While the US is trying to ban TikTok and the new Trump administration is levying tariffs on Chinese goods that could see phone prices rise, especially those on prepaid brands like Motorola, China is introducing tit-for-tat measures.
It responded to the US-imposed tariffs with levies of its own, both on physical goods like American fossil fuels, farm equipment, and pickup trucks, as well as on more intangible assets like starting a monopoly probe into Google or Nvidia.
According to Bloomberg's sources, China is now preparing to hit none other than Apple with similar antitrust accusations stemming from an investigation it has been carrying out for a while. Apple's shares are already down on the news, as it includes probing its cash cow the App Store for unfair business practices.
Apple takes a big cut of the payments that go through its App Store, to the tune of up to 30%, and this practice have always been a point of contention between its marketing team and developers in the fight for the revenue from the app economy.
It insists that it provides the platform and the devices that developers otherwise wouldn't have had access to, while they argue that the cut is too much and the software and services department now takes a disproportionate share in Apple's revenues. The Chinese developers are no exception, and local giants like Tencent Holdings and ByteDance, the makers of TikTok, aren't please with the hundreds of millions they have to shell out to Apple for being present on its iPhones, as the App Store still holds about 20% market share there, and iPhones are usually bestsellers in China in the quarter they launch.
Apple sold half of the top 10 phones in China in Q3 | Image credit – Canalys
Tencent is one of the world's largest media companies, and certainly the largest video game conglomerate, and that is where the bulk of the money that comes in through the App Store originates from. Officials from China's State Administration for Market Regulation have already begun talks with Apple and developers for preliminary fundings about what they claim is an unfair amount of App Store commissions, and Tencent has been negotiating with it since last year, too.
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A local Chinese court already allowed a developer to sue Apple for the App Store fees, and officials could turn their probes into a full-scale investigation at any time, modeling their requests after the changes Apple was forced to employ in its European operations, where it opened the iPhone to third-party apps and payment methods.
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Daniel, a devoted tech writer at PhoneArena since 2010, has been engrossed in mobile technology since the Windows Mobile era. His expertise spans mobile hardware, software, and carrier networks, and he's keenly interested in the future of digital health, car connectivity, and 5G. Beyond his professional pursuits, Daniel finds balance in travel, reading, and exploring new tech innovations, while contemplating the ethical and privacy implications of our digital future.
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