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

[Wildkraut]

C'est la vie, Apple!

They asked for it, they extremely abused the situation, instead of taking upfront the good cooperative way.

Now they will worldwide face the full consequences of being so stubborn and anti-competitive. 🤣

 

[klasma]

And again I ask you...how'd that work out? For you or developers?

I’m not sure what you’re insinuating. The downfall of Palm wasn’t caused by this state of affairs. The main cause was that their hardware stopped being competitive, and then HP who had bought Palm axed the project without urgent cause. For the ~10 years that it lasted, things worked out great for me.

 

[ksec]

I guess Macrumors comments never disappoint. 2023, these Walmart false analogy are still on going.

Please Apple just leave the UK. /s

 

[Zmmyt]

Please don’t. That will push the VisonPro even further up in price.

 

[I7guy]

Similar types of things can be said about a lot of monopolies, duopolies, etc. That's doesn’t mean these companies should be allowed to unfairly use their dominance/market power.

Apple hasn’t been found (for the most part) to abuse their natural monopoly.

 

[a m u n]

I will leave this picture here:

 

[I7guy]

That's up to the courts to decide but I clearly stated in my reply regarding alternative products/services "...doesn't NECESSARILY mean...."

In the case of my reply you responded to, I was simply pointing out that just because there may be alternatives to a product or service doesn't mean a company can't justly be declared a monopoly, part of a duopoly, having a dominant position, etc.

Sure we don’t know where this will end up or how it will end. Frankly if the devs dont like the App Store there are other ways to peddle their wares.

 

[aParkerMusic]

That's interesting but irrelevant. Apple is being sued because there are no alternatives. In most if not all of those cases, with the exception of Apple, you can acquire and install software (or product) using other means. Apple holds the unique position of saying "You have an Apple device? 100% of all developers absolutely, positively, must pay these extra fees to install any software on our device whatsoever, no exceptions."

And apple hides behind those stances in the name of security, but that is a seriously weak argument. Apple has always utilized security-by-obscurity instead of even attempting proper device hardening all in the name of maximizing profit. Sideloading would've saved them here, required Apple to toughen up security, and yes, diminish Apple's massive profits derived from all app sales that absolutely must fork over a percentage to Apple... on every. single. purchase.

Of course they're going to spin the messaging here to maintain their highest profit line item with operational costs so low (100mil a year to run the Apple Store, with nearly 17bil in profits). Big of them.

There are alternatives. There are other platforms consumers and developers can choose. Apple has done nothing to force you into the Apple ecosystem, you have seemingly endless alternatives.

It stretches the concept of monopoly to say a single entity can’t choose the terms of trade within their own walls, so long as they aren’t preventing entities outside those walls from freely competing and profiting.

If there is only one grocery chain in a state, and they use that position to charge exorbitant fees and vendors and customers have to say them because there are no alternatives, that’s a toxic monopoly.

If there are multiple grocery stores, and the aforementioned one charges higher fees from vendors and customers, and they lose business, then they’ll learn a lesson. If people still shop there, vendors and customers must have decided that it’s worth it.

Also remember, monopolies aren’t illegal. There are different categories that courts will explore to decide if the alleged monopoly was unfairly achieved. It’s not illegal for a company to gain a monopoly if they did it by being the only act in existence or if their products are just genuinely better. where illegality starts to come in is if they act in ways that prevent their competitors from competing in the market.

The iPhone is not a market, it’s a product within a market. And a part of the experience of that product is the App Store. The market in question is smartphones, and within each smartphone offering there are ways consumers can purchase apps. iPhone offers one way to do that, Android offers different ways. There are far more Android phones in the world and Apple has clearly failed to prevent that from happening, if they tried.

I also think a lot of the opposition to Apple falls apart when people try to say it’s merely the percentage charged that is the problem. How can someone say that when what they charges is in line with what everyone else charges? What rate should they charge? How does a court decide that?

Developers are just trying to see what they can get away with, and some contrarians are cheering them on. With it’s smaller market share in most regions, Apple doesn’t have the market share to stop their competitors from doing good business.

 

[spazzcat]

If developers did no longer bother to develop for Apple, the iPhone wouldn't sell either. In a sense they are really depending on one another but Apple still has the upper hand being a "Monopoly". Devs kind of have no choice but to suck up the fee if they want to stay in business

That fee paid for a lot of tools and subsidizes free apps. If the fee went away and everyone would have to start paying upfront for those tools you would see a lot less free apps in the store and the cost of apps would most likely go up.

