Apple Faces Antitrust Probe Into Pre-Installed Apps, App Store, and More in Germany

[MacRumors]

Germany's Federal Cartel Office, the Bundeskartellamt, today initiated proceedings against Apple on the claims of anti-competitive behavior related to the App Store, its products, and other services, according to a press release.

The proceeding against Apple announced today will determine whether the Cupertino tech giant holds a "paramount significance across markets" and whether, through its ecosystem, Apple holds enough power to make it difficult for "other companies" to challenge it.

Andreas Mundt, president of Bundeskartellamt, issued the following statement on the initial proceedings:

We will now examine whether with its proprietary operating system iOS, Apple has created a digital ecosystem around its iPhone that extends across several markets. Apple produces tablets, computers and wearables and provides a host of device-related services. In addition to manufacturing various hardware products, the tech company also offers the App Store, iCloud, AppleCare, Apple Music, Apple Arcade, Apple TV+ as well as other services as part of its services business. Besides assessing the company’s position in these areas, we will, among other aspects, examine its extensive integration across several market levels, the magnitude of its technological and financial resources and its access to data. A main focus of the investigations will be on the operation of the App Store as it enables Apple in many ways to influence the business activities of third parties.

The press release is short on specifics on what the outcome of its investigation may lead to; however, the office says that if it determines a company to be of importance across markets, it may prohibit that company from "engaging in anti-competitive practices."

The office says it has received "various complaints relating to potentially anti-competitive practices," particularly related to the recent rollout of ATT or the App Tracking Transparency framework. In April, nine industry associations representing companies like Facebook and publisher Axel Springer filed an antitrust complaint to the federal office, claiming that Apple's ATT framework will severely hurt publishers and their bottom lines, deeming it a threat to their business.

According to the press release, another complaint that the office received related to the pre-installation of Apple's own apps on its devices. The office directly references section 19a of the German Competition Act, which states "the abuse of a dominant position by one or several undertakings is prohibited" as a potential clause that Apple may be violating.

Russia recently took the first major step against Apple for the pre-installation of its own apps, requiring the company to show users a screen to download government-approved apps during initial device setup. Similar legislation being proposed in the U.S. Congress would require Apple to give users the ability to delete all pre-installed Apple apps, instead of a select handful that users may currently delete.

The Bundeskartellamt also lists ongoing disputes regarding Apple's in-app purchasing system, which gives the tech giant a 30% commission of all purchases made and the restriction that apps may only be distributed on Apple devices through the company's App Store and not other third-party app marketplaces.

Update: Apple has provided us with this statement in response to the investigation.

Apple is proud to be an engine for innovation and job creation, with more than 250,000 jobs supported by the iOS app economy in Germany. The App Store's economic growth and activity have given German developers of all sizes the same opportunity to share their passion and creativity with users around the world while creating a secure and trusted place for customers to download the apps they love with the privacy protections they expect. Germany is also home to Apple's largest engineering hub in Europe, and a new €1bn investment in our European Silicon Design Center in Munich. We look forward to discussing our approach with the FCO and having an open dialogue about any of their concerns.

Article Link: Apple Faces Antitrust Probe Into Pre-Installed Apps, App Store, and More in Germany

 

[Psychicbob]

Ummm, that’s the main reason I buy Apple devices. It’s all integrated, I can see all my stuff across multiple devices etc. I buy into Apple because it IS ring fenced and controlled!

 

[W2u7Yw4HaD]

Why is this not a problem with cars? How come I can't install and sideload any apps inside my car system? Tesla doesn't allow me to install some kind of carplay app or even have perhaps a music streaming service of my choice.. Honestly, I'm not sure this is all in the best interest of consumers.. Yes, the competition is good.. But if the cars get taken over by virus's and starting killing people, is that ok also? I continue to think the walled garden is a good choice.. Even if it limits dev's in some ways.. You know when they used to sell retail software in stores, the stores/wholesale pipeline took over 75% of the profits.. And was that not a problem before??

 

[dabi]

Finally the governments around the world are going after the monopolistic dominance of the big tech. Long overdue.

 

[wanha]

Apple getting into services made perfect sense from a profit perspective, but it also created a massive antitrust liability for the company.

I'm not sure what all these governments are proposing is in the ultimate best interest of consumers (who really benefits from a blank phone or a significantly longer setup process?), but it's also clear that something needs to be done to reign in, or at least regulate, the current imbalance of power that these platforms enjoy.

 

[X--X]

Why is this not a problem with cars? How come I can't install and sideload any apps inside my car system? ...

The difference is, there is big diversity in cars and car systems, while in the smartphone market 2 companies control 99%. And one of those companies forces a cut of 30% (which is a lot) with no way to get around it.

Just imagine VISA would charge 30% for every transaction and there would be only 2 payment options in the world and only 1 working with you bank account.

 

[Agit21]

Make iOS like MacOS. Sideloading apps is GOOD, not bad.

 

[itsmeaustend]

Do these people want phones to come with 0 apps or what? How about we write our own OS while we’re at it?
Ridiculous.

 

[breather]

The difference is, there is big diversity in cars and car systems, while in the smartphone market 2 companies control 99%. And one of those companies forces a cut of 30% (which is a lot) with no way to get around it.

Just imagine VISA would charge 30% for every transaction.

15% Up to 1 million then 30%.
Also, other companies like Google does it to, right?

 

[itsmeaustend]

Make iOS like MacOS. Sideloading apps is GOOD, not bad.

Piracy is never a good thing.

 

[X--X]

[...] other companies like Google does it to, right?

