Zuckerberg says other tech firms stifle innovation with high fees

Mark Zuckerberg, Chairman and CEO of Facebook, arrives to testify before the House Financial Services Committee on “Facebook’s Examination and Its Impact on the Financial Services and Housing Sectors” at 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 limited consumer options during a live broadcast Thursday, all while his company faces an antitrust lawsuit from the federal government and mounting pressure from Congress over a recently leaked internal leak. Documents

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

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

However, the comments show how the company is trying to position itself in a distinct position from its peers at big tech companies, as the industry faces intense pressure from several government branches and fights accusations of its alleged anti-competitive behaviour. They also remember a long history of tension between Zuckerberg and Apple CEO Tim Cook, in particular.

During his Facebook Connect presentation, Zuckerberg said the past few years have been “modest.” That period included the revelations of the Cambridge Analytica data scandal, a $5 billion settlement with the Federal Trade Commission over privacy practices, allegations that Facebook had amplified misinformation fueling false claims that the US presidential election had been stolen, and more.

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

He added that while Facebook is huge with billions of users, it’s also humbling to learn how to build for other platforms.

“Living by their rules has profoundly shaped my views of the tech industry,” Zuckerberg said. “Most of all, I have come to believe that a lack of choice and high fees stifle innovation, prevent people from building new things and hold back the entire Internet economy.”

This language appears to reflect the complaints many app developers have against Apple and Google, although Zuckerberg did not say so himself. Fortnite’s Epic Games has sued the two companies over fees they charge developers for payments made through their apps once they’ve been downloaded from the platform’s app stores. Recently, a judge in the case against Apple ruled that the platform could not find a monopoly, but ruled that it could not force developers to use the in-app payment system.

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

He added that the company will continue to support sideloading, or the option to upload apps outside the central app store, “instead of forcing them to use the Quest Store to find apps or reach customers.” By doing so, Zuckerberg appeared to draw a sharp contrast with Apple, which bans sideloading on its iOS platform due to what it says are security concerns. Google allows sideloading of apps on Android.

Zuckerberg and Cook have previously clashed over their approach, although they usually refrain from calling each other directly. Shortly after the Cambridge Analytica scandal, when asked what he would do if he had the same problems as Zuckerberg, Cook said, “I wouldn’t be in that position.” He later gave a speech linking business models using data collection to target targeted ads, and content amplification using algorithms, to real-world violence.

Recently, Zuckerberg called Apple over its privacy changes that make it difficult for developers to target ads and pointed to Apple as a competitor in messaging services.

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

Apple and Google representatives did not immediately respond to requests for comment.

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