Skip to main content

Apple's Rejection of Email App 'Hey' Draws Fresh Antitrust Scrutiny

House antitrust chair called App Store fees 'highway robbery' in recent  interview.
  • Author:
  • Publish date:

Apple's marketplace practices are under renewed scrutiny this week after the App Store rejected an email app, provoking a public outcry from the app's founders. 

The app, called Hey, launched on Monday and offers a premium email service for $99 per year. An initial version was approved, but its founders wrote on Twitter that an updated version of the iOS app was rejected by Apple because it didn't offer the subscription as an in-app purchase, instead directing users to its own website to sign up. The app's founders appealed the decision, but Apple undefined denied the appeal. 

For paid apps and in-app purchases, such as subscriptions, Apple extracts a cut of up to 30% from developers. 

That policy has drawn rebukes from developers who say the fees are excessive and unfair. And it's attracted legal and antitrust scrutiny from critics accusing Apple of abusing its dominant position to charge high fees. 

Last year, the Supreme Court ruled that antitrust lawsuits against Apple on the basis of its App Store practices can move forward; shortly after that decision, it was sued by two developers accusing Apple of anticompetitive conduct. 

Antitrust scrutiny of Apple gained steam earlier this week in Europe, with the EU's antitrust regulator announcing two separate investigations of Apple's terms, conditions and other measures relating to the App Store and Apple Pay. The EU investigations follow an earlier complaint by Spotify SPOT over Apple's restrictive terms on streaming. 

“Apple sets the rules for the distribution of apps to users of iPhones and iPads,” said the EU's competition commissioner Margrethe Vestager  in a statement. “It appears that Apple obtained a 'gatekeeper' role when it comes to the distribution of apps and content to users of Apple’s popular devices.”

Along with fellow tech giants Amazon  (AMZN) - Get Free Report, Alphabet  (GOOGL) - Get Free Report and Facebook  (FB) - Get Free Report, Apple is facing antitrust investigations in the U.S. as well from a coalition of agencies.

In an interview with The Verge this week, Rep. David Cicilline (D-RI), chair of the House of Representatives' antitrust committee, likened Apple's fees to "bullying" and "highway robbery." 

"Many people have come forward to share their experiences, who are terrified of economic retaliation, who are afraid they can’t survive the economic retaliation that these large platforms can impose because of the power that they have, and we intend to pursue those allegations very seriously,” said Cicilline in the interview. “This is a direct consequence of enormous market power, the fact that Apple is the gatekeeper for these developers, and we have heard many, many examples.”  

Cicilline and other House members are preparing an antitrust hearing for later this summer, and Alphabet, Amazon and Facebook have signaled a willingness to send their respective CEOs to testify, provided that others also appear. 

Apple has not agreed to make CEO Tim Cook available for the hearing, according to Politico.