Apple Facing $1 Billion UK Antitrust Lawsuit Over App Store Fees

[I7guy]

I feel like some people in this thread would have welcomed it if Edison owned the power lines and we were only allowed to plug in approved electrical appliances, the manufacturers of which needed to pay Edison a 30% fee to approve them as not electrocuting anyone...

The difference here is that android can be used to make a call. Android has nav apps, game apps and according to some MR posters more capabilities than iOS.

That’s not the case with power lines.

 

[Ethosik]

"Apple calculated a fully burdened operating margin for the App Store as part of its normal business operations and that this calculation was largely consistent with Epic’s expert witness’s estimates of operating margins to be over 75% for both fiscal years 2018 and 2019"

https://assets.publishing.service.g...39f799fed/Appendix_C_-_financial_analysis.pdf

This is much higher than the (albeit overall) operating margins of 26% for Alphabet or 15% for NVIDIA.

Apple has 43 percent. NVIDIA and GOOGLE have around high 60s. I’m talking about profits here. People keep saying Apple charges too much just to make a profit.

 

[webkit]

Let's let the market decide. It's really the only way to efficiently run a market.

By restricting alternative app stores and sideloading on a dominant mobile OS platform like iOS, Apple is restricting the market's ability to decide. They are essentially forcing app developers to go through their App Store if they want to access that significant market.

In my industry, Airbnb is pretty much a monopoly. There are other options but I choose not to use them. For strategic reasons, I've even chosen to NOT open my own website with payment processing to compete with Airbnb for a portion of my reservations.

How is Airbnb pretty much a monopoly when it is estimated that they only have around 25% or less of the vacation rental market and a much smaller percentage than that of the overall lodging market?

 

[webkit]

But everybody has a choice to be in the Apple Eco System and everybody knows, before they make that decision what's involved.

So what you are saying is that that monopolies or dominant companies should essentially be able to do whatever they want since their customers chose to do business with them? PC makers, Netscape, software developers, etc. had no right complaining about Microsoft’s anticompetitive behavior in the 1990s since they had already agreed to do business with them?

 

[webkit]

Apple is not a monopoly, and in essence you’re saying if a company is too big it should be treated differently (punished for its success). The only reason governments are after Apple is because they want access to all the data on those devices. Everything else is a smokescreen. First they tried CSAM and when that didn’t work now they claim antitrust.

Monopolies or dominant companies should absolutely be treated differently because their actions can have a much greater impact on a particular market including potentially stifling competition, innovation, having unfair pricing, and so on. That's essentially why we have various antitrust laws and regulations. They're not really about small companies whose actions may have little to no impact on a market or competition.

 

[I7guy]

Monopolies or dominant companies should absolutely be treated differently because their actions can have a much greater impact on a particular market including potentially stifling competition, innovation, having unfair pricing, and so on. That's essentially why we have various antitrust laws and regulations. They're not really about small companies whose actions may have little to no impact on a market or competition.

Apple is not a monopoly and in the US there are literally dozens of smartphone manufacturers and multiple app stores.

Apple does have a natural monopoly on their products and services and now through several lawsuits apple has prevailed except for one anti-steering provision.

So I agree with your comment at the most general of discussion points - like saying water is wet. But as far as apple in the US the courts did not find them as charged.

 

[I7guy]

So what you are saying is that that monopolies or dominant companies should essentially be able to do whatever they want since their customers chose to do business with them? PC makers, Netscape, software developers, etc. had no right complaining about Microsoft’s anticompetitive behavior in the 1990s since they had already agreed to do business with them?

Companies do engage in anticompetitive behavior. But because companies do doesn’t mean apple does or did with regard to the App Store. One stroke from the brush doesn’t cover everything.

 

[OneBar]

Sideloading isn't the only option on android.

Everything sideloads on Android, essentially. But I didn't even say that.