 

[spazzcat]

I guess Macrumors comments never disappoint. 2023, these Walmart false analogy are still on going.

Please Apple just leave the UK. /s

The app store is more like a mall, and 30% is your rent to sell items in the mall.

 

[Sebalto]

It’s a big issue for me, but the sum of many other factors still make me opt for an iPhone. The problem is there is a duopoly of only two ecosystems (Android and Apple), but dozens of factors of why one would choose one over the others. The mandatory app store is just one factor of many. There is no platform that fulfills all my wishes, not even remotely, unfortunately.

I agree, the only thing one can do is go for the one that best fits your needs across the average. A business has to work along ergonomic principles - the best for for the greatest number.

 

[spazzcat]

I will leave this picture here:

View attachment 2237039

And some of these stores don't give you the tools to build your apps.

 

[Sophisticatednut]

I think it's more like a duopoly with Android but how these things are defined can vary.

In the UK, Apple/iOS has around 51% share while Google/Android has around 49%. For tablets, Apple/iPadOS has around 59% share while Google/Android has around 41% share. Whether a monopoly or duopoly, Apple has a dominant position in both markets. The success or failure of this lawsuit may depend on how Apple's dominance is defined.

It isn’t a duopoly. Android apps can’t run on iOS. Google play isn’t a competitor to the Apple AppStore.

Amazon bookstores is a competitor to Apple book store

 

[spazzcat]

Apple is the target of a $1 billion lawsuit saying they are abusing a dominant position by charging a 15% to 30% fee on in-app sales in the App Store.

What are the possible outcomes?

Do the developers simply want the percentage to be lower? But keep all the things consumers like about the built-in App Store?

Or do they want additional 3rd-party app stores to be allowed on the platform?

Or sideloading real apps from a website? (instead of pinned webapps)

We always hear about problems developers have with the App Store. But I'm wondering what the solutions will be to fix those problems.

Most of these "problems" are coming from the big players in the market that want to maximize their profits like every other company.

 

[Denzo]

I agree. But do the same to eBay and Uber.

You have restaurant owners, working 7 days a week, employing and managing staff, cooking and cleaning, ordering supplies and processing orders, paying staff wages, training, stressing and running business.. and UBER takes 30% for providing use of its app.

To me that’s just wildly unfair.

 

[spazzcat]

It isn’t a duopoly. Android apps can’t run on iOS. Google play isn’t a competitor to the Apple AppStore.

Amazon bookstores is a competitor to Apple book store

There are tools that will compile your app for both stores.

 

[Sebalto]

Apple do nothing in the design and development of an app that belongs to someone else. Apple provides all the tools and a place to put the app but the dev does all the hard work and Apple has the nerve to say they want a piece of that hard work for what? for Apple doing nothing!!!. Apple should be content on getting the yearly app store fee but no, they want everything and they are making damn sure they get it.

Yes it's almost as if the Appstore came into being all on its own, with no labour or capital expended on it. 🤔

 

[Sebalto]

That's not an alternative.

You can't use a historical decision and claim that as defense. Like "well, maybe you shouldn't move to Florida if you didn't like hurricanes.... you had a choice!"

When you live in the Apple ecosystem you have no choice. Apple wants to have a dominant position in the market, and you can't say once Apple has won that position, that the Apple app store is anything fair. It's not. And that's what you have here. There is no easy egress, there is no choice once you're in. And if you take this to its extreme you can easily see that. That's monopolistic behavior, which does not require a monopoly position.

Edit: I still stand behind those other options have choices once you're on those platforms. Apple is the only platform that - once you're on that platform - locks you in. Web-based apps? Don't make me laugh. That's why all the engines are Safari and that particular avenue has been tightened so much as to be pointless. It's not like you're going to see Candy Crush as a web app either.

Consumers do have a choice.

 

[Sophisticatednut]

Shopping malls have what is known as percentage leases in some cases, where you pay a percentage of sales in addition to rent. In addition, if you don't make any sales, the mall owner doesn't say, "No problem, you don't owe us any rent this month."

Also, some rental agreements require renters to pay for the costs of maintenance and grounds, which means if a tenant leaves the remaining ones now pay more since fewer tenants are sharing the costs.

Apple has bundled a lot of services into a fixed percentage that is only paid if a product is sold; and allow almost any developer access to the store as long as they meet the rules. I doubt you find many, if any, malls that offer teh same terms and let anyone roll their cart in and sell that meets their rules.

