Antitrust, the App Store, and Apple
stratechery.com
stratechery.com
On an unrelated note, when people call Apple a monopoly because the only way that you can reach IOS users is via the App Store, I always say how is that different than the console makers[1]? But even more broadly, if you want to reach Facebook users you have to go through the Facebook and the same with Google and Amazon. How are any of the other platform providers any different?
[1] yes the physical media you buy for consoles still has to be approved by the console makers, they are cryptographically signed and they have to pay a license fee to the console makers.
This just does not match any available data. Look at where Apple gets the bulk of its revenue and profits: hardware products and optional services.
Look at their investment: the bulk of it goes toward developing new products and acquiring new technical capabilities.
Look at their pay services, none of which are required. You don't have to buy apps from the App Store; many apps are available for free, including almost all of Apple's own apps. You don't have to subscribe to Apple Music. You don't have to use iCloud for backups, for photo management, for anything, really. You don't have to use Apple Pay.
Look at their open access to the Internet. You can load any website you want in Safari... don't want the Facebook app? Just go to facebook.com, it works great.
Look at their most popular service, iMessage, which is still free.
Look at their required software updates, which are all free. New iOS? Install it for free. New version of Garage Band? Download it for free.
I think people are getting confused about what "rent seeking" actually means. Apple's paid services are upsells.
Rent payments are not optional (just like paying rent for real estate--you have to live somewhere). Microsoft made tens of $billions charging for non-optional OS updates and application updates... that was rent seeking. Again: note that Apple does not charge for their software updates!
The point of a rent, in economic terms, is that the person who is selling it does not add substantial value to the product or service. They just leech value.
The analogy is to someone who holds ancestral lands and rents them out unimproved. They get some chunk of the economic value that the land produces, without ever having put their own labor or their own capital into the transaction.
The argument is that the 30% fee that Apple charges on the app store is a rent in the software produced by other parties, with Apple adding little to the transaction.
The counterargument is, "Okay, so let there be multiple app stores on iOS, that compete with each other, and let the market price that package of services."
But regardless, let's not talk about whether Apple is providing luxuries or necessities -- that's not what rents are about.
- iCloud free tier is 5gb -- not enough for even a casual phone user with 1 minute 4k 60fps video (option on iPhones for 2-3 years now) takes 400mb.
- The alternative to "paid" apps are ad-supported apps. You're paying either with your bank account or your data and attention. I don't think we should call this optional and otherwise encourage ad-based ecosystem. (And, side note, I argue Apple should also tax ad revenue to prevent the current artificial advantage ad revenue has over IAP.)
The rent seeking point from Stratechery is taken directly from Apple's own earnings calls where they are now measuring their success based on revenue from this rent-seeking instead of on devices sold.
Whatever is measured will drive the company focus. To sell more devices they have to innovate and increase excellence. To increase rents they have to wring more and more $$ from existing users (with a secondary focus on increasing the hassle of switching). Apple themselves explain that they have shifted their focus from the former to the latter.
To note, there are a plethora of apps offering to backup users' photos and videos ... Google, Dropbox, OneDrive, etc.
I challenge you to find one instance of Apple describing their own strategy as “rent seeking”.
Again: people are getting confused. Optional paid services are not the same thing as rent seeking.
I don't follow how talking about it on earnings calls makes it "rent seeking". The App Store cut has only gone down since it was launched (for subscriptions after a year).
> "This just does not match any available data. Look at where Apple gets the bulk of its revenue and profits: hardware products and optional services."
you seem to be looking backwards but the statement you rebut is forward-looking.
yes, apple historically made its profits on hardware, but the point the parent and the article is making is that apple's business model is changing toward services and rent-seeking through its platforms like the app store.
> "Rent payments are not optional..."
the 30% apple charges for apps is not optional. as implied by the article, apple could charge 50% and developers would have no choice but to eat that cost.
