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

[webkit]

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

Their natural monopoly?? I don't know how the UK may define things but I wouldn't necessarily call Apple a "natural monopoly" as that term is typically associated with public utilities which are often heavily regulated in order to allow them to have exclusive or near exclusive rights/access to certain local (e.g., city or state) markets.

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.

This again goes back to my point that just because there are product/service alternatives doesn't mean a lawsuit like this isn't potentially justified or that a company shouldn’t be declared a monopoly, part of a duopoly, etc.

 

[AtomicDusk]

And I love how Apple is exactly in line with almost all other digital marketplaces - I wonder why they're going after Apple and not Google Play, Samsung, Xbox, Playstation, Sony, Microsoft....

It almost looks like they're looking for a vulnerable domino to start the chain reaction.

 

[needsomecoffee]

I am not a fan of side loading. But if this is the only solution to avoid the monopoly, then it will have to exist.

This. This. This. Apple should allow & endorse side-loading. Very few consumers will want a 20% lower price for their new install vs. what the "added value" the Apple store provides. And these "monopoly" issues go away.

Note: Since I hate the way Apple will not enforce trademarks in the App Store, and I primarily use apps from highly-valued TM'ed providers, I personally stand to gain a lot from side-loading. I am terrified of the App Store -- wading thru the scam apps looking for the real one terrifies me. I could not care less about the 30% affecting higher prices.

Course with side-loading, maybe Apple will do some work to make the App Store better. Win-Win-Win (a rare outcome).

Sadly being a monopolist is the easiest route to profits, and upper managers typically love "walled gardens" versus "we can win in a competitive market" solutions, so Tim & Co. will fight to the death.

 

[JamesMay82]

They knew the charges going through so you cant really sign up to something and then complain about it.

 

[TheLisnakFactor]

Good time to repost this: https://www.macrumors.com/2020/07/22/apple-app-store-fee-study/

This is my favorite table ever. I don't understand how these lawsuits go anywhere with this chart existing and everyone doing the same.

 

[webkit]

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

It's a duopoly in the mobile OS markets where the app stores reside/operate, where sideloading is or isn't allowed, where alternative app store are or aren't allowed, etc. This issue and others like it are really about how Apple allegedly uses its dominance in mobile OS to unfairly control app and app store access, app marketing activity, etc.

 

[playtech1]

This is my favorite table ever. I don't understand how these lawsuits go anywhere with this chart existing and everyone doing the same.

I think this table is evidence of a lack of competition - the 30% price is being set by what companies think they can get away with or they are following the leader (which I think is Apple).

Plus when you compare the cuts of App stores in the top part with the with other e-commerce marketplaces in the bottom, you can see that the App stores are generally charging a significantly higher mark-up. The typical App store cut is around double that of the general retail equivalent and it's not clear why that should be the case.

 

[I7guy]

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

So like Samantha on the tv show Bewitched apple just wiggles their nose and like magic all of this infrastructure and development is done. That’s a skewed and biased opinion.

and Apple has the nerve to say they want a piece of that hard work for what?

Apple probably should get more.

for Apple doing nothing!!!.

Skewed and biased.

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, for the services apple provides they should get more. If the dev doesn’t like it, let them try to do what apple did. After all it’s no work is it?

 

[I7guy]

Their natural monopoly?? I don't know how the UK may define things but I wouldn't necessarily call Apple a "natural monopoly" as that term is typically associated with public utilities which are often heavily regulated in order to allow them to have exclusive or near exclusive rights/access to certain local (e.g., city or state) markets.

You don’t believe Honda has a natura monopoly on its cars?

This again goes back to my point that just because there are product/service alternatives doesn't mean a lawsuit like this isn't potentially justified or that a company shouldn’t be declared a monopoly, part of a duopoly, etc.

Correct and the opposite is true as well. Like debating is water wet.

 

[kognos]

I will leave this picture here:

View attachment 2237039

All of those selections, literally all of them except the apple app store offer alternatives within their own space.

