Elon Musk faces off with Apple before making peace

Elon Musk has been at odds with many different major players over the past few years and he has taken on a new contender in recent weeks. This time, technology giant Apple was in Musk’s crosshairs for a few days, before the two parties came to an agreement. 

Musk criticized Apple’s “secret 30-percent tax” on App Store purchases, after the tech company threatened to withhold Twitter from its App Store, as detailed in a report from Barron’s. In the first 10 months of this year, and prior to Musk’s acquisition, Apple spent around $39 million in advertising on Twitter — though it became one of the most recent companies to withdraw advertising from the platform, according to Musk.

Although Musk took aim at the App Store in some of his tweets criticizing Apple, it wasn’t his only target in the flurry of posts against the tech company. Musk said Apple had “mostly stopped advertising” on Twitter, going on to ask if the company hated free speech in America with CEO Tim Cook tagged. He also threatened to make his own phone if he needed to.

Apple has since “fully resumed” advertising on Twitter according to Musk (via Fortune), after the two had a meeting together which Musk said was a “good conversation.”

Musk also said that the meeting “resolved the misunderstanding about Twitter potentially being removed from the App Store,” adding that Cook was “clear that Apple never considered doing so.”

Apple prefers to call a “commission” or “fee,” Musk pointed out weeks ago Apple’s “secret 30-percent tax,” which requires companies and app developers to sell digital goods via an in-app payment system that collects up to 30 percent of purchases. Any company wanting to sell a service on an app from the App Store is subject to the fee.

Musk is not the first person to raise some of these concerns with Apple. Media companies Spotify and Epic Games have also sparred with Apple on issues relating to the App Store in the past.

Apple pulled Fortnite from its App Store after Epic Games created a workaround for the iOS payment system, resulting in a still-ongoing legal battle that resumed in November.

“Apple blocked Fortnite within a few hours of Epic defying their policy,” Epic Games CEO Tim Sweeney said on Twitter. “Would they nuke Twitter? Spotify? Facebook? Netflix? At what point does the whole rotten structure collapse?”

In any case, a social media app such as Twitter relies heavily on Apple’s App Store, and Wedbush analyst Dan Ives says that taking on the App Store would have been a huge undertaking for the Twitter head.

“Apple views Twitter as breadcrumbs, but ultimately Musk needs Apple and its App Store as the lifeline,” Ives said. “It’s noise for Apple, but for Musk this [was] not a smart battle in our opinion.”

In his continuing quest to turn Twitter into the “X” everything app, Musk has made waves during his recent stint as the social media platform’s head. Apple and Cook remain important allies for Musk, and it shouldn't come as too much of a surprise that the parties were able to smooth things over.


Source: Barron’s / Fortune