Apple is trying to grow profits via paid services like Apple Music or Apple Pay, but those are optional upsells, not rent seeking.
If you take out the mention of services, this statement becomes false.
Apple gets $9 Billion from Google just for being default search engine.
And people continue to mix this "Services" Revenue from App Store as investment to Software, Garage Band, iWork, iOS Development etc.... They had been part of the product cost for YEARS before the 30% cut. Apple didn't need App Store revenue to continue developing OSX when iPhone didn't exist. It is what makes software as an industry so profitable in the first place, the cost of making the same software is the same regardless of 100 customer of 100 million customer. And now Apple has 800 million iPhone customers, or 250M customer every year.
I say this again, most developer aren't really concern with the 30% cut as it is, people not happy because they are not getting enough value from it. If Apple had offer additional developer services from that 30% cut it would have made them easier to swallow. Instead Apple is just happily collecting cash and do nothing.
The headphone jack removal wasn't comparable to past deprecations, like removing the CD drive from laptops -- which provided a significant new amount of space in the chassis.
An adapter is less convenient to use than having the Headphone jack on the device.
Is it really that farfetched to think they removed the Headphone jack to increase profits? Clearly, I'm arguing for it, but if this absolutely out there, I'd like to be brought back more sensible thought processes.
Not even the included earbuds with an iPhone purchase come with a 3.5mm jack. It's Apple's proprietary port, so you can only use Apple's wired earbuds with Apple products.
But why would you think that removing the headphone jack, and including lightning headphones, including an adapter for two years, and supporting standard BT would entice someone to spend $150 when they go to the Apple Store instead of buying wireless headphones?
I like the ability to charge my phone and listen to music simultaneously, without having to worry about my headphones also dying. Usually this is in a travel scenario.
Their “core constituency” haven’t been Mac buyers in years.
You can still run Android without Google Play Services, even though it's not a great experience.
Granted, there are tradeoffs. iOS is more secure in this space than Android, but Android is far more open on what you can do.
For example, Amazon created an app called Amazon Underground that would let you purchase and sideload apps onto your Android device from Amazon. Some of these apps didn't exist in the Play Store, so you had a viable option to buy exclusive titles from someone else.
On iOS, there is zero opportunity for a situation like this to occur. Everything must go through the App Store, and that's why I view it as a monopoly.
This is not quite true. If you write your own app you can install it on your iOS device. If someone put an iOS app on, say, Github, you could easily install it. No need for the App Store or Apple's review process. An app does not need to be signed unless you want to submit it to the App Store. Also, you can install iOS without using the App Store if you have a developer account.
I'm not disagreeing with you that iOS is far less open than Android.
That's not quite true either. Because an app installed like this will only function for a very limited time (a few weeks i believe) and then it expires and you can no longer start it. This means it is not practical and NOBODY will use this: which explains why there are none/hardly any of such apps available on Github, etc.
I did this with the f.lux app in the past and it was very annoying/not usable because of the necessary "recompile frequency".
Though I guess most people may just want to throw their arms up and force the government to write a law to make such easier for free?
Haha, no. Last I did this, you must have a Macbook, you must configure Xcode, generate new certificates, sign the entire application bundle, and then you get to sideload it - and never get an update ever unless you repeat the entire process.
In contrast on Android: "This application is from an unknown source. Would you like to still install it?"
Technically you just need macOS, I don't think there's anything stopping you from doing iOS development on a hackintosh.
I'll agree that the process is pretty ridiculous in comparison to Android though.
Which automatically voids any and all warranties on the product.
Like it was mentioned above, if you want to reach Playstation's, Nintendo's, or Microsoft Xbox's regular warranty abiding customers, you HAVE to go through their marketplaces and gain their approvals and pay their license fees first
If I sell you a general desktop computer and refuse to let you install any banking app aside from Bank of Evil, then I'm probably breaking antitrust statutes.
