Apple CEO Conveyed Concerns About App Store Curbs to Japan PM: Report

Apple Chief Executive Tim Cook asked Japanese Prime Minister Fumio Kishida to consider protecting users when regulating distribution of smartphone apps, Nikkei reported on Friday citing sources.

Apple has faced heightened scrutiny over its App Store practices that charge a 30 percent fee on payments and subscriptions and does not allow iPhones to use apps from third party app stores.

Cook asked Kishida to make sure that regulations around distribution of apps do not undermine user privacy and security, the report added.

Apple and the Japanese PM’s office did not immediately respond to Reuters requests for comment.

Earlier this month, Apple said it had invested more than $100 billion (nearly Rs. 8,27,100 crore) in its Japanese supply network over the last five years, as Cook visited the country.

Revenue from Apple’s services business, which includes the App Store, has been growing at a rapid pace in the last few years and now hovers at about $19 billion (nearly Rs. 1,57,144 crore) per quarter.

It was reported a few days back that Apple’s Japan unit is being charged $98 million (nearly Rs. 810 crore) in additional taxes for bulk sales of iPhones and other Apple devices to foreign tourists that were incorrectly exempted from the consumption tax, the Nikkei newspaper said.

Citing unidentified sources, the Nikkei reported on Tuesday that bulk purchases of iPhones by foreign shoppers were discovered at some Apple stores with at least one transaction involving an individual buying hundreds of handsets at once.

Japan allows tourists staying less than six months to buy items without paying the 10 percent consumption tax, but the exemption does not apply to purchases for the purpose of resale.

Apple Japan is believed to have filed an amended tax return, according to Nikkei.

In response to a Reuters’ request for comment, the company only said in an emailed message that tax-exempt purchases were currently unavailable at its stores. The Tokyo Regional Taxation Bureau declined to comment.

© Thomson Reuters 2022