The problem you and everyone fails to see, if I don’t want to sell in Walmart for their fees and prices to reach my customer base, I can go to Costco down the street and sell the exact same thing to the exact same customer base.

iOS developers can only sell on apples terms. No it’s no buts. Zero options.

 

[OneBar]

Every app developer pay's Apple a yearly fee for using the app store and tools provide to develop apps and use the store and that should be enough for Apple but it isn't, they want more money and they way they do it is by only allowing one payment system if the dev's want to use in-app purchases in their app and that payment system is owned and run by Apple. Instead of including usage of Apple's payment system as part of the yearly app store fee, Apple worked out they could make bundles of money if they charge a percentage every time their payment system is used and what better way to make sure their payment system is the only one used? to write it in the sign up contract (Terms and Conditions) that only Apples payment system is allowed and no one else.

It still beggars belief how Apple is still allowed to get away with this. Shopping malls charge a yearly rent fee for individual shop owners to sell there goods in the mall. Market stall providers charge a yearly rent fee for stall holders to use a stall so they can sell their goods in the market. Neither the shopping mall or the market stall providers charge a fee for every sale made by individual shop or stall holder, so why should Apple be allowed run a system where not only do they get a yearly fee from every dev but also charge a fee for using a payment system devs have no choice but to use because Apple prevents other payments systems from being used. If shopping malls are not allowed to charge a fee on every purchase made from the shops within their mall, why is Apple allowed to charge a fee on all purchases made within their store?

Actually malls do charge a vendor based upon sales. You're just unaware of that because you've never seen the other side. A good friend of mine was the manager of our local Game Stop years ago and one of the reasons he quit was because the mall kept hiking their rent because they were successful. He got tired of constantly fighting with them over how much they were charging. Oh and if their sales dropped, the rent did not. Suddenly that 30% seems like a smart sliding scale that takes care of itself.

 

[OneBar]

The problem you and everyone fails to see, if I don’t want to sell in Walmart for their fees and prices to reach my customer base, I can go to Costco down the street and sell the exact same thing to the exact same customer base.

iOS developers can only sell on apples terms. No it’s no buts. Zero options.

I don't know any devs that only develop for single platforms. Literally every one of them I personally know develop for multiple because there aren't that many apps that only run on one platform.

 

[ashdelacroix]

If it weren't for Apple creating the App store in the first place, those developers would never have sold a thing.

And if it weren't for all the amazing developers, Apple wouldn't have so many amazing apps to sell to customers!

 

[OneBar]

And if it weren't for all the amazing developers, Apple wouldn't have so many amazing apps to sell to customers!

The devs only exist because Apple developed a platform for them to develop on. No platform, no iOS devs. They'd be programming for IBM or someone else.

 

[webkit]

But as you seemed to acknowledge above, the UK laws and courts could be wrong. And again, you seem to think there is a "right" way for this to be determined. But there is no universal "right" here.

I don't have all of the details of the case and potential defense so by "right" I was referring to the case being handled in a fair manner with fair rulings, etc. and reaching the appropriate conclusion based on UK laws and regulations. Hopefully that will happen but we'll have to wait and see how things progress in and outside of court. However this turns out doesn't necessarily have any relevance to the U.S., Canada, Australia, Italy, etc. nor should laws in countries outside the UK necessarily apply to the UK case.

 

[playtech1]

I find the clustering of online storefront pricing at 30% to be rather telling - looks to me that Apple (or perhaps Valve?) set an industry benchmark which others then followed. That seems more like oligopoly pricing than a competitive market setting the price, which given the size and social importance of these markets of course attracts the interest of regulators.

Compelling sideloading like the EU proposes (including alternative app stores) seems like the obvious remedy as it would expose the iPhone app store to competitive pressure, so Apple would have to set a price for listing on its app store that balances its costs and a fair profit margin against the possibility of competing alternatives on the iPhone.

I think Amazon, Netflix et al would move their apps from the App Store no matter what the price if there's a fee-free alternative, but Apple will also have to compete for the next tier down too to stay on its store: e.g. free to play games, complex business apps, etc. A Steam, Microsoft or Epic Games Store could be credible competition, but Apple will still have serious advantages - default install of the Apple App Store, early access to iOS developments, inertia, plus whatever hurdles it can throw in the way of sideloading. I bet the competition will have to charge devs a lower % to overcome those advantages.

Clearly there are pros and cons to compelling Apple to open up the iPhone, but I think these are overblown. We were lucky as a society that Macs and Windows were introduced as open platforms.