Playstations and Nintendos are more like video poker machines. Sure, they could theoretically run a bank app, but they're sold as locked down gaming only consoles.
Phones have become more than just an electronic device, just like the internet, water, power, in a way. Now I'm not saying you can't live without a phone, just that it's difficult and the general feel is that you must have a cell phone to function in society. So with that mindset not being able to install any app does have some merit.
Everyone "needs" a phone, not everyone "needs" an xbox.
Taking my comment with a grain of salt though, I think that's a generalization but I think that might be why people want iPhones more open over xbox's.
I would add "not everyone 'needs' an iPhone" to this.
iOS is not the only major OS in the phone market. And like Macs, a significant chunk of people (including normals) choose iOS, knowing that they're participating in Apple's walled garden.
I'm not a huge fan of Apple's rent-seeking behaviour (which is why I left Apple), but because Android exists and is flourishing, I don't think you can necessarily call Apple a monopoly. They only have a monopoly on their own customers, which isn't very different from a lot of businesses who have created their own platform.
What we need is laws for ownership of the hardware, I should be able to ask Apple or Sony to unlock my hardware because it is mine, the warranty is debatable but ownership should not be debatable.
Edit: I'll add to this point. A couple of nights ago my son accidentally (? i dunno how) a crapload of text messages from his iphone. There's no "eco-friendly" way to get them back. This is a disasterous situation for a teenage boy who struggles socially. They are still on his phone, but he can't get to them because Apple won't let me get to them. There are some sketchy third-party apps that claim for a king's ransom to be able to do it (they showed him a preview then asked him to pay up- that's how he knows they were still there). But I can't get to it at all from linux. Apple deliberately blocks me from accessing my own file system.
That's just mean.
If the messages are deleted and still accessible, that’s an even bigger problem. I would hope if I delete s message there would be no way for anyone to retrieve them.
The point is about freedom to do what you want with your hardware, give the people a way to remove the restrictions, put a huge warning but let me do what I want with a physical object I own.
"Delete" has always been separate from "purge" since the beginning of PCs.
What makes you think this is true? iOS clears up space on your disk when you delete messages, so presumably it’s actually clearing them out?
Mostly, clearing space simply amounts to setting a flag that space is available and it doesn't actually clear stuff. That's what 'shredders' do (as well as overwrite, etc.).
Though DRM and IntelME is a major step backwards.
Even worse is Android. Google releases a new OS and may see low double digit adoption after a year. OEMs have no incentive to push upgrades to their users. iOS’d ArKit can only work as well it does (not saying much bet still better than what Google could muster) because of tight integration between a known subset of hardware and software.
This isn’t even to mention all of the bespoke custom interfaces on Android and all of the adware on consumer PCs and Android Phones.
I do not use a smartphone (my last one broke and the RMA process was too much trouble on top of moving and doing my job, and now I'm used to not having it), and while it seems that some people assume you have one, you can generally get by without one just fine.
Now, I will say: given that Microsoft was charged for bundling IE with Windows in a highly integrated way which competing browsers could not replicate; it seems that some case can be made. Granted, I'd sooner make the case that Paypal is enforcing the anti-competitive desires of their neighbours against those neighbours' competitors.
The issue is the App Store, not the phone. And it's a lot harder to argue that the App Store is public infrastructure, in part because of the open access to the Internet that comes with every iPhone.
Reminder that Apple launched the iPhone with an app concept based only on open Internet access (web apps, no approval needed). They only added an app SDK and the App Store because of public outcry demanding it. Now we want to be mad at them for doing it?
It's not really different at all as business models go. In both cases, the value addition of the "shopkeeper" (i.e. Apple or the console maker) is to certify that the product meets certain quality and security standards. Functionally, they're staking their reputation on the apps you buy through them not bricking your device, exfiltrating your data, exposing you to content that is different from what was advertised, or helping you commit crimes. In the app store's case they're also doing some payment processing, customer service, subscription management, etc.
