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

[Dremmel]

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! 😊

Seriously? There were LOADS of app stores before Apple's came along 😆.
AppForge
Handango
PocketGear
etc to name a few.
Psion was selling apps over a decade before the iPhone came out.
The iPhone would have died a quick death without third party apps.

 

[I7guy]

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.

That couldn’t be farther from the truth of the matter. It’s about not breaking something that isn’t broke - which now is a moot point. I’m all for those who want change go to android. It’s absurd that apple is forced to compete a market that they created. Personally I think the citizenry of the EU should all use android. You’d be begging for apple.

 

[I7guy]

[..].
The iPhone would have died a quick death without third party apps.

As an opinion, it’s incorrect.

 

[tripsync]

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.

market can decide to go to Android. for a monopoly to happen, there must not be a viable alternative.

Android is a viable alternative in all markets iPhone is in.

market can also decide to go Web which practically covers 100% of the market. example: porn companies have access to 100% of the market and were never allowed on iOS' app store.

 

[Motorola68000]

I believe the lawsuit will fail dismally.

Apple's charges are not excessive....they all are.

Perhaps Apple could make a few more changes to encourage developers in, but then if they encourage a dev in and its successful, is there much for a dev to moan about?

 

[Sophisticatednut]

So then your problem is with the existence of alternative OS's, not apps. As you say, the apps are now generally universally available. Meaning that DEVS are reaching near 100% of the marketplace with their apps.

We‘re not living in 2007 anymore.

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.

June 29, 2007 iPhone is released.

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

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

Apple released the AppStore on July 10, 2008.

So developers can manage by themselves if the want to without Apple holding their hand.

 

[AppliedMicro]

Apple has 43 percent. NVIDIA and GOOGLE have around high 60s. I’m talking about profits here

Could you please state what "43%" figure you're referring to and provide sources?

If we're talking about net profits, Apple has a net profit margin of about 24%. vs. NVIDIA's 18.5% and Alphabet's 21% and Meta's 19.5% (over twelve trailing months).

👉 Again, Apple has the highest profits - and that's despite them being largely a hardware manufacturer (where, by natures, it's more difficult, due to cost structure), as opposed Alphabet or Meta.

This narrative needs to stop. Apple has less profit margins than others in tech

What needs to stop is wrong claims. And random numbers ("43 percent") being thrown out, without properly referring to what they are ("profits" - what kind of profit?) or source.

 

[jlc1978]

The iPhone would have died a quick death without third party apps.

No one is claiming their isn't a symbiotic relationship between Apple and developer.

For me, the whole "30% is too high" argument fails because:

a. It's a lot less than developers used to pay to get distribution
b. Apple has removed much of the financial risk from marketing an app
c. Developers get to decide how much money the want to make from an app and Apple marks it up accordingly

I have no sympathy for subscription only apps that don't want to give Apple a cut and still want to be on the App Store; essentially telling Apple you owe it to us to assume all the costs of delivering the app and let us make all the money off of it.

If I had a say, subscription apps would have to pay a d/l and hosting fee per month, offset by any IAP purchases, to be on the App Store. You want to not give us a cut of subscriptions, fine. No free d/ls for you.

 

[Michael Scrip]

In fact, most of the discussion here and elsewhere keep quoting the 30% figure. That is radically misleading, since about 98% of developers qualify for the 15% rate. So, it's disingenuous to keep referring to the 30% figure. And at 15%, Apple's App store is one of the lowest rates for developers. Google offers 20% for small businesses.

And even though Google has allowed 3rd-party app stores and sideloading since the beginning... hardly any Android developers use them.

Almost every Android developer puts their apps in the official Google Play Store... despite its fees.

That says something.

 

[ender78]

Apple has total control of what goes on in it's app store but a car manufacturer is not allowed to have control over it's spare parts and servicing? something is very well screwed up here.

Different market. Every try to get critical components third party for modern cars. Let not pretend that an oil filter is comparable to a Face ID sensor or storage/memory for the phone. Can you get third party ABS systems for the car and still be honoured by warranty?

 

[ender78]

The iPhone would have died a quick death without third party apps.

An Apple acknowledges the contributions that developers make at every WWDC. They simply believe that they deserve 15-30% of all subscriptions and in app purchases for use of the ecosystem.

 

[Ethosik]

Could you please state what "43%" figure you're referring to and provide sources?

If we're talking about net profits, Apple has a net profit margin of about 24%. vs. NVIDIA's 18.5% and Alphabet's 21% and Meta's 19.5% (over twelve trailing months).

