Apple Says Tile Trackers Sold Poorly in Apple Stores

[Unregistered 4U]

I think it will come down to the iOS app store not in fact being similar enough to other app stores for the contracts of those stores to be a guide for how Apple will be regulated. Or rather, that the differences (eg in games the console hardware is mostly subsidised by the app store maker, AND there are alternative retail options for consumers), will be critical enough that the similarities won't prevail.

Yes, but a cursory review would say that if “hardware is subsidized” (Nintendo’s isn’t, but anyway) gets you off the hook, that infers that Apple just has to combine the AppStore and Hardware organizations under the same VP and subsidize each iPhone to the tune of, say, $1 and that gets them past that with no other changes required. OR will regulators then get into EXACTLY how much is being subsidized and by whom because there’s a lot of subsidization out there?

There are no alternative retail options for digital purchase (which is what the point of AppStores are) for Xbox or Playstation games. This is important because both Sony and Microsoft sell devices with no disc drive. If this applies to Apple, then it must ALSO apply to Microsoft and Sony OR they would need to be forced to not sell any devices that only allow digital purchases thus locking those systems out of alternative retail options. There’s really no clean way to rule against Apple that wouldn’t set some form of precedent that affects other companies in unforeseen ways unless you get down to the point where you’re essentially defining Apple as a “Company with a 5 letter name that starts with A and that sells devices that work with the services of a company with a 5 letter name that also starts with A.” That’s not in the realm of impossibility, but I’d say it’s unlikely.

Effectively, IF you're the only game in town (and within iOS Apple is), you can't use the rules to benefit yourself, you have to be a hands-off FRAND manager of the market.

This would fundamentally change the relationship between a company and the products and services it creates. Day, zero, thing doesn’t exist. Day 1, thing exists and provides benefits the company can profit from. Day 2, those benefits, by the mere fact that they exist and belong solely to the company that created them, are somehow unfair to the companies they’re competing against. So, they have to make their technology and services available to those other companies. What new companies developing the tech that goes far BEYOND where Apple is today are going to take the risks, when they realize that they will be unable to profit from the benefits their solution has over their competitors?

 

[mattspace]

Yes, but a cursory review would say that if “hardware is subsidized” (Nintendo’s isn’t, but anyway) gets you off the hook, that infers that Apple just has to combine the AppStore and Hardware organizations under the same VP and subsidize each iPhone to the tune of, say, $1 and that gets them past that with no other changes required. OR will regulators then get into EXACTLY how much is being subsidized and by whom because there’s a lot of subsidization out there?

It might well be that everyone gets regulated the same way - the rule might be that if you have exclusivity for App Stores, you can't also have exclusivity on your store for payment options, and that would hit Microsoft and Sony, and then an Xbox Series X could end up being 3x as expensive as it is now (looking at the cost of building an equivalent gaming PC).

Note: this for Microsoft would just mean shifting the bulk of buyers to the Gamepass service (which they're already in the process of doing), and offering an "unsubsidised" console for US$1500 with games that devs can sell however they like.

Or indeed, it might come to a principle of "Exclusivity without Editorial, or Editorial without Exclusivity" - so that if a platform holder wants to be the only content store, they can't rule on who can and can't sell apps outside of legal ratings, and if they want to have a curated store, they have to allow sideloading / alternate stores for the apps they don't want to be in "their" store.

But again, they might rule that games consoles are fundamentally different products to smartphones - that smartphones are fundamentally pocketable multifunction computers, and that games consoles are fundamentally dedicated game playing devices, that happen to have some extra non-game abilities, but are still fundamentally game devices.

In which case, completely different standards for what is, and what is not allowed in regulation could be applied.

There are no alternative retail options for digital purchase (which is what the point of AppStores are) for Xbox or Playstation games. This is important because both Sony and Microsoft sell devices with no disc drive.

The courts might not make that distinction - they might look at the fact that since you CAN by a playstation or xbox with a disc drive, that is enough to satisfy the retail choice question.

If this applies to Apple, then it must ALSO apply to Microsoft and Sony

As above, IF they rule on the basis that smartphones are not the same as computers, or the retail channel is a relevant factor, really, anything is possible.

This would fundamentally change the relationship between a company and the products and services it creates. Day, zero, thing doesn’t exist. Day 1, thing exists and provides benefits the company can profit from. Day 2, those benefits, by the mere fact that they exist and belong solely to the company that created them, are somehow unfair to the companies they’re competing against. So, they have to make their technology and services available to those other companies. What new companies developing the tech that goes far BEYOND where Apple is today are going to take the risks, when they realize that they will be unable to profit from the benefits their solution has over their competitors?