There are multiple stores available across all the devices. The Google Play store is not the only store. So if you're going to try to spin this as if it's "valid store" vs "hacky sideload" that's not valid.

Did I say that? No I didn't.

And yes, I don't disagree that sideloading is bad. That's not the argument. On IOS, there is one store. All apps on IOS only go through one store. That's it. Full stop. If you want an app on IOS you go through the Apple app store and pay their fee.

And what does multiple stores selling the exact same app from the exact same devs get you? Nothing except more apps for stores taking up room on your device and more time wasted thinking you're going to get some kind of deal. The app costs what the app costs and a million stores online isn't going to make it cost less.

Android doesn't have to allow sideloading for any reason whatsoever. There's nothing short of the monopolistic practices that creates that prevents them from doing the same as Apple.

You mean how they charge everyone the same as Apple for APKs (or whatever Android version is) to load apps onto their device? Yeah. No one complaining about that, though.

 

[bluecoast]

Yes the reason and the only reason, is because Apple won't allow them back door access to our data!

Weird whenever this topic comes up on the forums, how many people spring up to defend apple.

Apple have many fine attributes about them, but in this instance they are just trying to extract as much cash as they possibly can with no especially redeeming motive about it, no matter what PR screen that they attempt to distract people with.

And most journos who follow Apple closely like Jason Snell are simply no longer a fan of Apple’s business practices here.

 

[Ethosik]

Weird whenever this topic comes up on the forums, how many people spring up to defend apple.

Apple have many fine attributes about them, but in this instance they are just trying to extract as much cash as they possibly can with no especially redeeming motive about it, no matter what PR screen that they attempt to distract people with.

And most journos who follow Apple closely like Jason Snell are simply no longer a fan of Apple’s business practices here.

This narrative needs to stop. Apple has less profit margins than others in tech. So “trying to extract as much cash as they can” is just an extreme statement. They aren’t doing it for insane profits. And obviously they will maximize when they can. That is what businesses do. Even your previous Google or NVIDIA or AMD or Intel or ANY OTHER COMPANY.

 

[Michael Scrip]

The IRONY here is that multiple studies have shown that developers tend to make much more money on the Apple App store than through other outlets. And still, there's this chorus on here that Apple is harming Devs. It's not. It has created a valuable outlet where Devs reach a better market and make more money.

Excellent point.

And to boost your point... we gotta remember that there are some developers who make apps only for iPhone.

They might not like every decision Apple makes... but they're certainly not in a hurry to start developing for Android.

 

[VulchR]

...
Pas on what cost? The development of a different product for a different market?
...

Simples. Apple charges 30% commission. A developer wants a target price for their iOS app - call it x. The developer charges (1.3)(x) to the consumer in the App Store. Problem solved, without government interference and frivolous lawsuits, and without the destruction of the Apple ecosystem.

 

[tripsync]

Or Bear uses something else,

They can use something else.

no. everything else costs additional money. cloudkit is virtually free for all iOS developers.

 

[webkit]

Apple is not a monopoly and in the US there are literally dozens of smartphone manufacturers and multiple app stores.

The issue here is with mobile OS market where app stores reside and there are only two major players in the mobile OS market, Apple and Google. Apple is a dominant company in that space and an argument is that they stifle competition by restricting alternative app stores and sideloading.

Apple does have a natural monopoly on their products and services and now through several lawsuits apple has prevailed except for one anti-steering provision.

Again, your definition of a "natural monopoly" is off as a natural monopoly is not about Honda having 100% of the Honda car market, Apple having 100% of the Apple iOS market, etc. Monopolies, including natural monopolies, are about a company's market level (e.g., automotive market, mobile OS market, etc.) share.

 

[webkit]

Again and again and again, I simply don't accept your premise.

