Apple Asks Judge to Dismiss App Store Monopoly Lawsuit

[BaldiMac]

I think that is the entire basis of this lawsuit though; should we be able to get what we want in this case?

Huh. I figured it had a legal basis.

In any case, the arguments here are a bit silly. I am willing to bet the vast majority of people talking as if they were lawyers are the farthest thing from it. I am interested in the outcome. It doesn't seem as cut and dry as you, and others, are making it, else it wouldn't have even made it this far, I would think.

It wouldn't have made it to the point where Apple asks for a dismissal? Lots of cut and dry lawsuits go to trial!

I hope you realize that competition only works when applied to the same market. An Android app market is separate from an iOS app market. There is no competition in the iOS app store market, hence a monopoly.

This is an interesting viewpoint, one that I can certainly follow. Certainly a better argument than this "but if Sony/Microsoft/nintendo" garbage. I think I read some nonsense about KCups a wile back too. LOL!

I think it's one of those arguments that sounds good on the surface. There is actually plenty of competition in the iOS app market. Developers set prices and compete against each other. And it's very hard to argue that App Store pricing is artificially high. Apps are dirt cheap. And Apple's cut is right in line with their major competitors (Google, Amazon) at 30%.

Also, you can obviously call Apple's exclusivity to their own products a monopoly. Nothing wrong with that. However illegal monopolization requires "market power plus exclusionary or predatory acts without business justification."
http://www.ftc.gov/bc/antitrust/monopolization_defined.shtm

Even at that high level, I think it's pretty obvious that Apple has legitimate business justification for App Store exclusivity.

 

[ncaissie]

There's a whole catalog of titles only available through Sony via direct download, Journey comes to mind (beautiful game), where the only option when we purchased it was to buy directly from Sony Online, directly through the PS3 (I believe some "download only" titles eventually come to disc as well).

Those devs are allowed to put them on discs if they so choose. Also there is rumor that Steam is coming to the PS3 or 4.

 

[Judas1]

Huh. I figured it had a legal basis.



It wouldn't have made it to the point where Apple asks for a dismissal? Lots of cut and dry lawsuits go to trial!



I think it's one of those arguments that sounds good on the surface. There is actually plenty of competition in the iOS app market. Developers set prices and compete against each other. And it's very hard to argue that App Store pricing is artificially high. Apps are dirt cheap. And Apple's cut is right in line with their major competitors (Google, Amazon) at 30%.

Also, you can obviously call Apple's exclusivity to their own products a monopoly. Nothing wrong with that. However illegal monopolization requires "market power plus exclusionary or predatory acts without business justification."
http://www.ftc.gov/bc/antitrust/monopolization_defined.shtm

Even at that high level, I think it's pretty obvious that Apple has legitimate business justification for App Store exclusivity.

The key word is business justification. Does the appstore no longer function if there's another store that also sells iOS apps? Sure that other store might become more popular and put the appstore out of business, but that's business. There is no justification why other companies aren't allowed to start their own iOS store.

 

[bawbac]

There is no justification why other companies aren't allowed to start their own iOS store.

Control and greed come to mind.

 

[Judas1]

Control and greed come to mind.

Lol, yeah but that doesn't fly when it comes to the law.

 

[MagnusVonMagnum]

You've got competition on Android and yet the main players (Amazon and Google) still charge 30%. Why hasn't someone setup an appstore for Android that only charges the 5% that some people claim is fair, or even 20%? Isn't it possible that the 30% isn't as outrageous as you claim and is actually a fair cut to take?

It's not just a question of whether the ONE supplier is "fair" or not (competition isn't just about fair prices, but fair opportunity for other companies to compete) but whether you as the consumer have the right/ability to put the programs YOU want on YOUR computer and right now Apple denies anything they feel competes with their software or is too adult or just tickles them the wrong way. So while I can appreciate your argument against the 30% thing, it's by far NOT the ONLY issue in regards to Apple having the only legal method (now that jailbreaking is no longer legal once again on newer products) to install 3rd party software.