👉 Again, Apple has the highest profits - and that's despite them being largely a hardware manufacturer (where, by natures, it's more difficult, due to cost structure), as opposed Alphabet or Meta.

What needs to stop is wrong claims. And random numbers ("43 percent") being thrown out, without properly referring to what they are ("profits" - what kind of profit?) or source.

I have. I posted it earlier.

 

[webkit]

"violate antitrust laws" or "engage in anticompetitive behavior" is not a universal standard. Laws are different in different places, and the philosophy underlying your premise simply isn't widely held. That the EU and UK may define these activities more broadly than the rest of the world doesn't make it "true" that Apple is "anticompetitive" It just means that the EU and the UK have a political class that, imo, simply don't understand economic theory very well.

True, which is why U.S. standards may not apply to the UK or vice versa. It doesn't necessarily mean one country/regions is right or wrong. The (local) laws are the (local) laws.

And who says "Apple really wants to be contributing to a more open app market?" Why is that necessary? Again, in what way is the consumer being harmed here? There are millions of apps, many for free, many for $.99. And if Apple isn't serving the customers, there is the option of multiple stores on Android. Not just Google. It's disingenuous to say that there are only 2, Apple and Google, since on the Google side it's open in the way you're asking for. So, more than two options (right?).

I said IF. I was sort of playing on a previous comment you had made that "Apple would be contributing to a more competitive market by raising its fees..." My point was that if Apple wanted to be contributing to a more competition app market, they could do things like lift restrictions on alternative app stores, sideloading, etc.

 

[webkit]

We may be missing each other due to terminology. But I run a business in this space, and I'm telling you, Airbnb has a near unanimous lock on rental of private dwellings. Booking.com is the next closest option; I tried listing some of my properties on Booking.com, and over several months received zero reservations. Same with VRBO. In this space, private dwellings, Airbnb has an overwhelming domination of the market.

For context, I do about 3000 reservations a year on Airbnb.

According to two websites below, Airbnb has about 20% of the vacation rental market which would not make it "pretty much a monopoly" as you previously stated.

Airbnb Competitors: an Overview of the Rental Market | Hospitable

Airbnb competitors: platforms worth considering for your listing. We’ll assess the pros and cons VRBO vs Aribnb and booking.com vs Airbnb. Read today!

hospitable.com

Sites Like Airbnb: Top Airbnb Competitors & What Sets Them Apart

Want to know where to list your vacation rental? In this Airbnb Competitors Guide, we'll explore the top listing sites.

www.lodgify.com

Another website (below) put Airbnb's market share at 25.97% which is below Booking.com’s 34.57%. Again, this would not make Airbnb "pretty much of a monopoly."

Airbnb Statistics 2024 - By Demographic, Region, Revenue, General, Referral Traffic and Device Users

Airbnb statistics 2024: Airbnb facilitated 393 million bookings in 2022, reflecting a robust 31% surge from the previous year.

enterpriseappstoday.com

 

[webkit]

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

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.

That’s not entirely true. Additionally, Apple has agreed to things in order to avoid potentially going to court and being declared a monopoly or dominant company. Apple clearly has a dominant position in mobile OS.

 

[webkit]

market can decide to go to Android. for a monopoly to happen, there must not be a viable alternative.

Android is a viable alternative in all markets iPhone is in.

market can also decide to go Web which practically covers 100% of the market. example: porn companies have access to 100% of the market and were never allowed on iOS' app store.

"Viable alternative" can be vague. For example, there were arguably viable alternatives to Windows in the 1990s yet that didn't stop the DOJ from declaring Microsoft a monopoly. Regardless, how a monopoly is defined can vary case to case, country to country, etc.

 

[tripsync]

"Viable alternative" can be vague. For example, there were arguably viable alternatives to Windows in the 1990s yet that didn't stop the DOJ from declaring Microsoft a monopoly. Regardless, how a monopoly is defined can vary case to case, country to country, etc.

Well no, DOJ argued there was no viable alternative. They found that IBM would lose up to 90% of sales if they used OS/2 in place of Windows. Microsoft's own internal slides showed they were not concerned of any other competition except piracy.

Lack of viable alternatives were one of several core arguments into considering Microsoft as a monopoly.

Worldwide, Android has 80% marketshare. In USA, Android has 40% marketshare.

 

[jlc1978]

The 2nd article, too, is looking at vacation rentals as a whole. Go back and look at that chart. And I'll tell you, there's no way Booking.com has 35% of the market. You simply don't know the market. Booking.com is the hotel behemoth. They've only recently started adding private home rental.

Airbnb, in the space of private home rentals, has no peer. Nobody is even close. I'd guesstimate that Airbnb has 90% or more of this market.