Where it becomes different is a matter of scale and use value. Game consoles are basically toys, so pernicious economic effects on the Playstation store doesn't impact peoples' ability to participate in society the same way those dynamics would on your phone.
>How are any of the other platform providers any different?
This is just the first lawsuit because it has the most direct parallels to existing caselaw. As this gets fleshed out people are going to come for the other digital services too.
Honestly we need to update our anti-trust laws to account for this sort of thing. Many of these functions should be regulated like public utilities rather than as services they way they are now. Vendor lock-in and prohibitive switching costs create lots of room for fleecing customers and consumer protection laws should take that into account.
The switching cost in the US of changing phones is going to your provider and trading your phone in every six months to a year.
When did not having an app stop people from participating in society? The average iPhone cost well over $600. People buying iPhones aren’t exactly underprivileged.
Most public utilities are private companies. That's why it's called regulation and not nationalization.
>The switching cost in the US of changing phones is going to your provider and trading your phone in every six months to a year.
No, most of the switching costs are the costs (monetary and in unpaid labor of learning new tools and workflows) to users of switching from one platform to another. This empowers the gatekeepers to extract higher rents which, by definition, add no value to society.
>When did not having an app stop people from participating in society?
When people start building transportation access into them or make it contingent to being able to do some jobs it becomes a necessary tool for participating in society. The average car costs over $30k, that doesn't mean we would have put up with things like proprietary gas stations either.
Public utilities are regulated as such because of the high capital costs to deliver to everyone and the need to gain the right of way to serve people. Last time I checked, Apple didn’t need to dig up roads to connect users. Most people think of utilities as being a public necessity. The right for Pornhub to put an app on the store. Not so much.
When people start building transportation access into them or make it contingent to being able to do some jobs it becomes a necessary tool for participating in society. The average car costs over $30k, that doesn't mean we would have put up with things like proprietary gas stations either.
So now an iPhone is a “necessary tool”?
In other words, they're natural monopolies which we regulate because market dynamics don't work when you have a natural monopoly. The same reason we highly regulated and then broke up Bell Telephone and Standard Oil before it.
App stores and online infrastructure are also natural monopolies, but they become so due to agglomeration and network effects. Regardless of the route, the end result is the same.
>So now an iPhone is a “necessary tool”?
A smartphone and its associated app ecosystem is, yes. Google's system isn't much better. And there doesn't seem to be much room for many other players.
Again, regular home telephones were deemed necessary enough to regulate and break up. So was oil refining and finance.
the differences are subtle, and indicate more of a degree of monopolization than a binary determination (as is always the case).
the console market differs in at least these ways: (1) console makers don't set the prices for games, (2) console makers can't charge any amount of markup on the games, (3) gamers have more mobility among platforms (can switch to PC gaming, for example).
overall, apple has much more control of the producer-to-consumer value chain, and they extract all the excess value in the value chain, which is why it's considered a monopoly even though technically there is competition via android and the play store. for example, and as noted in the article, producers absorb the cost of apple's markup, rather than passing it on to consumers, which indicates apple has all the pricing power in the relationship.
this 30% markup is the rent-seeking behavior of concern in the article. apple's growth is no longer built on innovation, but rather on its market posiiton and ability to extract these rents without providing further, direct value. for investors this is a clear concern (but not necessarily a reason to dump the stock). for consumers, it's a clear concern--we've seen this movie before with the likes of ibm, at&t, microsoft, sony, etc.
Apple doesn't set the prices for apps.
> (2) console makers can't charge any amount of markup on the games
Apple charges a flat percentage; console makers charge a unit cost. I don't know what it is but it's likely in the order of $5-10 per unit. This is likely much higher for digital game sales, and probably includes a percentage component.
> (3) gamers have more mobility among platforms (can switch to PC gaming, for example).
Apple device users have comparable mobility among platforms.
