ZyCrypto: Apple's App Store Policies Criticized for Limiting Blockchain and NFT Innovation

Rep. Gus Bilirakis of Florida and Rep. Jan Schakowsky of Illinois sent a bipartisan letter to Apple CEO Tim Cook on Friday, July 28, expressing concerns about Apple's App Store policies and how they may inhibit the growth of emerging technologies such as blockchains, NFTs, and distributed ledger technologies.

In the letter, the two high-ranking members of the Innovation, Data, and Commerce Subcommittee requested information and documents from Apple in order to better comprehend the impact of these policies on the technological leadership of the United States.

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This letter follows a November 2022 inquire from lawmakers to Apple regarding security vulnerabilities and foreign surveillance related to Chinese-originated applications, such as TikTok. Legislators were concerned that Apple's strict guidelines could be used to impede competition and innovation, despite the company's previous assertions that they enhance security.

"While Apple has argued that these limitations increase security by creating a walled garden, many are concerned that Apple has used the app store as a weapon against competitors," the two legislators wrote in a joint statement. "It is crucial that Congress fully comprehends the App Store Guidelines and the extent to which they limit innovation and affect American technological leadership.

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However, the letter specifically cited instances in which Apple's policies allegedly prevented blockchain and NFT-related applications from realizing their maximum potential.

The letter stated, "Apple appears to have used App Store guidelines to increase its own profits and reduce the utility of apps in blockchains, NFTs, and other blockchain-related technologies."

Notably, in December of last year, Coinbase accused Apple of demanding a 30% share of gas fees associated with NFT transfers, arguing that such a demand was not practicable within Apple's in-app purchase system. Companies such as Axie Infinity also encountered difficulties obtaining App Store approval for their blockchain-based applications, prompting them to release limited versions that omitted fundamental NFT mechanics.

To elucidate these issues, the two legislators requested information from Apple regarding its app review procedures, foreign ownership screening, and the potential for using the "secure element" in smartphones to support blockchain innovation and user data security.

In addition, the lawmakers outlined eighteen concerns they want the technology company to answer, such as whether it intends to develop apps using blockchain or related technologies, its app review processes, and its in-app purchase policies. Apple is anticipated to respond by the 14th of August, 2023.

However, the letter specifically cited instances in which Apple's policies allegedly prevented blockchain and NFT-related applications from realizing their maximum potential.

The letter stated, "Apple appears to have used App Store guidelines to increase its own profits and reduce the utility of apps in blockchains, NFTs, and other blockchain-related technologies."

Notably, in December of last year, Coinbase accused Apple of demanding a 30% share of gas fees associated with NFT transfers, arguing that such a demand was not practicable within Apple's in-app purchase system. Companies such as Axie Infinity also encountered difficulties obtaining App Store approval for their blockchain-based applications, prompting them to release limited versions that omitted fundamental NFT mechanics.

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