As someone who rents a property on AirBnb I agree they are the big player and control the market.

 

[I7guy]

That’s not entirely true. Additionally, Apple has agreed to things in order to avoid potentially going to court and being declared a monopoly or dominant company. Apple clearly has a dominant position in mobile OS.

But nothing major has happened. That’s not to say nothing ever changes ever.

 

[Shirasaki]

I'm not defending any particular "cut" or number. I'm defending the market that has set that number. The number could be 50%, much like a lot of retail is, and the defense of it wouldn't be the number, but the market forces that either allow or curtail that number.

Any discussion outside of this, as though "30% for large developers, 15% for smaller developers" is objectively morally wrong, are simply based on nothing.

Regardless, it’s An act of defending this matter. Market itself doesn’t push anything. It’s all participants conscious or subconscious actions pushing the “market“ towards a direction. There is nothing to defend because early iOS devs feeling ok with 30% cut had their own fault to blame too.

 

[AppliedMicro]

I have. I posted it earlier.

Neither here, here, here, here, here, nor here on this thread, so it must be the LinusTechTips video posted here.

Linus only refers to the gross profit margin. Which usually include direct costs of manufacturing the products but exclude R&D costs. There is little surprise here: Apple (still) primarily manufactures hardware devices that are labour-intensive to make and consist of components sourced from many suppliers. They also sell and distribute them through retail channels (stores).

👉 You are comparing Apples to oranges here.

This thread is about the Apple App Store, which is part of their „Services“ business. If we take a look at their „Services“ business on its own, its gross profit margin is a whopping 72% (page 29 in their 2022 10-K filing). That’s higher than others by your own statement:

Apple has 43 percent. NVIDIA and GOOGLE have around high 60s. I’m talking about profits here.

(though you’re not really talking about profits here IMO, since these exclude R&D, selling, general and administrative costs).

 

[playtech1]

Companies agree to things for many reasons; for example, in civil suits, they may choose to settle instead of litigate to save money. This "dominant position" language you're using is key part of law in the UK, as I understand it. Again, who cares what one country defines as "dominant" position. There's the rest of the world and a history of standards.

I know they won't, but I really wish Apple would suggest they may just leave the UK and see how long these nuisance suits last.

The UK law on abuse of a dominant position is derived from EU law, so Apple would have to withdraw from the UK and EU to avoid being subject to it. Apple's shareholders like the profits that come from it's pricing approach, but I'm pretty sure they won't like it if it pulled out of its second biggest market because it might have to make some fairly modest adjustments to its business model.

 

[webkit]

That 20% is, as the article says, 20% of the vacation rental industry as a whole. That would include hotels. "It is estimated that Airbnb now accounts for upwards of 20% of the vacation rental industry as a whole and generates half of its revenue from listings outside the US.

The 2nd article, too, is looking at vacation rentals as a whole. Go back and look at that chart. And I'll tell you, there's no way Booking.com has 35% of the market. You simply don't know the market. Booking.com is the hotel behemoth. They've only recently started adding private home rental.

Airbnb, in the space of private home rentals, has no peer. Nobody is even close. I'd guesstimate that Airbnb has 90% or more of this market.

Where does it say vacation rentals include all hotel/lodging business? These various sites have postings for not just hotels but rentals for private accommodations/homes too.

Do you have industry data that shows Airbnb has 90% or more market share? Given that you work in the industry, I assume you would have access to or would have come across data to support your "guesstimate" number. I'd be curious to read it. The only data I've come across put its market share at around 20% to 25%.

Below is another example, The site states that “Airbnb has a market share of 18.9% in the private accommodation market, as of 2020." Everything I've come across seems to point to market share far less than your 90% figure but, again, if you have other industry data I'd be interested in reading it.

https://blog.gitnux.com/airbnb-statistics/

 

[webkit]

But nothing major has happened. That’s not to say nothing ever changes ever.

Some would consider Apple agreeing to lift restrictions on sideloading and/or third party app stores (at least in some markets) on future iOS versions as major. Anyway, it's antitrust laws and regulations that can help keep activities of dominant companies in check without necessarily having to go to court.

 

[I7guy]

Some would consider Apple agreeing to lift restrictions on sideloading and/or third party app stores (at least in some markets) on future iOS versions as major.

Ummm, they needed to do that because the law was changed in the EU and that has nothing to do with anything in the US involving any court case, which is what was being discussed. Unless something changes for the remainder of the world, only the EU iPhones will see those updates.

Anyway, it's antitrust laws and regulations that can help keep activities of dominant companies in check without necessarily having to go to court.

Sure motherhood and apple pie. In other news, water is wet.