Again and again and again, I simply don't accept your premise. Two dominant companies (Apple and Google) in the mobile OS market should not be allowed to violate antitrust laws and regulations or engage in anticompetitive behavior that may stifle competition. If Apple really wanted to be contributing to a more open app market, they would do things like lift restrictions on alternative app stores, sideloading, etc. Instead, it looks like antitrust laws and regulations are needed to try to get them to "behave" better.

 

[webkit]

Actually, this becomes a good analogy for this discussion. Airbnb may only have 25% of the entire lodging market, which includes Hotels. But they have a much bigger percentage of the short term rental market (homes, apartments, etc). It's very analogous to Apple's position in the mobile space. While there are other players in the short term rental game, the overwhelming majority of consumers are using Airbnb to book their short term rentals. So, if I want to rent my units to that market, I have to use Airbnb.

Would it be your position that I should be able to demand that Airbnb allows me to use their platform, but to then substitute my own payment processing for a rental booked through their site? That Governments should force Airbnb to set their fees at specific levels?

I stated in my post that Arbnb has around 25% of the vacation rental market, not 25% of the entire lodging market. As I also stated, their percentage of the entire lodging market is much less than 25%. You claimed they were "pretty much a monopoly" which is simply untrue as even in the narrower vacation rental market they only have around 25% share. As such, Airbnb is not relevant to a monopoly, duopoly, etc. discussion.

 

[jlc1978]

Car manufacturers used to have exclusivity with their cars, spare parts and servicing in that who can have the cars, who can have spare parts and who can do the servicing but the courts told them they cannot do this because it is ant-competitive and thus they cannot control who they sell cars and parts to and restrict who can do the servicing

The car market evolved much differently than the mobile app market; but even so you're seeing more closed systems in that headlights are now custom, in many cases, to the specific model, servicing requires buying diagnostic tools from the manufacturer, all contributing to a more closed ecosystem.

And car dealers can decide on different markups - a jobber gets a better price than someone walking off the street for the same part..

I feel like some people in this thread would have welcomed it if Edison owned the power lines and we were only allowed to plug in approved electrical appliances, the manufacturers of which needed to pay Edison a 30% fee to approve them as not electrocuting anyone...

Technically, all electrical appliances are supposed to be tested by one of a few testing organizations and only then allowed for sale, so you do pay a % for using an electrical appliance; such as in a closed ecosystem.

Of course, many unscrupulous companies simply fake the approval, akin to being able to side load pirated apps in a more open ecosystem.

By restricting alternative app stores and sideloading on a dominant mobile OS platform like iOS, Apple is restricting the market's ability to decide. They are essentially forcing app developers to go through their App Store if they want to access that significant market.

That's the key - Apple has created a very profitable ecosystem that developers want to tap into; but greed makes them want even more. The need to carefully consider what they wish for; Apple could unbundle pricing making it more expensive up front to take an app to market on their store.

Again and again and again, I simply don't accept your premise. Two dominant companies (Apple and Google) in the mobile OS market should not be allowed to violate antitrust laws and regulations or engage in anticompetitive behavior that may stifle competition. If Apple really wanted to be contributing to a more open app market, they would do things like lift restrictions on alternative app stores, sideloading, etc. Instead, it looks like antitrust laws and regulations are needed to try to get them to "behave" better.

I'm not sure the proposed "fixes" will make life better for consumers or developers. Sideloading will make it easier to pirate casually, costing developers money. Developers, following the Android model, will have to find other ways to make a living and will pivot from purchase once to subscribe models to try to get a reliable source of income. I'm sure everyone here in favor of forcing Apple to open up would rather pay an annual fee than buy a program outright.

I suspect, while competing app stores will spring up, legit and pirate, they will lack the same profit potential as Apple's nor offer all the same services as Apple; and may not charge all that less of a commission. As a result, Apple will still be the App Store of choice.

Apple, now that there is competition, will be freer to set its own rules and fee structures to keep making money like before. An interesting idea is for Apple to copy SetApp's approach and create an iOS version of Apple Arcade.