 

[Renzatic]

Apple having the only legal method (now that jailbreaking is no longer legal once again on newer products) to install 3rd party software.

Weirdly enough, it's legal on phones, but not on tablets. I'm still trying to figure out the logic of that decision.

 

[MagnusVonMagnum]

Weirdly enough, it's legal on phones, but not on tablets. I'm still trying to figure out the logic of that decision.

And tablets are full blown computers, really. Can you imagine if you couldn't install any open software you wanted on your desktop/notebook Mac? Apple has already put in place (Gatekeeper) the mechanism to enforce this (short of hacking, of course) and so it's one of those things that might be "legal" but isn't ethical, IMO. All computers have had open software models from the beginning and closing that down for profit reasons is like saying you have to buy groceries only from the one local supermarket. It's just not right, IMO.

 

[Renzatic]

And tablets are full blown computers, really. Can you imagine if you couldn't install any open software you wanted on your desktop/notebook Mac? Apple has already put in place (Gatekeeper) the mechanism to enforce this (short of hacking, of course) and so it's one of those things that might be "legal" but isn't ethical, IMO. All computers have had open software models from the beginning and closing that down for profit reasons is like saying you have to buy groceries only from the one local supermarket. It's just not right, IMO.

They could say they're closing it down for security reasons, but...yeah. I agree. I'd much prefer an open model. It's worked wonderfully in the past, and it'd still work wonderfully now.

Really, the Gatekeeper approach gives you the best of both worlds. You can have the vetted, it-just-works approach of the walled garden if you want the simplicity and peace of mind, but can opt out at any time if you find yourself wanting to stretch your legs out a bit and use your computer in a more freeform fashion.

 

[firewood]

I hope you realize that competition only works when applied to the same market. An Android app market is separate from an iOS app market. There is no competition in the iOS app store market, hence a monopoly.

The government defines a market far more broadly that this. You can't force GM dealers to sell new Ford cars, or put Ford engines in their cars, because there isn't a GM market. There is just a car market where both automakers compete, according to these legal market definitions.

If you have your own machine shop, you can mod your car yourself with your own parts. Same as having an iOS developers enrollment and knowing how to use source code.

So if you want Android apps, simply buy an Android device. Problem solved without silly government intervention.

 

[firewood]

There is no justification why other companies aren't allowed to start their own iOS store.

Sure there is. Your parents (or other older relatives) retirement funds might be holding some Apple stock, and the managers of those funds thus want those companies in the portfolio to be profitable. Apple is currently doing better than most companies in terms of earnings, in part because their closed App Store is doing a lot better than the competition's more open app stores in terms of both revenue and customer satisfaction. If it ain't broke, don't fix it.

 

[babyj]

So while I can appreciate your argument against the 30% thing, it's by far NOT the ONLY issue in regards to Apple having the only legal method (now that jailbreaking is no longer legal once again on newer products) to install 3rd party software.

But you knew you could only buy apps from Apple when you bought the device, so why buy it if you're not happy with that condition? If being able to install any apps you wanted was important why not go for an Android device?

I could understand the argument, and would agree with it, if this was a condition that Apple had suddenly implemented (ie they had changed the deal). But they haven't, it's been like that since day one.

The grass isn't always greener on the other side either. The EU intervened to stop the English Premier League TV rights being bought exclusively by a single broadcaster to prevent a monopoly. So two broadcasters ended up with games, meaning anyone wanting to watch all the games had to pay two sports channel subscription fees instead of one. So greater competition but in reality, at a higher price for the consumer.

 

[Judas1]

The government defines a market far more broadly that this. You can't force GM dealers to sell new Ford cars, or put Ford engines in their cars, because there isn't a GM market. There is just a car market where both automakers compete, according to these legal market definitions.

If you have your own machine shop, you can mod your car yourself with your own parts. Same as having an iOS developers enrollment and knowing how to use source code.

So if you want Android apps, simply buy an Android device. Problem solved without silly government intervention.

Can an android app run on an ios device? No? Then its a different market. Your car analogy is ridiculous. All cars run on the same street and use the same gas. Its in the same market.

