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Zuckerberg says other tech firms stifle innovation with high fees

Zuckerberg says other tech firms stifle innovation with high fees

Facebook Chairman and CEO Mark Zuckerberg arrives to testify before the House Financial Services Committee on “An Examination of Facebook and Its Impact on the Financial Services and Housing Sectors” in the Rayburn House Office Building in Washington, DC on October 23, 2019.

Mandel Ngan | AFP | Getty Images

Facebook founder Mark Zuckerberg accused other tech companies of “stifling innovation” with high fees and little choice for consumers during a live stream on Thursday, all while his company faces an antitrust lawsuit from the federal government and heightened pressure from Congress over recently-leaked internal documents

Zuckerberg made the comments at the Facebook Connect event Thursday, where he announced the company has changed its name to Meta.

He also laid out the company’s plans to build a metaverse — a virtual reality experience where people can meet online. His comments seemed to allude to mobile operating systems like those created by Apple and Google, though he did not mention any company by name or specify the types of platforms he was talking about.

Still, the comments show how the company is trying to position itself as distinct from other Big Tech peers as the industry faces intense pressure from several branches of government and it fights charges of its own alleged anticompetitive conduct. They also recall a long history of tension between Zuckerberg and Apple CEO Tim Cook, in particular.

Zuckerberg said during his presentation at Facebook Connect that the last few years have been “humbling.” That period has included the revelation of the Cambridge Analytica data scandal, a $5 billion settlement with the Federal Trade Commission over privacy practices, allegations that Facebook amplified misinformation fueling false claims that the U.S. presidential election was stolen, and more.

Zuckerberg said he’s learned that “building products isn’t enough. We also need to help build ecosystems so that millions of people can have a stake in the future, can be rewarded for their work and benefit as the tide rises, not just as consumers, but as creators and developers.”

He added that as big as Facebook is with billions of users, it’s also been humbling to learn to build for other platforms.

“And living under their rules has profoundly shaped my views on the tech industry,” Zuckerberg said. “Most of all, I’ve come to believe that the lack of choice and high fees are stifling innovation, stopping people from building new things and holding back the entire internet economy.”

That language seemed to echo complaints that many app developers have waged against Apple and Google, though Zuckerberg did not say so himself. Fortnite-maker Epic Games has sued both companies over the fees they charge developers for payments made through their apps once they’re downloaded from the platforms’ app stores. A judge recently ruled in the case against Apple that she could not find the platform to be a monopoly, but ordered that it can no longer force developers to use its in-app payment system.

Zuckerberg emphasized the “different approach” his company, which he announced would rebrand as “Meta,” would take. “We want to serve as many people as possible, which means working to make our services cost less, not more,” he said.

He added that the company would continue supporting sideloading, or the option to load apps outside of a centralized app store, “rather than forcing them to use the Quest store to find apps or reach customers.” In doing so, Zuckerberg seemed to draw a sharp contrast to Apple, which prohibits sideloading on its iOS because of what it says are security concerns. Google allows sideloading apps on Android.

Zuckerberg and Cook have previously clashed on their approaches, though they usually refrain from calling each other out directly. Shortly after the Cambridge Analytica scandal, when asked what he would do if he were facing the same issues as Zuckerberg, Cook said, “I wouldn’t be in this situation.” He later gave a speech tying business models using data collection to drive targeted ads, and amplifying content with algorithms, to real-world violence.

More recently, Zuckerberg has called out Apple for its privacy changes that make it harder for developers to target ads and has pointed to Apple as a competitor in messaging services.

Zuckerberg said the company still needs to work out the details on how it will charge developers Meta’s ecosystem. While the company aims to offer many services with low fees, he acknowledged “we’ll need to keep some fees higher for some period to make sure that we don’t lose too much money on this program overall.”

Google declined to comment. A spokesperson from Apple didn’t respond to a request for comment.

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