Elon Musk Takes On Apple’s Power, Setting Up a Clash

 

Elon Musk Takes On Apple’s Power, Setting Up a Clash

 

In a series of tweets on Monday, Mr. Musk accused Apple of threatening to pull Twitter from its App Store and of trying to censor.

 

By Kate Conger and Tripp Mickle

Nov. 28, 2022

https://www.nytimes.com/2022/11/28/technology/elon-musk-apple-twitter.html

 

SAN FRANCISCO — “What’s going on here @tim_cook?” Elon Musk tweeted on Monday to Tim Cook, the chief executive 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, Mr. 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, Mr. 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.

 

With his tweets, Mr. Musk set the stage for a power struggle with Mr. Cook, who holds immense influence over other tech companies through Apple’s dominance. Mr. 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, Mr. Musk implied he was ready for “war” with Apple.

 

Mr. 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 percent cut.

 

Mr. 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 percent.

 

A swift overhaul. Elon Musk has moved quickly to revamp Twitter since he completed his $44 billion buyout of the social media company in October, warning of a bleak financial picture and a need for new products. Here’s a look at some of the changes so far:

 

Going private. As part of Mr. Musk’s acquisition of Twitter, he is delisting the company’s stock and taking it out of the hands of public shareholders. Making Twitter a private company gives Mr. Musk some advantages, including not having to make quarterly financial disclosures. Private companies are also subject to less regulatory scrutiny.

 

Layoffs. Just over a week after closing the deal, Mr. Musk eliminated nearly half of Twitter’s work force, or about 3,700 jobs. The layoffs hit many divisions across the company, including the engineering and machine learning units, the teams that manage content moderation, and the sales and advertising departments.

 

Verification subscriptions. Twitter began charging customers $7.99 a month to receive a coveted verification check mark on their profiles. But the subscription service was paused after some users exploited it to create havoc on the platform by pretending to be high-profile brands and sending disruptive tweets.

 

Content moderation. Shortly after closing the deal to buy Twitter, Mr. Musk said that the company would form a content moderation council to decide what kinds of posts to keep up and what to take down. But advertisers have paused their spending on Twitter over fears that Mr. Musk will loosen content rules on the platform.

 

Other possible changes. As Mr. Musk and his advisers look for ways to generate more revenue at the company, they are said to have discussed adding paid direct messages, which would let users send private messages to high-profile users. The company has also filed registration paperwork to pave the way for it to process payments.

 

Mr. Musk and a spokesman 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 anticompetitive behavior 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 chief executive officer, lent his support to Mr. Musk on Twitter. Mr. 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,” Mr. 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 chief executive 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 U.S. 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.

 

“In my time at Twitter, representatives of the app stores regularly raised concerns about content available on our platform,” Yoel Roth, Twitter’s former head of trust and safety, wrote in an editorial in The New York Times this month. Mr. Roth said App Store reviewers had raised concerns about pornography and racial slurs on Twitter.

 

 

Mr. Musk’s purchase of Twitter has upended the relative harmony between it and Apple. As an outspoken user of the platform, with nearly 120 million followers, Mr. Musk has often used Twitter to needle business rivals like Bill Gates or Sam Bankman-Fried. His spat with Mr. Cook could become “a revolution against online censorship in America,” Mr. Musk tweeted on Monday.

 

Last week, Mr. Musk also mused about building his own phone if Apple and Google booted Twitter from their app stores. “I certainly hope it does not come to that, but, yes, if there is no other choice, I will make an alternative phone,” he tweeted.

 

Apple has urged Mr. Musk to preserve the status quo. In an interview with “CBS Mornings” this month, Mr. Cook was asked whether there was a risk that Twitter could be removed from the App Store. He said Twitter would continue to be distributed and praised its commitment to moderate abusive content.

 

“I don’t think anyone wants hate speech on their platform, so I’m counting on them to continue to do that,” Mr. Cook said.

 

Phil Schiller, a longtime Apple executive who helps oversee its App Store, recently deleted his Twitter account when Mr. Musk reinstated former President Donald J. Trump to the platform. Mr. Cook continues to use Twitter and used it last week to wish his followers a happy Thanksgiving.

 

Mr. Musk’s attacks on Apple’s leadership could create challenges for the tech giant “in Congress, where Big Tech is still a target,” Mr. Munster of Loup Ventures said. Republicans in Congress have embraced Mr. Musk’s purchase of Twitter because he has promised to restore free speech, an issue that they speak about often. Mr. Musk resonates with that group, which is ascendant in Washington, Mr. Munster said.

 

In September, Mr. Cook met with Republican congressional leaders, including Representative Kevin McCarthy of California, and discussed the importance of free speech online, two people familiar with those conversations said. Because Apple doesn’t have social media platforms, it has so far largely avoided being dragged into that debate.

 

Kate Conger is a technology reporter in the San Francisco bureau, where she covers the gig economy and social media. @kateconger

 

Tripp Mickle covers technology from San Francisco, including Apple and other companies. Previously, he spent eight years at The Wall Street Journal reporting on Apple, Google, bourbon and beer. @trippmickle