Sure there is. Your parents (or other older relatives) retirement funds might be holding some Apple stock, and the managers of those funds thus want those companies in the portfolio to be profitable. Apple is currently doing better than most companies in terms of earnings, in part because their closed App Store is doing a lot better than the competition's more open app stores in terms of both revenue and customer satisfaction. If it ain't broke, don't fix it.

Are you serious? Its not about the companies, but the consumers. Great to know we got you looking out for their interest.

----------

But you knew you could only buy apps from Apple when you bought the device, so why buy it if you're not happy with that condition? If being able to install any apps you wanted was important why not go for an Android device?

I could understand the argument, and would agree with it, if this was a condition that Apple had suddenly implemented (ie they had changed the deal). But they haven't, it's been like that since day one.

The grass isn't always greener on the other side either. The EU intervened to stop the English Premier League TV rights being bought exclusively by a single broadcaster to prevent a monopoly. So two broadcasters ended up with games, meaning anyone wanting to watch all the games had to pay two sports channel subscription fees instead of one. So greater competition but in reality, at a higher price for the consumer.

It about the public interest. The government is there for the public interest. They have the ability to legislate, ie, change the laws. If Apple is doing things against the public interest, the government can intervene. As for your sports analogy, if they love sports that much that they need two channels, then they should pay for t. Some people may only need 1 channel, or maybe 0 channels. Thats their choice.

 

[firewood]

Its in the same market.

Nope. Check the legal precedents. There's no finding on the books that 2 stores for similar products are 2 separate markets.

Its not about the companies, but the consumers. Great to know we got you looking out for their interest.

I am. Especially the consumer's who save money and invest some of it.

It about the public interest. The government is there for the public interest..

And the free market system has proven itself slightly to much better on average than Soviet-style micro-management of what's best in the public's interest.

 

[Rogifan]

I wouldn't call either entity awful, but I would call their practices questionable (and that is why lawsuits exist in the first place, is it not?)

We need only to look back at our recent history as human beings to realize that just because the masses applaud and support something, that doesn't make that thing right (and I am not limiting my reach to big business here).

I know this dead horse has been beaten to a pulp, but when Microsoft got hammered for monopolistic practices, their products wer flying off of shelves too. If the argument "but look! Our products are selling like hotcakes! Everybody loves us!" was enough then, today's playing field may have been very different. And that is why these laws are in place to begin with.

I don't see what the big deal is. You know when you buy an iPhone, iPad or iPod touch you have to go through the App Store (unless you jailbreak). If having multiple app stores is a big deal to someone than Apple iOS devices are not for them. Where is the monopoly when someone can easily buy an Android, Windows or BlackBerry device? It's not like Apple has 90+% marketshare in the smartphone OS space.

I've side loaded an app once onto a phone. That was 3 years ago when I had an HTC Android phone with AT&T and AT&T would not allow the SiriusXM app in the app store. With iPhone I've never felt the need to jailbreak because every app I want I can easily get in the App Store.

 

[Rogifan]

They set the price knowing Apple is taking 30%. If another store offered to sell them for 15% commission then the devs would be able to lower the prices by 15%.
You people defend Apple at all cost and it’s amazing.
If Sony said you can only buy PS3 games from Sony stores the retailers and customers would flip out! This president has to be in place before consoles go digital download only.

Maybe that would matter if apps in the App Store were expensive like console games but when someone is buying an app for $0.99 or $1.99 are they really going to care if they can get it 15% cheaper somewhere else? Most of the apps on my phone cost me nothing so why would I go anywhere other than the App Store to get them?

 

[Judas1]

Nope. Check the legal precedents. There's no finding on the books that 2 stores for similar products are 2 separate markets.



I am. Especially the consumer's who save money and invest some of it.



And the free market system has proven itself slightly to much better on average than Soviet-style micro-management of what's best in the public's interest.