The final cost of publishing a game that we'll delve into is the distribution of the game, and that's the process of getting the game sold to wholesalers and then to retailers where you'll then have a chance to buy it. Wholesalers typically pay around $30 per game and with the costs of getting the goods to the wholesalers, any co-op advertising or marketing, and return of good contingencies being roughly $14 per game, the publisher is going to typically get $16 for every unit sold.
This doesn’t include the $3 - $10 per unit that the game maker pays the console manufacturer.
So the typical game maker gets less than 25% of the purchase price of a game. Compared to 70% on the App Store.
Apple doesn’t set the prices on games. In fact, they got sued for illegally collaborating with book publishers for trying to allow publishers to set their own prices - unlike Amazon.
Apple doesn’t “charge a markup” they take a fee for selling games just like the console makers do for both their online games and physical disc. Back in the day, you had to get your media manufactured by the console maker. If it were truly a markup, Netflix and Hulu would charge more for subscriptions via iTunes than on their website.
Users can change phones anytime they want to. In the US, you can switch phones every year or in some cases every 6 months.
Modern "smartphones" are marketed and function as general purpose devices that can also make phone calls. These pocket computers have more in common with laptops with integrated wireless radios and have been positioned to be or become a users primary general purpose computing device.
In contrast, game consoles are designed to be appliances with a limited set of features that serve a specific set of functions. While it is true modern consoles devices are built with mainstream general purpose hardware the intended purpose of these devices is still limited even if it is possible to do more with them.
To get onto Consoles in the first place, your product needs to be high enough quality, whereas iOS accepts basically any ol' junk.
The economics are so poor on iOS that it is basically impossible to survive (in games for example) without relying on exploitative free-to-play mechanics. This isn't helped by the fact that iOS lacks a comprehensive and easy to use refund feature that encourages people to try apps for a short time, like Steam offers.
If Apple reduced their commission to 10%, I think this would be of long-term benefit, since it would give them a a direct point of advantage over Android, and we could expect more premium apps and games to be released that actually take advantage of iOS hardware.
Speaking of Steam and Valve, they are the biggest monopolists - selling games for a 30% commission on an open platform - PC! At least Apple still make some great hardware.
So it sounds like you’re arguing that Apple should have stricter controls...
I can tell you that AppleTV streaming apps were a lot better and more consistent on the 3rd generation AppleTV where Apple did have stricter controls than on the 4th Gen AppleTV.
Which is unfortunate for developers, since it means they must stand out from all the other junk (ie. by using expensive and time-consuming advertising and PR) and then pay 30% commissions to the monopolist platform holder if they are successful. Its the worst of both worlds.
I think the solution is simply to uniformly increase the barriers to entry, and the simplest way to do that is monetary. Require $500 for every app or game published, which will quickly increase average quality, but is still a very low barrier for a legitimate creation.
A smart phone is a general purpose computer, a console is an appliance. When the iPhone first came out many people argued that it was a feature phone for this reason.
Philip K Dick, Ubik, 1969.
One thing that comes to mind is that a phone is much more personal, carries much more personal data (health data, banking, etc.), and it's something you often interact with the entire day, every day.
So, with Apple closing down the iOS system (for example you cannot inspect/debug ios apps like you can do with apps on a laptop), you end up having less transparency and less control over what apps do with your personal data.
https://twitter.com/thomasareed/status/1067527911798919172
...which sums up the issue i meant.
What is this malware able to do? Intercept network traffic? Read other apps data? Surreptitiously record your screen? Turn on your camera? Turn on your Mic? Get to the Secure Enclave?
And then he said.
“Sounds reasonable, but how are you going to determine that when there’s no way to examine the app on the device? Forensic extraction of the app and analysis on a different platform is never going to be a mainstream solution for that.”
Like there ever is a “mainstream solution” to doing forensics.
And guess what? He works for malwarebytes. Anti virus companies have been trying to sell bogus “virus protection” for iOS for a decade.
