Microsoft took a subtle dig at Apple's controversial App Store rules as the iPhone maker is getting hit with 2 antitrust probes

• Microsoft's Brad Smith said it's time for regulators to have a "more focused" discussion about how app stores are governed and whether they violate antitrust rules.
• When speaking with Politico, Smith said app stores have created "higher walls" than barriers that existed in the industry 20 years ago, when Microsoft was facing antitrust scrutiny.
• Smith didn't mention Apple by name, but seemed to be referencing the tech giant's App Store policies, through which the company takes a 30% cut of transactions.
• The European Commission just announced it's launching two antitrust investigations into Apple over the App Store and Apple Pay.

Brad Smith, Microsoft's president, is calling for regulators to take a closer look at how app stores are being governed.

"The time has come, whether we are talking about DC or Brussels, for a much more focused conversation about the nature of app stores, the rules that are being put in place, the prices and the tolls that are being extracted and whether there is really a justification in antitrust law for everything that has been created," Smith said during a livestreamed Politico event on Thursday.

The comments come after the European Commission recently launched two antitrust investigations into Apple: one targeting the company's App Store policies and another examining Apple Pay.

"It appears that Apple obtained a 'gatekeeper' role when it comes to the distribution of apps and content to users of Apple's popular devices," Margrethe Vestager, executive vice president of the European Commission, said in a statement announcing the investigation. "We need to ensure that Apple's rules do not distort competition in markets where Apple is competing with other app developers, for example with its music streaming service Apple Music or with Apple Books."

Smith acknowledged Microsoft's own history when it comes to antitrust concerns. The Department of Justice sued Microsoft back in 1998 over concerns about whether the company's position as the purveyor of Windows gave it too much power in the industry. But Smith pointed out that anyone can reach consumers directly with their app or service on Windows without having to go through Microsoft's store.

"They impose requirements that increasingly say there's only one way to get onto our platform and that is to go through the gate that we ourselves have created," Smith said to Politico in reference to today's app stores. "In some cases they create a very high price or toll, in some cases 30% of all of your revenue has to go to the tollkeeper."

Smith did not mention Apple or Google by name. But Apple is known for implementing what has come to be known as the "Apple tax," the cut that Apple takes from transactions made through its App Store.

Apple takes up to a 30% cut of such transactions, and developers are required to use Apple's payment system rather than directing consumers toward their own apps or websites to make in-app purchases.

Aside from the scrutiny Apple is facing from the European Commission, the company's App Store policies were in the spotlight again this week after David Heinemeier Hansson, CTO and cofounder of Basecamp, criticized Apple on Twitter for rejecting the second version of his company's paid email app, Hey.

The company cited Section 3.1.1 of the App Store guidelines as ground for failing the app review process, a rule that stipulates app developers must use Apple's in-app payment system if they offer paid services. Apple wrote to Basecamp on Thursday to say that it stands by its decision, according to NBC News.

Apple has previously expressed the belief that the exposure and distribution that apps and developers receive through the App Store justify the percentage it takes from transactions.

"After using the App Store for years to dramatically grow their business, Spotify seeks to keep all the benefits of the App Store ecosystem — including the substantial revenue that they draw from the App Store's customers — without making any contributions to that marketplace," Apple wrote in its response to a complaint Spotify filed with the European Commission last year.

Still, Smith says the barriers to entry developers face with today's app stores are "more formidable" than what was happening in the industry back in the late 1990s when Microsoft was under antitrust scrutiny.

"Increasingly you're seeing app stores that have created higher walls and far more formidable gates to access other apps than anything that existed in the industry 20 years ago," he said.

Are you an app developer with an insight on Apple's App Store policies to share? Contact Business Insider reporter Lisa Eadicicco via encrypted email (lisaeadicicco@protonmail.com), standard email (leadicicco@businessinsider.com), Signal (+15513339072) or Twitter DM (@lisaeadicicco). We can keep sources anonymous. Use a nonwork device to reach out.