Well that's the thing, the trend in regulator opinions seem to be that if you create a product, that has as a feature of itself a marketplace for other products used on it and your product and marketplace do not have frictionless alternatives from other companies (this is the issue with regulators not considering switching to Android to be a frictionless alternative to iOS), you attain responsibilities to manage that market in a FRAND fashion, you do not attain rights to manage that market to suit yourself.

Basically, regulators seem to be coming towards an opinion that horizontal and vertical integration points should be de facto points of competitive opportunity (edit: by which I mean opportunities for competitors to create drop-in alternatives to the integrator's offerings). This is why you see laws undergoing changes to wording, so that companies don't need to have "absolute" market power, only "significant" market power, and they don't have to "eliminate" competition, merely "reduce" it, to fall within regulatory sanction.

 

[darkpaw]

Epic AFAIK argues that Apple already knows how to implement a secure and more open platform and gives MacOS as example. They argue that there is no reason for iOS to work so much differently except for Apple to keep control and prevent competition under the guise of securing the user privacy and security.

Yes, but my point was that iOS would have to be altered to allow it, which costs Apple money, and will cost them money going forward to ensure it still works with the third-party stores.

Apple can create and maintain a "ThirdPartyStoreKit" in the SDK, and other stores would *have* to use that, but who's to say these other stores won't find issue with that, too? Or should Apple open up a way of installing apps from anywhere, i.e. not a store? What about drive-by downloads in a web browser?

At what point does Apple no longer have the right to protect iOS, and the devices upon which it runs? What features in this new Kit can they withhold, or must they open up everything?

The main reason for Apple to be against this are not technical or cost-related, they are strategical and aimed at protecting their platform against unwanted competition. Note that it's perfectly fine for a company to want to be protective, the question is whether the measures Apple is using are against anti-trust regulation or not.

An iPhone is a device made by Apple with software made by Apple. There is an App Store that developers can use to sell apps. I can't install different software on my LG Smart TV; should I be allowed to?

I think we need all developers to state whether they think Apple are shafting them with their 30%/15% cut. Go with the majority. If the majority of developers say it's fine as it is, leave it as it is. Just because two very rich massive companies are upset, doesn't mean everyone is.

 

[Unregistered 4U]

It might well be that everyone gets regulated the same way - the rule might be that if you have exclusivity for App Stores, you can't also have exclusivity on your store for payment options, and that would hit Microsoft and Sony, and then an Xbox Series X could end up being 3x as expensive as it is now (looking at the cost of building an equivalent gaming PC).

I think this broader regulation and the unintended consequences of that is a big point of inertia that will lean in the direction of the status quo.

But again, they might rule that games consoles are fundamentally different products to smartphones - that smartphones are fundamentally pocketable multifunction computers, and that games consoles are fundamentally dedicated game playing devices, that happen to have some extra non-game abilities, but are still fundamentally game devices.

And then they’d be back to trying to define a device that’s a multifunction computer and pocketable in a way that very specifically excludes the Switch and Switch Lite. Maybe the device has to have a game card slot and buttons, of which the iPhone does not? OR just make it easy and say multifunction computer and pocketable BUT does not rhyme with “intendo”.

Basically, regulators seem to be coming towards an opinion that horizontal and vertical integration points should be de facto points of competitive opportunity.

We’ll see. There may even be future cases where regulators feel that the benefits of fundamentally impacting how every business does business is worth the economic turmoil it would cause. This is likely not that case. Non-US regulation may end up with just a fine as they don’t want to have to inform their constituents that the iPhone and the AppStore are no longer available in their countries. BUT, maybe that’s just the point. They’re upset that they don’t have any big players in this mobile tech economy, so they want to carve out a space that would allow them to compete.

 

[Unregistered 4U]

I think we need all developers to state whether they think Apple are shafting them with their 30%/15% cut. Go with the majority. If the majority of developers say it's fine as it is, leave it as it is. Just because two very rich massive companies are upset, doesn't mean everyone is.

All developers are speaking by simply not saying a word and just making their money. Every company that has complained has complained about a rule they want to break even though they’d signed onto those rules from the start.

 

[sdf]

The thing about trying to rewrite history while those who remember the events are still alive, is they can speak the truth of the story themselves:

Michael Tsai - Blog - What It Was Like to Sell Apps Online in 2003

No, Apple really did replace boxed software in stores. I like Michael Tsai, but he's arguing something silly for the sake of arguing.

Other online-only stores for software existed before, and still exist today. The total from all of them was a rounding error on consumer software for most of their existence, and probably are today as well. I wouldn't be surprised if other online stores have a much smaller share than before because the pie is so much bigger now. But none of that matters, because people now go to an App Store for software instead of a big box store. Going elsewhere, too, sometimes is irrelevant to the statement.