Unless you mean Windows on a phone that is completely irrelevant. Unless (when) Apple starts putting only iOS on PC's.
[Apple] can leverage its smartphone share into monopoly profits on digital goods and services that are on iOS not because iOS is anything special, but because that is the only possible way to reach nearly 50% of the U.S. population.
But it is something special precisely because Apple has enforced such strict quality control measures for its apps. It has refused lots of apps because allowing them would damage users' trust of its store. So just having an app show up in the store is a signal of quality. This is precisely why the store can reach 50% of the market. This is significant because without those standards from day one, I don't think Apple would have achieved its reputation as best in class which allowed it to gain the leadership position it has. So its a symbiotic relationship and you can't just focus on one side of the equation.
There probably aren't a lot of people who remember the Palm app experience which was way before the App Store. Apps were horribly unreliable and one had to rely on outside reviewers to determine which if any should be installed. Granted technology has changed drastically since then so its not an entirely fair comparison, but still I believe that you can't simply look at the App Store as a provider that could be replicated by anyone in the exact same manner as Apple if only they were allowed to. I do agree that users shouldn't be restricted from visiting other sites from within apps or even download from outside sources if a particular developer chooses to release its apps through an outside distributor.
> Apple does nothing to increase the value of Netflix shows or Spotify music or Amazon books or any number of digital services from any number of app providers; they simply skim off 30% because they can.
30% is a huge cut for what amounts to hosting, payment processing, and basic QA. Despite taking this big chunk, quality control in the App Store feels like it's on the decline - with a bunch of malware and scams slipping through in recent years. And of course, charging 30% for non-app content distributed through the App Store is completely insane.
Nothing forces me or anyone else to buy an Apple product. Why not complain about any similar system them, from consoles to even Steam. Or is the threshold that there are billions of dollars at stake and therefor lawyers can profit from it, state AGs can make a name for themselves, and such?
Too many people feel entitled to tell others what to do even when the association is purely voluntary and this is just wrong
Same for Amazon's Kindle and video apps. Same for Spotify's app. The trend there seems to be they make the app free, and let you sign up and pay for their service on their own website (which you can do in Safari on iOS, if you want to). So I don't understand how Apple's "skimming" anything out of those apps -- 30% of $0 is $0.
The net effect is that sellers lose 30% of the potential earnings from the in-app purchases compared to getting subscriptions from elsewhere, and they're not allowed to increase in-app purchase prices by 30% to compensate.
Because Apple disallows sellers from having messages or buttons in their apps that take users to the sellers' websites in order to make the subscription, users who don't know better than to use the in-app purchase system wind up making the sellers less money — in theory. I say "in theory" since, after all, the sellers don't have to deal with payment systems, credit card processing, the sorts of hosting costs associated with popular app downloads, and so on.
On the one hand, it's clearly unfair and heavy handed for Apple to disallow those messages enticing users to the websites so sellers can take the full price. On the other hand, with apps moving to free-to-download but requiring subscriptions to function, especially big ones like Netflix and so on, it mightn't be that surprising: a 30% cut of the subscriptions might turn out to be rather reasonable given that Apple's hosting the App Store, addressing and directing complaints, handling payments, and more.
On yet a third hand, companies don't need to provide in-app purchases for subscriptions at all, mandating that users go to their websites. It's up to the sellers to decide what provides users with the least friction, though.
This sounds like it would seriously undercut plaintiffs argument that the 30% they're paying is on top of the correct price.
FWIW this is the main thing I like about the App Store rules. There are some sites and services I'll trust with payment information, but there are many, many more I won't. Being able to buy/subscribe to things anyway, with Apple as the trusted intermediary handling the payment, is pretty convenient.
Not only that, but letting your users not need to deal with credit card details or remembering their PayPal logins, whatever, is very frictionless and thus an attractive proposition for regular, non-technical users.
