Elon Musk takes on Apple's power, setting up a clash

“What’s going on here @tim_cook?” Elon Musk tweeted on Monday to Tim Cook, the CEO of Apple, igniting a spat between the world’s richest man and the world’s most valuable public company.

In a series of tweets over 15 minutes, Musk, the new owner of Twitter, accused Apple of threatening to withhold Twitter from its App Store, a move that would limit some new users from downloading the app. The action would amount to censorship, Musk said, with no explanation from Apple for why Twitter would be blocked. He added that Apple had also reduced its advertising spending on Twitter.

“Apple has mostly stopped advertising on Twitter. Do they hate free speech in America?” Musk wrote on Monday.

With his tweets, Musk set the stage for a power struggle with Cook, who holds immense influence over other tech companies through Apple’s dominance. Musk has a vested interest now in Apple’s clout because of his ownership of Twitter, which he bought last month for $44 billion. Twitter is distributed through Apple’s App Store and is used by iPhone and iPad owners around the world. In one tweet, Musk implied he was ready for “war” with Apple.

Musk has been poised to confront Apple since taking over Twitter. His business plan is predicated on shifting its revenue from a dependence on advertising to a greater reliance on subscription sales. But any new subscription revenue will be subject to Apple’s practice of taking as much as a 30 per cent cut.

Musk’s complaints also come at a pivotal time for Apple. There’s a push in Congress during the final months of the year to advance a series of antitrust laws. Among the bills under consideration is the Open App Markets Act, which seeks to give developers more control over their apps and allow them to skirt the fees that Apple and Google charge.

“Elon is the latest chapter in a push to make App Store fees lower, and this will resurrect a topic that’s been fairly quiet over the past six months,” said Gene Munster, managing partner of Loup Ventures, a technology research firm. He said he anticipated a future in which App Store fees were reduced to around 20 per cent.

Musk and a spokesperson for Apple did not respond to requests for comment.

Apple has increasingly faced a backlash from app developers, as well as pressure from regulators and politicians around the world, over its App Store policies. The App Store has become a prime gateway where billions of iPhone users download Twitter, Facebook, Snapchat, games and all sorts of other programs, making it an arbiter of software distribution.

Apple uses the fees that it collects from its App Store, which was created in 2008, to pay a staff of several hundred people who review each app that it distributes. The company has said its app reviewers protect customers’ privacy and security, as well as prevent them from being subjected to fraud.

Among the things that the reviewers vet is the use of Apple’s in-app payment system, which has helped the company collect an estimated $22 billion in fees annually from developers, according to Sensor Tower, a market research firm.

In 2019, Epic, the maker of the Fortnite video game, sued Apple for anti-competitive behaviour with its App Store. Last year, the judge in the case ruled largely in favor of Apple, finding that the company did protect the privacy and security of customers. But the judge also issued a ruling that would require Apple to allow developers to link customers to their own payment systems. Both Epic and Apple are appealing the case.

On Monday, Tim Sweeney, Epic’s CEO, lent his support to Musk on Twitter. Sweeney pointed out that Apple had kicked Epic out of the App Store when it similarly defied the tech giant’s policies. He questioned if Apple would boot every developer that complained about it, a list that now includes Meta’s Facebook, Spotify and Twitter.

“Apple blocked Fortnite within a few hours of Epic defying their policy,” Sweeney tweeted. “Would they nuke Twitter? Spotify? Facebook? Netflix? At what point does the whole rotten structure collapse?”

Apple has rankled app developers for other reasons. Last year, it made a series of tech changes to enhance people’s privacy on mobile apps. Those shifts made it harder for many apps to target mobile advertising to users, leading tech executives including Mark Zuckerberg, the CEO of Meta, which owns Instagram as well as Facebook, to speak out.

Apple has also required companies to create a “safe experience” for their apps to be listed in its App Store. After the Jan. 6 riot at the US Capitol last year, Apple blocked the “free speech” social network Parler from appearing in its App Store until the service introduced guardrails to prevent calls for violence on the service.