 

[I7guy]

The issue here is with mobile OS market where app stores reside and there are only two major players in the mobile OS market, Apple and Google. Apple is a dominant company in that space and an argument is that they stifle competition by restricting alternative app stores and sideloading.

Yes, anyone can make an argument. But this “argument” hasn’t been held up in courts as far as apple is concerned.

Again, your definition of a "natural monopoly" is off as a natural monopoly is not about Honda having 100% of the Honda car market, Apple having 100% of the Apple iOS market, etc. Monopolies, including natural monopolies, are about a company's market level (e.g., automotive market, mobile OS market, etc.) share.

In the United States there hasn’t been any ruling about the App Store other than an anti-steering provision… tempting as it maybe to make it more than that.

 

[AppliedMicro]

But everybody has a choice to be in the Apple Eco System

Not everybody does. As a developer of, say, a gesture-based dating application and messenger, you can‘t just say „Oh, I‘m gonna be on one platform only“.

in essence you’re saying if a company is too big it should be treated differently (punished for its success)

If it’s too big and influential, its business should be regulated. Happens all the time. It’s not about punishing success - it’s about balancing the interests of other stakeholders (developers, consumers). Cause once companies have reached a certain monopoly power, they could otherwise disregard other interests than maximising profit.

The only reason governments are after Apple is because they want access to all the data on those devices. Everything else is a smokescreen. First they tried CSAM and when that didn’t work now they claim antitrust.

Anti-government rhetoric to appeal to the privacy-minded.

It’s not the same parts and authorities of government that are seeking access for law enforcement purposes and third-party developers.

Considering how slow governments and bumbling governments are in regulating big tech (or most emerging developments in society, really), the suggestion of a coordinated „evil master plan“ to gain access to data through the backdoor of competition law is laughable.

It doesn’t even make much sense from a technological point: if sideloading were mandated, anyone could just program, compile and/or install a messaging application that government does not have access to.

The tighter Apple’s grip on installable apps, the easier it is outlaw apps or content governments don’t like. Telegram is testament to that, in how certain groups are not available in installations from the App Store (but are available in the unfettered download from their web site).

Yes the reason and the only reason, is because Apple won't allow them back door access to our data!

The regulators/governments have alternative motives, ie; Apples refusal to give them back door access.

It’s hard to argue against conspiracy theories. They’re all are rooted in conspiracies and „alternative motives“ that remain secret or hidden.

And it’s pointless to argue with conspiracy theorists. They’ll never back up their claims with observable fact or solid reason.

 

[I7guy]

Not everybody does. As a developer of, say, a gesture-based dating application and messenger, you can‘t just say „Oh, I‘m gonna be on one platform only“.

That’s the devs issue. They chose the wrong platform. Government interference is not required for free market mistakes.

If it’s too big and influential, its business should be regulated. Happens all the time. It’s not about punishing success - it’s about balancing the interests of other stakeholders (developers, consumers). Cause once companies have reached a certain monopoly power, they could otherwise disregard other interests than maximising profit.

No it shouldn’t. We disagree.

Anti-government rhetoric to appeal to the privacy-minded.

It’s not the same parts and authorities of government that are seeking access for law enforcement purposes and third-party developers.

Considering how slow governments and bumbling governments are in regulating big tech (or most emerging developments in society, really), the suggestion of a coordinated „evil master plan“ to gain access to data through the backdoor of competition law is laughable.

I don’t believe in conspiracy theories, but when the stars align they align.

It doesn’t even make much sense from a technological point: if sideloading were mandated, anyone could just program, compile and/or install a messaging application that government does not have access to.

I’m sure some type of kill switch would be required for apple to implement.

The tighter Apple’s grip on installable apps, the easier it is outlaw apps or content governments don’t like. Telegram is testament to that, in how certain groups are not available in installations from the App Store (but are available in the unfettered download from their web site).

And this is the long run is a good thing.