 

[sdf]

I think we need all developers to state whether they think Apple are shafting them with their 30%/15% cut. Go with the majority. If the majority of developers say it's fine as it is, leave it as it is. Just because two very rich massive companies are upset, doesn't mean everyone is.

Why?

I mean, it's fine. I'm a developer myself. I don't think they do much to earn 30% — they originally had a list of things they were going to do for developers, and they fail on most of them. I'd be more comfortable with 15%, but whatever.

If I thought I was being "shafted" I wouldn't do this. That's your voting system.

 

[bsolar]

At what point does Apple no longer have the right to protect iOS, and the devices upon which it runs? What features in this new Kit can they withhold, or must they open up everything?

At the point where, hypothetically, they are found guilty of anti-trust violations and a sentence requires them to change their practices.

Again, a big "if" that to even happen, but don't forget that an anti-trust sentence can have huge impact on a company. When Microsoft lost the first round in their antitrust case about IE, the first sentence required them to split-up and separate their OS business in a different company from everything else.

I think we need all developers to state whether they think Apple are shafting them with their 30%/15% cut. Go with the majority. If the majority of developers say it's fine as it is, leave it as it is. Just because two very rich massive companies are upset, doesn't mean everyone is.

The issue with your proposal is, what are the developers' options? If the options are "pay Apple what they want or pull out from iOS", they'll likely reason very differently compared to having on the table "you can choose among different App Stores on iOS (Apple's included), which are competing to offer developers lower prices and better features, or even roll your own distribution channel if you want".

 

[Unregistered 4U]

The issue with your proposal is, what are the developers' options? If the options are "pay Apple what they want or pull out from iOS", they'll likely reason very differently compared to having on the table "you can choose among different App Stores on iOS (Apple's included), which are competing to offer developers lower prices and better features, or even roll your own distribution channel if you want".

Orr, I mean, I would HOPE that someone’s looking at the current situation and going, “The devices are underpowered, the AppStore in onerous, and there’s a lot of folks out there that just don’t like Apple.” and make something new and amazing. There are many that see Apple as being unbeatable, but I’m not one of them.

 

[mattspace]

I think this broader regulation and the unintended consequences of that is a big point of inertia that will lean in the direction of the status quo.

In the Spotify case, the fines being discussed are 10% of Apple's global revenue, which I presume will be ongoing until they cease abusing their monopoly position, which would require them to provide Spotify with a way to be on the App Store (or on iOS) without having to pay Apple anything - the necessary remedy to put Spotify on an even-basis with Apple Music (or perhaps require Apple to divest itself of Apple Music, and charge it the same fees it charges Spotify).

10% of all revenues on an ongoing basis is more than a cost of business size fine. Tim Cook's leadership likely wouldn't survive it and the shareholder lawsuits that would result, and after the Ireland debacle, I doubt the EU is in the mood to be lenient.

Remember how prior to the verdict everyone in the Apple world thought it was preposterous that Apple would be convicted over antitrust in the eBook market, because Amazon was effectively the monopolist?

The status quo would not be an option I'd bet money on.

And then they’d be back to trying to define a device that’s a multifunction computer and pocketable in a way that very specifically excludes the Switch and Switch Lite. Maybe the device has to have a game card slot and buttons, of which the iPhone does not? OR just make it easy and say multifunction computer and pocketable BUT does not rhyme with “intendo”.

The Switch has retail channels for games - Apple is still unique in having only a single option for owners to buy software.

Non-US regulation may end up with just a fine as they don’t want to have to inform their constituents that the iPhone and the AppStore are no longer available in their countries.

Apple bends to everything China and Russia asks, because to refuse to do business in those markets would see the board receive shareholder suits for failing to maximise shareholder value. They're never going to exit a market, especially one as large as the EU.

 

[spicymints]

In the Spotify case, the fines being discussed are 10% of Apple's global revenue, which I presume will be ongoing until they cease abusing their monopoly position, which would require them to provide Spotify with a way to be on the App Store (or on iOS) without having to pay Apple anything - the necessary remedy to put Spotify on an even-basis with Apple Music (or perhaps require Apple to divest itself of Apple Music, and charge it the same fees it charges Spotify).

10% of all revenues on an ongoing basis is more than a cost of business size fine. Tim Cook's leadership likely wouldn't survive it and the shareholder lawsuits that would result, and after the Ireland debacle, I doubt the EU is in the mood to be lenient.

