Elon Musk may be luring Apple into a fight with Republicans

Tim Cook walks in the paddock prior to the F1 US Grand Prix at Circuit of The Americas on October 23, 2022 in Austin, Texas.

Jared C Tilton | Getty Images

Last week, Twitter owner Elon Musk nudged Apple, the big bear of Silicon Valley, which controls app distribution to every iPhone.

Musk has targeted the iPhone maker on a number of issues, including its reduced Twitter ad spend and its 30 percent cut in all digital sales made through apps. He also accused Apple of threatening to pull the Twitter app from the App Store.

In a deleted tweet, Musk hinted that he was “going to war.” In another he asked when Apple hates freedom of speech. Over the weekend he considered doing it build your own smartphone.

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Apple has remained a sleeping bear in the face of Musk’s provocations. It hasn’t commented, nor has CEO Tim Cook, and while its staff for moderating app reviews talks to Twitter behind the scenes about questionable content, Apple hasn’t pulled the app. In fact, Twitter got an update through app review last week.

Twitter isn’t that important to Apple from a business standpoint. It’s just one of many apps on the App Store, and it’s not a huge moneymaker for Apple through in-app purchases.

But on Tuesday, Florida Governor Ron DeSantis and Ohio Senator-elect JD Vance, both Republicans, made comments about Apple’s situation that show how Musk was able to put Apple in a tight spot.

It could go like this:

  • Musk makes a change to Twitter to circumvent Apple’s 30 percent fees, e.g. B. by allowing users to plug their credit cards into the app to subscribe to Twitter Blue or other new features.
  • Apple is retiring the app for these violations.
  • Musk presents the dispute with Apple as an issue of free speech and content moderation, and Republican politicians agree.
  • Apple becomes embroiled in a nationwide debate about free speech and monopoly centered on its App Store.
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How things might develop

On Tuesday, DeSantis said at a press conference that if Apple shut down Twitter, it would show that Apple has monopoly power and that Congress should look into it. DeSantis framed it as a free speech issue — many conservatives believe that social networks, including Twitter, generally discriminate against conservative viewpoints.

“You also hear reports that Apple is threatening to remove Twitter from the App Store because Elon Musk is actually opening it up to free speech and is restoring many accounts that have been wrongfully and unlawfully banned for posting accurate information about Covid ‘ DeSantis said.

“If Apple responded by banning them from the App Store, I think that would be a huge mistake, and it would be a really crude exercise of monopolistic power,” he continued.

Vance formulated the situation similarly in a tweet, He said that if Apple were to withdraw Twitter, “it would be the crudest exercise of monopoly power in a century and no civilized country should allow it.”

In fact, Apple’s app reviews department is unlikely to pull Twitter over content. While Apple regularly bans apps for questionable content, they’re rarely big brand names like Twitter – they’re usually smaller, lesser-known apps. Apple’s rules for apps with significant user-generated content, such as Others, such as Twitter, focus less on specific types of infringing content and more on whether the app has a content filtering system or content moderation procedures in place. Twitter has both, although Musk’s recent cuts to Twitter could affect its ability to flag problematic posts.

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But Apple would be much more likely to retire the Twitter app if Twitter tries to exempt Apple from its platform fees.

It’s happened before. In 2020, Fortnite added a system to its iPhone app that allowed users to buy in-game coins directly from Epic Games, saving the 30% of sales Apple normally makes. Apple removed Fortnite from the App Store that same day. The episode sparked a legal battle that Apple won in most cases but is currently on appeal.

Google is making a similar cut for Android apps sold through its Play Store, but it’s also allowing other Android app stores and allowing people to download apps straight to their phones, while Apple has an exclusive lockdown for the overall distribution of iPhone apps.

Musk has good business reasons for picking this fight.

In particular, Musk wants Twitter to make a lot more money from direct subscriptions rather than advertising. But Apple’s 30 percent cut in in-app purchases is a major hurdle for a company cutting costs and carrying a significant debt burden.

Here’s how Musk could pull a step at Epic Games and allow for direct billing, spurring Apple to action while shaping the free speech debate. If that happened, as DeSantis suggested, maybe Congress would start asking questions. Apple would become football in political debates. Managers could be forced to testify or provide written answers.

At the very least, lawmakers like Vance would use the words “monopoly” and “Apple.” in the same sentence. That’s a risk for Apple’s brand. Debate on these issues could reignite upcoming regulations like the Open Markets Act, which threatens its control of the App Store and its substantial profits.

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The last time Apple retired an app popular with conservatives for its lack of content moderation was Parler in January 2021. It was reinstated in April.

Meanwhile, Apple faced official inquiries from Republican Sens. Ken Buck and Mike Lee as to why Parler was removed from the App Store. Cook appeared on Fox News to defend the company’s decision.

Twitter is a much more important and well-known social network than Parler and would attract more attention.

For Apple, keeping Twitter on the platform is probably most valuable. The controversial iPhone maker probably wants this whole Elon Musk narrative to go away.

In fact, it could go like this: Apple is silent, working behind the scenes with Twitter on its app, and Musk tweeting about the 30% cut when it annoys him. Nothing really changes.

But Musk is unpredictable, and if he really wants to “go to war” over 30% fees, Apple could be in a tough spot.

Apple and Twitter did not immediately respond to requests for comment.