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Elon Musk And Biden Agree On Something After All: Apple, Google's Tax On Apps Are No-Go

Benzinga logo Benzinga 2/3/2023 Shivdeep Dhaliwal
© Provided by Benzinga

The Joe Biden administration is echoing the sentiments of Tesla CEO Elon Musk when it comes to the practice of imposing a 30% “tax” on mobile applications by Apple Inc (NASDAQ: AAPL) and rival Google owned by Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG).

What Happened: The Department of Commerce’s National Telecommunications and Information Administration (NTIA) said in a report Wednesday that the existing mobile app store model is “​​harmful to consumers and developers.”

The report noted that Apple and Google “dictate how the vast majority of the world’s apps exist and function.”

“These companies manage their app ecosystems differently, but they both play a significant gatekeeping role by controlling (and restricting) how apps are distributed.”

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In May, Musk, who now owns Twitter, bashed Apple and said the Cupertino, California-based tech giant’s app store fee is like having a “30% tax on the Internet.”

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Why It Matters: NTIA said its review suggests that the mobile app store model has “created conditions of competition that are suboptimal.”

“The policies that Apple and Google have in place in their own mobile app stores have created unnecessary barriers and costs for app developers, ranging from fees for access to functional restrictions that favor some apps over others.”

Musk had supported “Fortnite” publisher Epic Games' stand against Apple’s imposition of a 30% fee on in-app purchases earlier.

Currently, Musk’s Twitter charges $8 a month or $84 a year for its Twitter blue service. Those opting to purchase the same service through the iOS or Android app stores must pay $11 per month.

In November, Musk met with Cook and said they had “resolved their misunderstanding” after a “good conversation.” The misunderstanding Musk referred to was Twitter’s potential removal from Apple’s App Store.

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