They are not similar products. They are two separate products that only run on separate platforms. Hence separate markets. Free market is letting the consumers decide. If there were many iOS apps stores, then the consumer can decide which store they like best. If the Apple appstore is that store, it'll flourish and the other stores may go out of business. That's why it's called a free market. Right now, Apple is the only store. How is that a free market?

 

[gotluck]

Black market? Otherwise legal apps distributed through Cyda are legal. I have no idea why an app would have to be certified by Apple to be legal.

This discussion thread is about App Store apps. Whether the government will allow DMCA violations is a completely separate topic from monopoly misuse law.

So, is cydia (and its apps/tweaks) legal or what then?
not that it will have any effect on my personal use

I find the fact that consumers cannot access the root of a general computing device a disgrace to the consumer

maybe I should just buy android, however they need to be rooted as well...

PC's and Macs are 'unlocked', in my eyes these devices have essentially become "pc's" at least in a legal sense

mobile devices will eventually replace PC's for most people and this precedent set by iOS is sad it incites thoughts of the eventual censorship of the internet, stifling of innovation, and other such tactics of large corporations / government insisting on controlling one of the last real frontiers of the world.

 

[etrinh]

You guys are ridiculous. Apple is the one developing IOS. They give access to the API hooks via the developer program. Hey allow developers to have software (apps) on their device. IOS is their property. There is no altruistic notion of IOS being open for all. We didn't even have an App Store when the iPhone came out! Hell Apple doesn't allow OSX to be on other hardware

 

[lordofthereef]

Huh. I figured it had a legal basis.
.

That's the point. Plenty think it does. Plenty think it doesn't. We have courts for this reason, to decide first and foremost if there is a legal basis to pursue this further. I think there is, but as mentioned before I am far from an expert. Almost everything I know about law comes from these internets. I would dare to bet that most other commenters are in the same boat. Interestingly people are sitting here quoting Miriam Webster for definitions of the word "monopoly". With my limited legal understanding, Miriam Webster isn't the place to go for such definitions.

----------

So, is cydia (and its apps/tweaks) legal or what then?

They are pretty much accepted as legal, I believe, minus those apps and tweaks that aim to pirate content.

Interestingly, many people feel tethering apps and apps that block ads are legal too. I am not saying they are or are not, but they certainly aim to circumvent ways the content provider is trying to be monetarily compensated. For me these were always a gray area.

----------

Maybe that would matter if apps in the App Store were expensive like console games but when someone is buying an app for $0.99 or $1.99 are they really going to care if they can get it 15% cheaper somewhere else? Most of the apps on my phone cost me nothing so why would I go anywhere other than the App Store to get them?

I am not about to assume that what is best for me is best for someone else. As me ruined before, there are certainly examples of multiple successful app stores on other platforms. It's tough to say "nobody would use this" on iOS when we haven't ever had an example on iOS to compare it to.

I will say that plenty of people can and do by books, movies, and music from sources other than iTunes. A lot of times these other sources are cheaper. They also might offer options that iTunes does not, such as sharing books with friends; this is one such example of how a competing market or service can add value that isn't necessarily strictly monetary.

----------

It wouldn't have made it to the point where Apple asks for a dismissal? Lots of cut and dry lawsuits go to trial!

Based on the article, the lawsuits was files in 2011. That's at least one full calendar year ago. It obviously didn't get immediately dismissed as garbage. Defendants often ask for dismissals, I would think, when they feel they aren't in the wrong. How many other lawsuits did Apple ask for a dismissal that they ended up losing? What about winning? Unless you absolutely know you are in the wrong and wish to settle out, assuming that's even an option, I would think the first step a competent lawyer goes for is the dismissal, unless its thrown out of court from the get go.

At the end of the day, I fail to see how this isn't analogous to the Microsoft situation of the mid 90s. The argument that you can go android isn't good enough. One could also go Mac back in MS heyday, and that didn't matter. I would think that this is going to boil down to whether they can proof that there is potential for abuse under the current distribution system.

 

[lordofthereef]

The key word is business justification. Does the appstore no longer function if there's another store that also sells iOS apps? Sure that other store might become more popular and put the appstore out of business, but that's business. There is no justification why other companies aren't allowed to start their own iOS store.