It’s hard to argue against conspiracy theories. They’re all are rooted in conspiracies and „alternative motives“ that remain secret or hidden.

And it’s pointless to argue with conspiracy theorists. They’ll never back up their claims with observable fact or solid reason.

There’s little solid reason in these conversations. Mostly opinion.

 

[playtech1]

Technically, all electrical appliances are supposed to be tested by one of a few testing organizations and only then allowed for sale, so you do pay a % for using an electrical appliance; such as in a closed ecosystem.

Of course, many unscrupulous companies simply fake the approval, akin to being able to side load pirated apps in a more open ecosystem.

Although my analogy was meant to be tongue in cheek, I am pretty sure devs would prefer to send their apps to one their chosen testing company to get the software equivalent of a 'CE' mark for a relatively small time and materials fee, than give Apple 30% of every sale. I also think many manufacturers selling in the EU are allowed to self-certify.

 

[Sophisticatednut]

Right...and you have the choice to support the various business models or not. You're not proving anything. The Mac OS started in a time with much less concern about security and privacy. And IOS exists on a device that is mission critical; you can't, for example, have apps that diminish the functionality of the phone. When it rings, it has to ring. And Apple made the decision for IOS to build it as a walled garden.

You'd have to argue that there are zero benefits to a walled garden. But then you'd have to say why my preference for a walled garden is wrong. But then we're squarely in the realm of the market place. I want a walled garden, you don't. So what to do? Let the market decide. Which it is clearly and functionally doing.
No, you simply don't. And this misunderstanding is so relevant to the entire discussion. You have no right to tell Amazon, Elon, or anyone that they have to sell your product and that you get to decide on what terms.

Have you ever developed and sold a product? This idea that you have the "right to do business" and to use whatever stores/delivery systems you want to do is so completely wrong that I don't think you have any grasp over how market economies work.
For example, look up "slotting fees" as charged by most grocery stores. Did you know that most grocery stores charge products for premium shelf space? This is why some products are stocked at eye level and some are on the bottom shelf. Or some featured in the checkout aisle.

You have no "rights" to tell any store they must carry your product at your preferred fee.

The "Rights" crowd baffles me.
I do understand this. And you can sell your own products. There are a lot of phone and digital store creators. You can create a phone and create a store to sell to all the customers you want. Just as many other entities do.
You are simply asking Apple to operate their business in a way that you want. But you don't own the business, and how you've ended up with this idea that Apple business practices are best determined by governments and laws baffles me. Because you want it to be that way doesn't make it so.
I simply reject the idea that Apple is a monopoly that should be regulated. And this nonsense about duopolies is just even further down that road.
And so we disagree. You want to have Government take sides. I want the market to determine. That's not a reconcilable position. And so far, most courts have determined the market is capable of this. I have no doubt that some countries will pass laws simply to enforce Apple to operate in certain ways, despite any facts.

How Are you able to make such a wrong interpretation? Amazon doesn’t have a right to tell a separate business who and how they sell their goods or communicate with there Custodes customers outside of amazons store.

Doing business= freedom of association.
Not that I have a right to tell a store to sell my product, but the right for me to sell the same product somewhere else.
No I can’t create a phone(different market) or have a store( impossible to use without jailbreaking)
It’s when apples businesses practices prevent market competition by gatekeeping how customers and businesses interact.
Apple is a monopoly, but that’s not why they are regulated. Having a monopoly is 100% legal. Preventing competition on the other hand isn’t.
Yes the government takes the side of the market when companies intentionally hamper competition

UK law is wrong on many things, especially the changing of the definition of a monopoly, by Common Law, which is basically an interpretation of actual law, by a judge who answers to no body and can not be removed from his office, regardless of how many bad laws he passes
Exhibit C. Developers on Mac OS, make far bigger profits through the App Store, then the ones side loading 😊

Yet game developers choose to abandon it and sell on steam instead, so perhaps not that profitable.
And Uk law is wrong according to what? These laws have existed for 30 years. Same legal system as the U.S. and just as flawed.

