Top Apple Executive Admits Failures in Attempt to Introduce Competition in iPhone App Payments

In a recent court-ordered makeover of the U.S. payment system in Apple’s iPhone app store, longtime executive Phil Schiller admitted that the changes have not significantly increased competition. This admission comes as a federal judge considers demanding further modifications to the system.

Schiller, who has overseen the app store since its inception in 2008, testified about the new payment options that have been largely ignored by developers since their introduction in January. Despite efforts to create a program to encourage developers to adopt the new payment system, Schiller acknowledged that more work needs to be done to attract them.

The court-ordered changes were part of an antitrust case alleging that Apple’s app store had become a monopoly. While the judge rejected the monopoly claims, she ordered Apple to allow developers to display links to alternative payment options, threatening Apple’s lucrative in-house payment system.

During the hearings, the judge expressed frustration with Apple’s focus on profit margins and lack of progress in increasing competition. Schiller defended Apple’s response as intended to promote competition while protecting user privacy and security but struggled to explain the lack of interest from developers in adopting external payment links.

Only 38 apps have sought approval for external payment links in the first four months, out of approximately 136,000 apps in the U.S. that engage in digital transactions. Schiller pledged to take action to encourage more developers to utilize the external payment options.

The hearings are set to resume on May 31, with Schiller returning to the witness stand to continue his testimony. The outcome of the case could have significant implications for Apple’s app store and the broader digital marketplace.