Musk Targets Apple Over Ad Cuts, App Store Fees

Publicly antagonizing one of your largest advertisers after many others have fled isn't a textbook business strategy. Elon Musk isn't exactly a by-the-book tycoon.

The world's wealthiest human began his second month of owning Twitter on Monday by tweeting a variety of complaints about Apple (AAPL), which has historically spent more than $100 million annually on advertising with the social network, according to one estimate. Apple has recently reduced Twitter ad purchases, Bloomberg reported.

Since purchasing Twitter for $44 billion on Oct. 27, Musk has laid off most employees while many of the remaining ones left; briefly sold blue check marks to unverified users impersonating companies, brands, and celebrities; and cast abandonment of Twitter's moderation policies as a defense of free speech.

Last week, Twitter dropped its policy against COVID-19 misinformation. Layoffs have cut in half the company's team seeking to curb child exploitation on the network. Somewhere between a third and a half of Twitter's corporate advertisers have stopped spending after Musk acquired the company, and the billionaire hasn't been shy about decrying their decisions as an attack on free speech.

On Monday, Musk singled out Apple. "Apple has mostly stopped advertising on Twitter. Do they hate free speech in America," he tweeted. Nineteen minutes later, he asked to speak with the manager. "What's going on here, @tim_cook," Musk tweeted at Apple's CEO. Musk isn't among the 69 Twitter accounts Tim Cook follows, and he hasn't responded publicly.

Musk proceeded to complain about Apple "censorship" and "secret suppression of free speech," claiming the company "threatened to withhold Twitter from its App Store, but won’t tell us why." He also took a swipe at Apple's controversial practice of taking a 30% cut of app owners' App Store revenues; Alphabet's (GOOGL) Google Play store retains the same percentage. Musk returned to this theme on Tuesday, tweeting, "Apple and Google effectively control access to most of the Internet via their app stores."

Lest anyone mistake this for a mundane corporate dispute, Musk also tweeted Monday that "this is a battle for the future of civilization. If free speech is lost even in America, tyranny is all that lies ahead."

Twitter generates the bulk of its revenue from advertisers, so app store fees haven't been material to its results. Musk may, however, hope to gain some leverage over the world's most valuable company by joining the broad coalition opposed to the market power Apple and Google have amassed by owning popular smartphone operating systems.

Apple remains in litigation with Epic Games, owner of Fortnite, after Epic challenged Apple's App Store rules and cut. Epic has received support from Microsoft (MSFT), Match (MTCH), and Roblox (RBLX), as well as 35 U.S. states, in arguing Apple wields market power in breach of antitrust laws.

Beyond that case, Musk's stance on speech has increasingly dovetailed with that of Republicans who say any moderation of abusive speech amounts to censorship. Apple and Alphabet's Google drew criticism from the right in 2021 after temporarily banning the social networking site Parler from their app stores over hate speech as well as user threats tied to the Jan. 6, 2021 insurrection at the U.S. Capitol. Both companies eventually resumed distributing Parler after it agreed to block such content for app users.

Musk endorsed Republicans ahead of this month's midterm election, pitching the nod as an effort to ensure a divided government curbing "the worst excesses of both parties." Corporations including Apple and Walt Disney (DIS) have been attacked by critics on the right upset with their stances in favor of human rights and diversity.