Difference is, Google only charges for distribution truth its store, it doesn't force distribution truth its store.

 

[W2u7Yw4HaD]

The difference is, there is big diversity in cars and car systems, while in the smartphone market 2 companies control 99%. And one of those companies forces a cut of 30% (which is a lot) with no way to get around it.

Just imagine VISA would charge 30% for every transaction.

Amex charges small biz's 8%... Sure, it's not 30% that's true.. I'm not sure Apple will be able to wiggle out of at least allowing apps to charge via diff channel inside the apps.. It's defo simpler for the user to not have to register separately on each app and risk their stuff being stolen on the backend by poorly setup portal systems.. I still worry when the heavy hand of gov comes in, things might be worse off for consumers in the end..

I would be all for say asking users during the first install which email/calendar/browser app they want to use and it would download then.. Like MS had to do back in the day..

 

[sinoka56]

Piracy is never a good thing.

How about installing apps that are against App Store rules? Side loading is not just piracy.

 

[X--X]

I still worry when the heavy hand of gov comes in, things might be worse off for consumers in the end..

United States v. Microsoft Corp. - Wikipedia

en.wikipedia.org

Edit: Thanks "hdn" for down voting a Wikipedia article

 

[contacos]

I guess one way to avoid this is to add a few more screens to the on-Boarding. Super annoying, but convenience was never in their focus. Just look at these annoying cookie banners. Just picture additional screens like „Which browser would you like to use? - list of options“ Which music service would you like to use? - list of options, etc. and whatever you decide to pick, will be chosen as it’s default option

 

[lorca2770]

Finally the governments around the world are going after the monopolistic dominance of the big tech. Long overdue.

First, learn and read what a monopoly is, then talk. Don’t let your preferences and sympathies dominate your reasoning. There are 1000’ of companies manufacturing phones that you can choose from.

 

[X--X]

There are 1000’ of companies manufacturing phones that you can choose from.

Mobile Operating System Market Share in Germany - May 2021

Android 64.65%

iOS 34.34%

Samsung 0.93%

Windows 0.03%

BlackBerry OS 0.01%

Other 0.01%

 

[chucker23n1]

Why is this not a problem with cars?

For starters, there are more than two car companies, and you can drive your Toyota car on the same road as a Ford.

You know when they used to sell retail software in stores, the stores/wholesale pipeline took over 75% of the profits.. And was that not a problem before??

It was, but also, there was plenty of competition.

 

[Larsvonhier]

#Neuland

Nothing more to say as a German.

 

[LFC2020]

Russia, Germany, who’s next? 🤔

Don’t like it, don’t use it, android is that way 🤷‍♂️👉

 

[SurferPup]

FFS. Man soll nicht reparieren, was nicht kaputt ist! Can Governments stop messing with my Apple products and how Apple runs their business. I like it as it is.

 

[chucker23n1]

I guess one way to avoid this is to add a few more screens to the on-Boarding. Super annoying, but convenience was never in their focus. Just look at these annoying cookie banners. Just picture additional screens like „Which browser would you like to use? - list of options“ Which music service would you like to use? - list of options, etc. and whatever you decide to pick, will be chosen as it’s default option

Yup.

I think that's the most reasonable compromise. Add a setup screen where you get to pick default apps. Randomize those apps, and either have them curated (that comes with the problem: who does the curation?) or perhaps auto-generated based on App Store popularity.

Something like this, but for more types of apps:

 

[chucker23n1]

Do these people want phones to come with 0 apps or what?

No, they want to encourage more choices. Right now, almost everyone ends up going with Safari on an iPhone, and Chrome on an Android phone.

Whether this is a big problem, and whether their approach is right, are more complicated questions. But their job as antitrust office is to evaluate that.

 

[amartinez1660]

Ummm, that’s the main reason I buy Apple devices. It’s all integrated, I can see all my stuff across multiple devices etc. I buy into Apple because it IS ring fenced and controlled!

Yes, I’m on the same train. “We have received complaints” they say, did you complain about the ecosystem? Because I didn’t and don’t know many that willingly and knowingly got into it and then complained.
What I hear complains is about buggy software, the battery drains here or there at times, etc… would rather governments get their hands for that first.

The difference is, there is big diversity in cars and car systems, while in the smartphone market 2 companies control 99%. And one of those companies forces a cut of 30% (which is a lot) with no way to get around it.

Just imagine VISA would charge 30% for every transaction.

Is that an apples to apples comparison? ApplePay doesn’t charge 30% for each transaction either.

Steam, GoogleStore, MS Stores, online games stores Switch, PSN, Xbox, etc all charge 30% by default.
Apple Store starts with 15% for less $1M revenue then 30% then back to 15% for over subscriptions running over a year. Epic is the lowest currently.

BestBuy, GameStop and any other retail store, if history is still unchanged, maybe all charge 30+% too.

This makes it also sound that if there were a lot more diversity then it would be ok to charge a lot, so maybe a solution is to introduce or force smartphone diversity and then it would be ok for the companies to put their desired charge levels?

Whatever may happen, it feels quite uneasy in my opinion all this forcing of markets around.

 

[LFC2020]

Yup.

I think that's the most reasonable compromise. Add a setup screen where you get to pick default apps. Randomize those apps, and either have them curated (that comes with the problem: who does the curation?) or perhaps auto-generated based on App Store popularity.

Something like this, but for more types of apps:

View attachment 1795955

If it ain’t broke, don’t fix it 😁 if people want spyware and malware, android is over there 👉