The business justification that apple will undoubtedly use is "os security". Essentially they claim, and probably accurately so, that iOS cannot be as secure as it currently is if it is opened to another App Store. The questions is, at what consumer cost? I personally don't see a problem with allowing users to select through a dozen popups warning them about installing applications from third party sources. But it likely boils down to this all being more work for apple. And it's work they'd rather not do if they aren't forced to do it.

The AppStore, at its inception, was treading in muddy waters with their blocking apps due to duplicating functionality already available on the OS (for example web browsers). I don't recall if there were lawsuits about this, but Apples legally team surely realized this wouldn't fly as iOS adoption quickly ballooned.

 

[lordofthereef]

I don't see what the big deal is. You know when you buy an iPhone, iPad or iPod touch you have to go through the App Store (unless you jailbreak). If having multiple app stores is a big deal to someone than Apple iOS devices are not for them. Where is the monopoly when someone can easily buy an Android, Windows or BlackBerry device? It's not like Apple has 90+% marketshare in the smartphone OS space.

I've side loaded an app once onto a phone. That was 3 years ago when I had an HTC Android phone with AT&T and AT&T would not allow the SiriusXM app in the app store. With iPhone I've never felt the need to jailbreak because every app I want I can easily get in the App Store.

Listen. Laws exist to protect the consumer.

A car company can't void your warranty just because you adds after market parts (unless they can prove those parts damaged something, and even then it only voids the warranty on that specific damaged part). The law protects us consumers in this way. One cannot argue that the car company told me outright that if I add any aftermarket parts, my warranty will be voided, despite the law, and therefor I knew what I was getting into. (I realize this isn't a great analogous example, but my point is to show a case where laws were needed for consumer protection purposes because "knowing what you're getting into" wasn't a good enough answer)

To be clear, I agree that people know what they are getting into. That still doesn't mean that what apple is doing is legally acceptable. Anti monopoly laws exist to protect the consumer, regardless of whether the consumer is aware or cares that they are being abused or not. That is what this lawsuits is about.

At the end of the day, I likely won't stop using iOS regardless of how this ruling turns out. I've been using it for six years already. But that doesn't mean I can't embrace the idea of having some consumer protection.

Also, it's a wonderful thing that you see no personal need for another AppStore. Frankly, I don't jailbreak anymore either, because I don't see the rewards as outweighing the headache. But again, that's not the point in a case like this. I try not to be the person to say "this doesn't effect me, therefore I don't see why this is a problem", because if everyone thought that way, we wouldn't have the consumer
Protections that we do today.

 

[Asia8]

I'd like to see it changed.

In my case I've bought some software that is both available on iPhone and Android. If you buy the iPhone version first, you get the Android version free, however if you buy the Android version you need to first refund it, then buy the iPhone version to get both.

The reason is that they don't have the freedom to do what they need. Apple is too restrictive with their store policies and they have no alternatives.

 

[skier777]

this is like complaining that someone can't use sonicare brush heads on an oral-b electric toothbrush.......

No, its not like that at all. Its like saying that no one can manufacture a third party head that will fit on the oral-b, and furthermore, that you must buy the oral-b heads only at walmart.

 

[skier777]

Maybe that would matter if apps in the App Store were expensive like console games but when someone is buying an app for $0.99 or $1.99 are they really going to care if they can get it 15% cheaper somewhere else? Most of the apps on my phone cost me nothing so why would I go anywhere other than the App Store to get them?

I have an android, if I save 5 cents by buying it in the Amazon store, thats where I purchase it. If its 5 cents cheaper in the Google play store, I get it there. If its a free download I get it straight from the developers site if its available there.

If you went to mcdonalds and it cost 15% more to order from the left cashier than the right cashier would you ever go to the left? Just because its cheap doesn't mean that the consumer should just not worry about it.

And the fact of the matter is that not all apps are cheap. BarMax is the most expensive AFAIK at a grand; what kind of law student would willingly spend $150 extra for an identical product?