Remember how prior to the verdict everyone in the Apple world thought it was preposterous that Apple would be convicted over antitrust in the eBook market, because Amazon was effectively the monopolist?

The status quo would not be an option I'd bet money on.


The Switch has retail channels for games - Apple is still unique in having only a single option for owners to buy software.



Apple bends to everything China and Russia asks, because to refuse to do business in those markets would see the board receive shareholder suits for failing to maximise shareholder value. They're never going to exit a market, especially one as large as the EU.

I believe its giving consumers the options to choose to pay. If you don't trust an app you can pay with IAP and if you do you can pay directly to the producer. Apple is interested in protecting its 30% cut because its easily incurring revenue without any major costs. they review the app once and they always get a 30% cut. its a SaaS model like Adobe has moved away from single price to subscription. In away apple charges an upfront fee($99 dollars a yr) and then charges monthly or yearly. It's just apple fighting to protect its profitable business model stating its in consumers interests when in reality its just for profit.

 

[ShiftyOne]

Addressing final concerns for Spotify, Apple says that despite what the music streaming giant said during the hearing, it does not prohibit developers from informing users about the ability to purchase in-app purchases, such as subscriptions, elsewhere, such as on the web.

Yes they do...? Am I missing something?

Apple doesn't allow redirects or links to purchase outside of the App Store. There is no rule saying they can't have a message saying 'go to www.spotify.com to purchase a subscription'.

 

[Unregistered 4U]

the necessary remedy to put Spotify on an even-basis with Apple Music

Of course, the only TRUE way for Spotify to be on an even-basis… COMPLETELY even-basis with Apple Music… would be for Spotify to put in the years and years and years of software and hardware development to build their hardware distribution network. But, then Spotify would have to allow Pandora and Apple Music to use THEIR network and hardware.

Remember how prior to the verdict everyone in the Apple world thought it was preposterous that Apple would be convicted over antitrust in the eBook market, because Amazon was effectively the monopolist?

The status quo would not be an option I'd bet money on.

Excellent point! See, THAT was a broad ruling that was NOT overly specifically targeted towards Apple. It would have applied to any company that performed the same actions of coordinating with the publishers. This current case has elements that several other companies are using in the same way such that, in order to ONLY affect Apple,

The Switch has retail channels for games - Apple is still unique in having only a single option for owners to buy software.

you have to use VERRRY specific language like this. While, at the same time, willfully ignoring things like the digital distribution of software that’s a central part of the case. Again, if this is riding on something like “retail channels”, there’s nothing preventing any of the companies in question from making app specific gift cards available at retail that provides a voucher for a download. The transaction takes place OFF the store, the store just provides the secure download (and re-download on new devices).

Apple bends to everything China and Russia asks, because to refuse to do business in those markets would see the board receive shareholder suits for failing to maximise shareholder value. They're never going to exit a market, especially one as large as the EU.

If the EU sets a rule saying “Apple cannot operate in the EU”, then Apple wouldn’t have a choice, they’d have to exit the market. Same if China and Russia did the same.

 

[mattspace]

you have to use VERRRY specific language like this.

Only as specific as "if you are the market owner / declared monopolist, you cannot also own the sole retail channel for customers, and sole payment method for developers".

Given what Apple has been declared to have done by the EU competition regulators in the Spotify case, is using its monopoly as the market owner for iOS, to extend or defend a move into Streaming Music, and that same rule would apply to Netflix Vs. AppleTV, and Kindle Vs. Apple Books.

I can't see any realistic answer that satisfies correcting the structural violation of competition policy (Apple operating services that compete with third parties, and using their ownership of the platform to increase competitors costs), while also providing an outcome that can apply to all developers on the app store - I don't think a Spotify-specific remedy will fly, nor will a fine alone, since that will be a remedy for past violations.

The outcome is likely to be that Apple will have to keep the one & only App Store, but allow developers to connect their own choice of payment processor to it, or, they'll have to allow notarised sideloading, exactly the way they do on macOS.

This current case has elements that several other companies are using in the same way such that, in order to ONLY affect Apple,

Some elements, but not all - and that's the critical thing - it's not Apple being the platform monopolist that's the problem, it's not Apple's App Store having only one payment option that's the problem, it's the combination of all of them that is the threshold for regulation. Microsoft and Sony don't meet every qualifying condition? No case to answer. It's not a case of "if you meet 2/3 of the conditions for regulation, you get some regulation".

If the EU sets a rule saying “Apple cannot operate in the EU”, then Apple wouldn’t have a choice, they’d have to exit the market. Same if China and Russia did the same.

They're not going to set a rule that bans Apple, they're going to enforce the rules that require Apple to comply with existing laws. Currently, Apple is operating in a fashion that is illegal under EU competition law.