All steam games on every supported platform have an option for other stores and direct purchase. Same with Epic and the rest.
All console games offer purchase of games via disc/cartridge in any vendor shop you choose.
All physical stores are essentially the same and kind of defy the point here, as the mere existance of choice there is the choice. Can shop where you want for product you wish at whatever sales they provide.
Now for mobile--
Android allows sideloading and multiple stores.
Apple only allows the apple app store. Only. Full stop. That's it.

Monopolistic behavior does not require a monopoly position, and is, in and of itself, a legal issue. There are people who claim we have a choice in what phone we buy, there are those who claim that Apple only has a ~20% market share in phones worldwide -- but the point is: what if it were 80%? At what point does bad behavior really mean it's bad? Apple does not allow competition for developers in the Apple space. And the consumer pays that price for not having choice -- choice drives the price down, monopolistic behavior drives the price up.

You don't have to love or hate Apple to really understand this position and the gamesmanship that Apple is playing here.

"But you can just buy Android!"
Yep. That's true. Really helps Apple as well, doesn't it? Understand that I come from a position of wanting to actually like Apple, but this behavior can only end badly.

 

[jlc1978]

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

And you can develop the exact same App for Android and sell it on your own terms. You can cross compile for both platforms. You have options. No one is forcing you to be App Store only, developers just want access to Apple's large customer base for less money or in some cses for for free with subscriptions.

it will be interesting to see how this plays out. I doubt any store, beyond a few major developers such as Epic or streamers such as Spotify, will reach the breadth and depth of iOS users that Apple has, so even if competing stores are allowed Apple will still charge it's cut and let developers chose to be on it or a competitor or both.

Allowing competing stores would mean Apple is no longer the only gateway and so the while "they control all access" arguments go away, to Apple's ultimate benefit. Subscription only apps that don't allow IAPs or charge more than the non Appl Store price could be banned or face additional fees such as per d/l.

 

[kognos]

Yep. You CAN buy Android. Period. Apple is not a governmental agency that is required to provide you services in the manner you prefer. They are a business. Offering a product. You have options. Period.

So what if other business choose to operate in different manners. They aren't doing so out of charity or some obligation to you. They simply have a different business model.

"Only end badly?"

This business model charges developers wtih no choice. Developers have no alternative if they want to market to Apple. I hear what you're saying but you're not listening to my points. It's a cyclical argument to assume that people can just choose Android. If everyone chose Android then no more iPhone, and if everyone chose iPhone then this is monopolistic behavior, price fixing with no choices whatsoever on a locked ecosystem. You're skirting in the middle and using both sides of the argument to slyly avoid the issue.

That's why this only ends badly, it only works in the middle ground.

 

[jomartz]

I am not defending Apple but, if developers are not happy with the set of rules and regulations set by Apple for their devices, go develop for Android, and let Apple sort the App development by themselves.

 

[Apple Fan 2008]

Totally has nothing to do with the fact that Apple is upset with the UK over privacy... nothing at all...

 

[Lampekap]

They do have a choice. They can develop for Windows, Android, Linux, web, Playstation, Xbox, Samsung App Store, Nintendo Switch, etc. The terms were clear when they first signed up to develop for iOS - pay 30% for digital goods. They signed up knowing this term.

It's like suing Walmart, America's largest retailer, because you don't want to continue to pay the fee to have your products in Walmart stores. If you don't like Walmart's fees, then put your products into Kroger, Albertson, Target, Amazon, etc.

Exactly.
Let's reverse the numbers!
They signed up knowing about the 85% or 70% they GET. 85% if revenue is below $1 million or 70% if revenue is above $1 million. Not a bad deal at all. And is isn't that Apple decreased the share the developers get over the years. They even increased it for the first group, it used to be 70% for all.
Safe store included.
What more do you want? Besides more money.

 

[Lampekap]

...and here's the thing. I don't think there's evidence that Developers, generally, or in large numbers, are unhappy with Apple. Developers, especially small developers, earn more money on IOS than on any other platform.

As mentioned above, this is all generally driven by large players with anterior motives, pretending to take the side of developers.