The other costs from that article, like returns & any publisher cuts, you still need to handle yourself when publishing on the app store. Apple doesn't replace the role of the publisher in this case. They don't pay for marketing or put up-front money towards development, which is what a game publisher's role actually is these days.
The publisher, in the case of music, charges the artist “return fees” for digital and streaming music.
And if you bought iOS apps at Walmart you'd have those same retailer margins. You're restricting yourself to digital distribution here, which don't have retailers or retailer margins. So you can't count those against games when they don't have them in the same circumstances either.
I agree with the majority of what he said but I disagree that it is that clear cut that Apple’s rent seeking isn’t hurting costumers. While I’m no lawyer either, the Supreme Court case that is relevant here was dealing with the state of Illinois as a customer and the mass consumer markets are two different things and I believe the Supreme Court will deal with this in a separate lens.
Could be very well that Apple does win but the fact that a product like Spotify, to name one, is cheaper when bought through the Spotify website and more expensive on the App Store shows clearly that in fact this does harm customers. I think the Supreme Court could rule in a whole other direction on this because of that fact coupled with Apple allowing no other competition on the platform, meaning no way to download a second App Store or even link to purchasing the product on a website especially for digital goods.
In Spotify's particular case, however, Apple owns the marketplace (App Store) as well as a giant competitor in iTunes/Apple Music (and if I'm not mistaken - I'm not an iOS user- Apple Music is pre-installed on every iOS device).
However, it's also the method you use to access music you own that is on the iPhone, whether you've synced it from your computer or purchased it through the iTunes Store.
Now, maybe I'm just a dinosaur for wanting mainly to listen to music I own rather than streaming services all the time, but I don't think you can just claim that use case doesn't exist or matter.
Having said all of that, I think that because iOS is Apple's platform, and they should basically be able to do whatever they want with it.
That's Spotify's choice though, right? They could charge iOS IAP subscribers the exact same price as non-IAP subscribers and absorb the 30% loss in much the same way a bunch of supermarkets absorb various unpopular taxes.
Whereas the products in a supermarket appear from nowhere without any money changing hands?
I'm not terribly familiar with the case law but I do know that NYSE has had at least a handful of similar antitrust cases in the past. I'm not sure if the cases were getting at transaction costs but the crux of every antitrust suit is generally that XYZ action by a monopoly leads to unjustifiably higher prices. It occurred to me that as a result of this case Apple might change their pricing structure to align with the pricing strategy stock exchanges typically use. That is, a nominal transaction fee that covers only the cost of the transaction but then charges the companies an annual "listing fee." That would be awful for innovation, small developers, and by extensions, consumers who would then having fewer apps to choose from.
I suppose thats just a long way of me saying that I fear the Plaintiffs may actually hurt consumers more in the long run.
FWIW, Apple already charges an annual fee of $99 to enroll in their Developer Program, which is required to list apps on the App Store: https://developer.apple.com/support/compare-memberships/
And that’s a good thing. Nintendo figured out in the 80s that crap devalues your platform and they had to approve what games were allowed to run on it. They saw what happened to Atari.
I’ll download basically anything on my iPhone because I know an app can’t do much damage - unlike a Windows computer or a Mac.
Not being able to do damage as nothing to do with the store. It has to do with whether or not iOS's sandbox is secure.
I guess it's just interesting to me because Apple is both the market and the market regulator here. Continuing with my stock exchange analogy Apple plays the role of NYSE and the SEC. The nature of wearing both hats means there are going to be conflicts of interest and Apple has a fiduciary duty to their shareholders, not to their consumers. I see both sides but struggle to see a solution that doesn't leave app store customers worse off.
They just don't want competition on their platform, and Apple is typically remain small enough to get away with that position. Particularly in stronger pro-anti-trust places like the EU, where iOS is less than 30% market share.