They absolutely own their customer base; just like a Mall owns the right to sell to those customers who enter. You think you could just take a table inside a mall and sell your product with no authorization from the Mall? If you want to reach the customers, while they are in the mall, then you have to contract with the mall.

If you want to reach Apple's customers, while they are in the Apple ecosystem, you have to contract with Apple.

You're free to find all the customers you want by any other means. But you're not free to dictate to Apple the terms of using their store to sell your products.

And if I want to reach the customer outside the mall? This is the conundrum. Currently it’s impossible to reach the customers inside the mall. With a few exceptions strange exceptions.

Amazon is allowed to have their entire store inside the apple mall and sell their goods for free. Uber can provide their transportation services for free to the mall customers.

Netflix and Disney can show their movies for free to the mall customers. If someone in the mall needs to order food they can sell it for free.

If I need some ticket for a plain or train, they can sell it inside the mall for free.

And they can choose to use apples services and pay a 15-30% fee or have their own solution and pay 0% for having the ability to sell their services.

Steam can even sell games inside the mall for free.
And they are all allowed to do that outside the mall even. But for some reason everyone else can’t communicate or sell their services outside the mall or anything as everyone

Back to Costco...the example you used before. Do you have a right to the products that Costco sells? They require a membership fee to be able to shop in their store. If you don't want to pay the fee, do you think you have the right to buy those products?

I have the right to sell my products to Costco customers outside of Costco. And I have the right to buy things not sold in Costco that I can use with my Costco products.

Ahhhh Ok, so the IOS developers haven't got the skill set to develop for another operating system and somehow Apple is responsible for that? 🤣
They can stop being IOS developers and ply their trade on Android, besides both stores offer tools that make the apps compatible with the other

They have the skills, but that would be a completely different market. Considering no iOS user can buy their product.

Hmm, there were no third party apps, when the original iPhone was launched and over 6 million bought it, why? because the phone was revolutionary and people wanted it, the phone not the apps! 😊
I have never bought a phone, based on what third party apps are available on it 🤣

June 29, 2007 iPhone is released.

21 August 2007– Installer app is released by Nullriver, first apps are distributed

28 February 2008– Cydia is released as an open-source alternative to Installer.app

Apple released the AppStore on July 10, 2008. 5 months after cydia and 11 months. Almost a year after the installer app. so it sold 6 million units with only third party apps available and doing perfectly fine with zero help from Apple.

 

[AppliedMicro]

The IRONY here is that multiple studies have shown that developers tend to make much more money on the Apple App store than through other outlets. And still, there's this chorus on here that Apple is harming Devs. It's not. It has created a valuable outlet where Devs reach a better market and make more money.

The IRONY here is that the people claiming Apple’s superiority seem to be most outspoken and opposed against the existence of alternatives.

If the App Store is so superior, alternatives aren’t to fear - customers and devs alike will continue to love Apple and buy/sell on the App Store. And the threat of competition will encourage Apple to improve their service even more.

 

[tripsync]

Some weird arguments here.

Tesla owns 70% marketshare of EVs but does not allow 3rd party app developers. Are you saying by law, Tesla should open up their OS for any developer to sell apps for the car OS?

What about my Samsung Smart TV? Amazon Fire Stick?

What about Alexa devices? HomePod?

 

[AppliedMicro]

Hmm, there were no third party apps, when the original iPhone was launched and over 6 million bought it, why? because the phone was revolutionary and people wanted it, the phone not the apps!

We‘re not living in 2007 anymore.

I have never bought a phone, based on what third party apps are available on it 🤣

You’re a special guy/girl then.

Most people want and „need“ certain apps.
And most the most popular apps (and types of apps) are available on both Android and iOS.
With virtually no other smartphone sold anymore that doesn’t run on ome of the two.