Home Markets Apple and Elon Musk’s Twitter are on a collision course

Apple and Elon Musk’s Twitter are on a collision course

by SuperiorInvest

SpaceX Chief Engineer Elon Musk attends a joint news conference with T-Mobile CEO Mike Sievert (not pictured) at SpaceX’s star base in Brownsville, Texas, U.S., on August 25, 2022.

Addresses Latif | Reuters

Elon Musk has announced big, if confusing, plans for Twitter since taking over the social network last month.

Musk wants to significantly increase the company’s revenue does through subscription while also opening up the site to more “free speech,” which in some cases appears to mean reinstating previously banned accounts like the one owned by former President Donald Trump.

But Musk’s plans for Twitter could put it at odds with two of the biggest tech companies: Apple and Google.

The tension is building

One of the biggest risks to Musk’s vision “Twitter 2.0” is a possibility that his changes violate Apple or Google app rules in a way that slows down the company or even bootstraps its software from app stores.

The tension is already rising. In a tweet last week, Musk complained about app store fees that Google and Apple charge companies like Twitter.

“App store fees are apparently too high due to the iOS/Android duopoly,” Musk wrote on Twitter. “It’s a hidden 30% internet tax.” In a subsequent post, he labeled the Justice Department’s antitrust division, which it allegedly is examining the rules of the app store.

His complaint concerns the 15% to 30% cut that Apple and Google take from in-app purchases, which could eat up desperately needed revenue from Musk’s $8-a-month Twitter Blue subscription plans.

Over the weekend, Phil Schiller, Apple’s former head of marketing who still oversees the App Store, apparently deleted his widely followed Twitter account with hundreds of thousands of followers.

Phil Schiller, senior vice president of worldwide marketing for Apple Inc., speaks at an Apple event at the Steve Jobs Theater at Apple Park on September 12, 2018 in Cupertino, California.

Justin Sullivan | Getty Images

There are indications that Twitter has already seen an increase in malicious content since Musk took control, putting the company’s apps at risk. In October, shortly after Musk became “Chief Twit,” a wave of online trolls and bigots flooded the web with hate speech and racist slurs.

Trolls organized on 4chan and then took to Twitter with anti-black and anti-Jewish epithets. Twitter has suspended many accounts, he said the non-profit Network Contagion Research Institute.

Musk’s plan to offer paid blue verification badges has also led to chaos and accounts impersonating major corporations and figures, causing some advertisers to shun the social network, most notably Eli Lilly after a fake verified tweet mistakenly claimed insulin would be provided free of charge.

App stores have taken notice.

“And when I left the company, the app review team calls had already started,” former Twitter head of trust and security Yoel Roth he wrote in the New York Times this month.

Subscription Fees and Revenue

Twitter and Apple have been partners for years. In 2011, Apple deeply integrated tweets into its iOS operating system. Tweets that act as official company communications are regularly posted under the account of Apple CEO Tim Cook. Apple has been advertising the new iPhones and their grand opening events on Twitter.

However, it appears that this relationship may change as Musk begins to generate more of his revenue from subscriptions.

Twitter reported revenue of $5.08 billion in 2021. If half of them will come from subscriptions in the future, as Musk said said the targethundreds of millions of dollars would end up going to Apple and Google — a small amount for them, but a potentially massive hit for Twitter.

One of Apple’s main rules is that digital content—game coins or avatar clothing or premium subscriptions—that is purchased in an iPhone app must use Apple’s in-app purchase mechanism, in which Apple charges the user directly. Apple takes 30% of sales, after a year it drops to 15% for subscriptions, and developers pay the rest.

Companies like Epic Games, Spotifyand Match group lobby against Apple and Google’s rules as part of the Coalition for App Fairness. Microsoft and Target also have filed briefs in court criticized the system and did public remarks aimed at app stores.

One option for Musk is to take a similar approach to what Spotify did: Offer a lower price of $9.99 on the web, where Apple doesn’t even get a cut, and then users simply sign in to their existing account inside the app. Users who sign up for Premium within the iPhone app will pay $12.99, effectively covering Apple’s fees.