Besides, nothing stops you from still running arbitrary code in iOS downloaded from the web. You're simply restricted to doing that either interpreted or via Apple's JIT. In either case you're still getting arbitrary execution that Apple never statically analyzed, interacting with any APIs that the app wants that code to have access to (intentionally or not).
In fact, I'd argue that it reduces security, since users can't install more secure browsers than Apple's own one (and no one would care to even make one since it won't be usable).
If you have an evidence-based argument to make that Apple has a monopoly in the market for mobile operating systems and has illegally used it to try to obtain a monopoly in the market for web browsers, I would be intrigued to hear it.
(in other words, not every bundled web browser is automatically a violation of antitrust law; nor is every attempt to forbid something on iOS automatically a violation)
I don't see it as a valid excuse. Apple are clearly damaging the industry and market with their behavior. By blocking major features in their browser and banning all other browsers, they are forcing others into supporting their specific requirements, because otherwise they won't be able to reach iOS users. Examples like trying to sabotage DASH for video streaming by not supporting MSE on iOS are quite obvious.
Anti-trust was intended to prevent such kind of outcomes. But it was diluted to the point of being practically useless, allowing the likes of Apple to run amok with their monopolistic garbage.
Microsoft did things that actually broke the law. Nobody's yet convinced a court that Apple has done things that broke the law. And Apple is demonstrably not doing the thing Microsoft got in trouble for.
So you're free to argue that in your ideal world, if you made all the laws, Apple would be put out of business. But you're not free to argue that that's what the actual laws in the real world say to do.
> in your ideal world, if you made all the laws, Apple would be put out of business.
In the ideal world with functional anti-trust, they'd be held accountable for their disgusting anti-competitive behavior and they'd fix it. In the current world their monopolistic abuse runs unchecked, causing damage to the industry and progress.
See also: Uber, AirBnb, Amazon, UberEats, ...
We need some new laws, fast.
Analyzing monopolies based on whether there is harm for the individual consumer is completely insufficient for determining whether a company is a monopoly. From "Amazon's Antitrust Paradox", in the Yale Law Journal:
>This Note argues that the current framework in antitrust—specifically its pegging competition to “consumer welfare,” defined as short-term price effects—is unequipped to capture the architecture of market power in the modern economy. We cannot cognize the potential harms to competition posed by Amazon’s dominance if we measure competition primarily through price and output. Specifically, current doctrine underappreciates the risk of predatory pricing and how integration across distinct business lines may prove anticompetitive. These concerns are heightened in the context of online platforms for two reasons. First, the economics of platform markets create incentives for a company to pursue growth over profits, a strategy that investors have rewarded. Under these conditions, predatory pricing becomes highly rational—even as existing doctrine treats it as irrational and therefore implausible. Second, because online platforms serve as critical intermediaries, integrating across business lines positions these platforms to control the essential infrastructure on which their rivals depend. This dual role also enables a platform to exploit information collected on companies using its services to undermine them as competitors.
https://www.yalelawjournal.org/note/amazons-antitrust-parado...
• You don't know if it doesn't harm the consumer, because if there were more players on the market, the consumer could (possibly) have more choice and access to better products.
• The monopoly could harm the consumer in the future. At that point it may be more difficult for the market to bootstrap competing products (especially if the monopoly controls the entire supply chain). This is a bad situation, even if it doesn't harm consumers now.
If the monopoly does start substantially harming consumers, then I'd say that's when action should be taken, not before the market has a chance to respond.
It takes time for courts to process complaints or for new companies to get started; if the only entity serving a market changes its behavior for any reason, it can shock the entire system and do great harm while our correction mechanisms work to alleviate the problem.
You see this in the job market all the time: a local factory closes and puts everyone in town out of work.
Controlling the market and raising costs for sellers results in those costs being passed on to the buyer, causing indirect harm.
You didn't at all answer my question.
And these are completely unnecessary Apple dependencies.
iPhone market share in US is ~50%.