app called Duet Display, for instance, offers consumers the ability to share their desktop screen with an iPad. Apple announced that ability would now come free with its latest operating system. Apple also added a new menstrual cycle tracking service into its suite of health offerings, putting it in head-to-head competition with companies such as Clue. Even its new swiping keyboard, now included free, is something its developers have charged people for downloading on the App Store for years.
Ahead of 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 own competing product, called Screen Time. Apple says the apps violated its terms of service, and the developers asked Apple to offer a way to allow them to operate while still complying with the rules.
Andrew Armour, an IT consultant in Indianapolis who helped organize the Screen Time group, described putting tens of thousands of dollars into developing his app, ACTIVATE Fitness, only to see it blocked from the App Store. The way Armour sees it, Apple blocked the app, which allows parents to limit screen time for their kids based on their physical activity, because it competes with Apple’s own Screen Time app. “We just want fair play,” he said in an interview Friday.
Another developer in the group, Eduardo Cruz, chief executive of Qustodio, also joined the group of developers after filing a complaint with competition authorities in the European Commission. His app, another parental-control app, operated for five years on Apple’s App Store before it was prevented from using Apple’s mobile device management software, which allowed parents to monitor their kids’ app usage. “Apple is entering services and apps by directly competing with other app developers,” he said.
On Monday afternoon, Josep Gaspar, the chief technology officer of Qustodio, said he spotted changes in Apple’s App Store Review Guidelines that seem to suggest Apple relented. The new guidelines said that “in limited cases,” mobile device management could be used for parental-control apps. “We need to evaluate the real effect of this update to their guidelines, but it looks very promising,” Gaspar said.
Apple’s blocking of parental-control apps was detailed in an April New York Times article.
Even former Apple higher-ups are scrutinizing their former employer. The group of developers was encouraged by former Apple executive Tony Fadell, who for years led the company’s iPod division. Armour said Fadell inspired him to create the group and read through the final proposal, commenting that it looked great and was exactly what he had envisioned. And Apple’s former head of App Store approvals, Phillip Shoemaker, said in an interview with Bloomberg News last week that he worried about the risk Apple could face from antitrust regulators with regard to its App Store.
Apple’s antitrust scrutiny isn’t limited to the United States. In March, the music streaming service Spotify filed a complaint with the European Commission, claiming Apple was using its position as “a player and referee to deliberately disadvantage other app developers,” Spotify co-founder Daniel Ek said in a blog post. Ek complained about Apple’s 30 percent fee, which resulted in Spotify removing the ability to subscribe to Spotify directly within the Spotify app.
He said Apple retaliated by locking Spotify out of other Apple products, such as Apple Watch, HomePod and Siri.
“Consumers win and our industry thrives when we’re able to challenge each other on fair footing,” Ek wrote in the blog post.
Apple is also facing new questions about how well the iPhone protects its users from third-party trackers. A Washington Post article last week revealed how apps installed through Apple’s App Store send a slew of data to third-party tracking sites without the knowledge or permission of iPhone users, in opposition to Apple’s stance on privacy.
On Monday, Apple’s vice president for software engineering, Craig Federighi, announced a handful of new privacy features in iOS, including the ability to allow third-party apps to gather location information only once. That feature was aimed at people who grant apps permission to track them and then forget about them, sending their location to the app for no reason. The company also said it would block the ability for third parties to track iPhone users’ WiFi and Bluetooth signals. “We’re shutting the door on that abuse,” Federighi said.
A new sign-in feature allows Apple users to log into third-party apps and websites with Apple credentials. That feature competes directly with offerings from Google and Facebook. Apple said its version, however, protects user privacy.
While signing in to other apps or websites, Apple’s new service can create a unique, randomly generated email address specific to that sign-on. Emails to that address will forward to a person’s real address, and if those emails get too spammy, the person can simply cut it off, Apple said.
Apple also announced a security camera service that is included in its iCloud storage plans, putting it in competition with Nest and Ring, both of which charge monthly fees for a similar service. Users with some home security cameras can have the footage stored on Apple’s servers in an encrypted format, so that Apple itself cannot see the video, the company said.
Apple’s privacy announcements were reminiscent of recent events held by two tech rivals, Google and Facebook, which made big pronouncements about privacy at their developer conferences this spring.
As part of Apple’s strategy to rejigger its apps to generate more revenue from services, Apple shut down iTunes, the music and movie service that helped catapult Apple’s brand two decades ago with the launch of the iPod. In large part, iTunes has been replaced by all of Apple’s new stand-alone services, such as its Music and Movies apps, rendering iTunes irrelevant. The company is replacing the functions of iTunes on desktop computers with Apple Music, Apple TV and podcast apps.