Exactly. Like Epic who was suddenly concerned about the small developer. Yeah right. Google Epic's history and they don't care about deals with other companies of customers at all. They were the first to make their own store available in their game, against the rules they signed for.

 

[Motorola68000]

Apple targeted in App Store antitrust damages suit that's seeking $1BN+ for UK developers | TechCrunch

A class-action damages claim is being brought against Apple on behalf of UK-based developers over its "anticompetitive" 30% fee on in-app sales.

techcrunch.com

Apple is accused of abuse of dominant position, not monopoly. Monopoly is not bad per se. It becomes bad when a company takes advantage of it.

What is deeply problematic is any professor spending so much time in a court case rather than teaching. Sad really.

 

[Motorola68000]

The lawsuit says 15% to 30% is abuse.

But if it was 5% to 10% then it would not be abuse?

Since the lawsuit mentions those percentage fees specifically... it sounds like the percentage fees are the big issue.

It'll be interesting to see if Apple will lower the fees.

I find it offensive that universities including UAE are charging £9,250 fees.

 

[Motorola68000]

Hope the professor of economics turns his attention to his own university.

"The University of East Anglia has warned staff of possible compulsory redundancies as its £30m deficit for 2023-2024 is expected to swell to £45m in three years' time. What has gone wrong?"

Perhaps what has gone wrong is too many staff pursuing outside interest?

 

[Cristim74]

This whole argument does not make any sense. You want access to something that Apple has and has built and at the same time you want to dictate the terms in which you get this access? Are you serious???

 

[G5isAlive]

It could also be said that if it weren't for 3rd party app developers, the iPhone might not have become the success that it is today.

Remember that Steve Jobs didn't think 3rd party apps were right for Apple and the iPhone.

Steve Jobs resisted third-party apps on iPhone, biography reveals

Stuart Dredge: CEO was initially reluctant to allow non-Apple apps but was swayed by lobbying from execs and board members

www.theguardian.com

Walter Isaacson's authorised biography of former Apple CEO Steve Jobs explains that Jobs was initially unconvinced that apps would benefit Apple or its iOS platform.

"When it first came out in early 2007, there were no apps you could buy from outside developers, and Jobs initially resisted allowing them," writes Isaacson. "He didn't want outsiders to create applications for the iPhone that could mess it up, infect it with viruses, or pollute its integrity."

Hence no external apps for the first iPhone. However, the book explains that behind the scenes, Apple board member Art Levinson and SVP of worldwide product marketing Phil Schiller were pressing Jobs to change his mind.

"I called him a half dozen times to lobby for the potential of the apps," says Levinson, while Schiller adds that "I couldn't imagine that we would create something as powerful as the iPhone and not empower developers to make lots of apps. I knew customers would love them."

Yep and the developers benefited as Apple did so we can ride that loop all day. People wanting something for nothing often get nothing. That’s what this is about. Milking Apple.

 

[webkit]

You don’t believe Honda has a natura monopoly on its cars?

No, I do not. Monopolies, including natural monopolies, relate more to the market level not the brand level. In the case of Honda automobiles, you'd be talking about the automobile markets where Honda does business which can include competitors like Toyota, Nissan, Mazda, Hyundai., Volkswagen, Ford, etc.

 

[bluecoast]

Apple:
‘Hey devs, who wants to help us with the vision pro? Same deal as the App Store. It’ll be awesome.’

Devs:
‘Couple hundred thousand users in 2024 and you’re taking a cut still. Oh is that the time? Gotta go and do… something. See ya’’

 

[webkit]

Why do you keep talking about a duopoly? What's the point? Duopolies, generally, are not deemed anti-competitive. So, what's the point of continuing to bring it up?

Companies part of a duopoly can easily be declared as wielding too much market power, having too much control of a particular market, etc. and be illegally or unfairly using that power to control activities in a particular market. It is also possible that a company may be declared as being or having a monopoly in one region/country and not in another.

 

[Shirasaki]

The moment I see people defending that cut I know this thread goes nowhere.