Or Twitter could go even further, like Netflix, which completely stopped offering subscriptions through Apple in 2018.

Musk could sell Twitter Blue on the company’s website at a cheaper price and tweet to his more than 118 million followers that Blue is only available on Twitter.com. It could work, and it could help Apple get rid of any charges.

But that also means Twitter would have to remove many options for informing users about subscriptions inside the app, where they’re most likely to make a purchase decision. And Apple has detailed rules about what apps can reference when telling users about alternative payment methods.

As the Netflix app says, “You can’t sign in to Netflix in the app. We know this is a problem.”

Content moderation power struggle

Tim Cook, chief executive of Apple Inc., speaks during the Apple Worldwide Developers Conference (WWDC) in San Jose, California, U.S., Monday, June 4, 2018.

David Paul Morris | Bloomberg | Getty Images

Musk is up against the power of Apple and Google and their ability to refuse to approve or even take down apps that violate their rules on content moderation and harmful content.

It’s already happened. Apple said in letter to Congress last year that it removed over 30,000 apps from its store in 2020 due to objectionable content.

If Twitter were to experience issues related to the app store, it could be “catastrophic,” according to former Twitter head of trust and security Roth. Twitter cites app reviews as a risk factor in SEC filings, he noted.

Apple and Google can remove apps for a variety of reasons, such as security issues with the app and compliance with the platform’s billing rules. And app reviews can delay release schedules and cause confusion whenever Musk wants to launch new features.

In the past few years, app stores have begun to more closely scrutinize user-generated content that begins to cross over into violent speech or social networks that lack content moderation.

There is precedent for a total ban. Apple and Google banned The Parlor, a much smaller and conservative-leaning site, in 2020 after posts on the site promoted the Jan. 6 riots at the U.S. Capitol and contained calls for violence. In Apple’s case, the decision to ban high-profile apps is made by a group called the Executive Review Board, which is led by Schiller — an Apple executive who deleted his Twitter account over the weekend.

Although Apple approved Truth Social, Trump’s social networking app, in February, it took longer for Google Play to approve it. The company told CNBC in August that the social network lacks “effective systems for moderating user-generated content” and therefore violates the Google Play Store terms of service. Google finally approved the app in October, saying that the app must “remove objectionable posts, such as those that incite violence.”

Musk allegedly fired many moderators of Twitter contact content this month.

Apple and Google have been careful to ban apps like Parlor, pointing to specific violations of the guidelines, such as screenshots of offensive posts, rather than citing broad policy reasons or pressure from lawmakers. On a social network as big as Twitter, it’s often possible to find content that hasn’t been flagged yet.

Still, it’s unlikely that Apple and Google want to get into an uphill battle over what constitutes malicious information and what doesn’t. This could spark public scrutiny and political debate. It’s possible that app stores are simply delaying approval of new versions rather than threatening to remove apps altogether.

Future features could also rouse Apple and Google and prompt a closer look at the platform’s current operations.

Musk has reportedly talked about allowing users to pay for user-generated videos — something former employees believe could be used for adult content. The Washington Post.

Apple’s App Store has never allowed pornography, a policy that dates back to company founder Steve Jobs, and Google also bans apps with sexual content.

Anything that is not safe for work must be hidden by default. Twitter currently allows adult content, which could put it even more in the reviewers’ crosshairs.

“Apps with user-generated content or services that are ultimately used primarily for pornographic content … do not belong in the App Store and may be removed without notice,” Apple’s guidelines say.

But Musk often runs to battles, not away from them. Now they have to decide whether it’s worth taking over two of Silicon Valley’s most valuable and powerful companies over 30% fees and Twitter’s ability to host snarky tweets.

An Apple representative did not respond to a request for comment. A Google representative declined to comment. Twitter did not respond to an email and the company no longer has a communications department. Musk did not respond to any of the tweets.

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