 

[darkpaw]

I mean, it's fine. I'm a developer myself. I don't think they do much to earn 30% — they originally had a list of things they were going to do for developers, and they fail on most of them. I'd be more comfortable with 15%, but whatever.

If you're earning under $1mn/year you can be on 15%.

My point stands, though. Why is 15% okay to you? Who are you or I to say what they should be taking as a cut? It's not up to me to say how much Apple can earn from a sale of my app, nor is it up to Epic or Spotify to determine a percentage Apple can make. I can set a price tier that gives me what I want to receive from each sale, as can you.

If Apple is forced to allow third-party stores on iOS, then do I need to sign up with all these other stores? I'd prefer to have just one company with whom I have to sign contracts and agreements. If I have to sign up with multiple stores because some people won't use the Apple App Store, then this multiples the distribution work, and if I don't sign up, am I losing sales that I otherwise would've got from being on the only store on iOS?

 

[collin_]

Apple doesn't allow redirects or links to purchase outside of the App Store. There is no rule saying they can't have a message saying 'go to www.spotify.com to purchase a subscription'.

No, they cannot. See the image I attached from here.

To see an example of this, download the Netflix app. All it says is this: "You can't sign up for Netflix in the app. We know it's a hassle. After you're a member, you can start watching in the app."

 

[Unregistered 4U]

if you are the market owner / declared monopolist

Problematic from the start, though, because the “market” definition includes the trademarked name of the company (iOS). While monopoly claims certainly allows one to define the “market” however they deem fit, no case has been brought forward and won using such a narrow definition. Mainly because, once you set the precedent that such a narrow definition is legal, THEN that narrow definition could be used against EVERY company that has a product. For example, “Spotify is using their monopoly as the owner of Spotify to extend a move into podcasting”.

Some elements, but not all - and that's the critical thing - it's not Apple being the platform monopolist that's the problem, it's not Apple's App Store having only one payment option that's the problem, it's the combination of all of them that is the threshold for regulation. Microsoft and Sony don't meet every qualifying condition? No case to answer. It's not a case of "if you meet 2/3 of the conditions for regulation, you get some regulation".

But, the framework, the precedent where Epic can take a shot against Microsoft and Sony’s AppStores hasn’t been set yet. If this were to go forward, then the same extremely narrow definitions used against Apple would be reused against any company with an AppStore “It’s not the retail sales I’m concerned about, my concern is with the absolute control they have over the digital delivery. And, in this prior case, you’ll see that having absolute control over digital delivery is part of the problem that leads to these onerous terms. That needs to change.” Maybe some future case will set that precedent, but not likely that this one will.

 

[mattspace]

It's not up to me to say how much Apple can earn from a sale of my app,

Sure it is. Refuse to sell on Apple's storefront if you don't like their cost per sale, and sell independently using the competitive market for sales services... except you can't on iOS.

I'd prefer to have just one company with whom I have to sign contracts and agreements.

Sell your app direct, using your own infrastructure, or through Fastspring etc, the way Mac developers do now. Even offer an independent, and an Apple Store version if you like. There's no exclusivity agreements for the Mac App Store - you just get a lower quality, less functional product as a customer when you buy the app from Apple.

But the way that works for you, may not work for others.

 

[mattspace]

Problematic from the start, though, because the “market” definition includes the trademarked name of the company (iOS).

It's not problematic. Apple chose to trademark iOS, that doesn't provide an escape clause from regulatory oversight.

While monopoly claims certainly allows one to define the “market” however they deem fit, no case has been brought forward and won using such a narrow definition. Mainly because, once you set the precedent that such a narrow definition is legal, THEN that narrow definition could be used against EVERY company that has a product. For example, “Spotify is using their monopoly as the owner of Spotify to extend a move into podcasting”.

Spotify isn't a platform. Music streaming services are effectively zero-friction alternatives to each other for both the consumer, and the seller (musician), with zero horizontal integration or lockin.

The goal of regulation isn't to ensure everyone gets punished equally, it's to ensure an outlier (in this case Apple) gets brought back into a realm of behaviour and structures the market regulators believe is best for maintaining a competitive market, and promoting consumers' welfare.

A narrow definition targeting what Apple is doing, that no one else is doing specifically in practice, is exactly what regulators should be doing, rather than letting years pass trying to let perfect be the enemy of good. Fix the Behaviour That Only Apple Exhibits Problem now, fix any other problems if and when they arise.

But, the framework, the precedent where Epic can take a shot against Microsoft and Sony’s AppStores hasn’t been set yet. If this were to go forward, then the same extremely narrow definitions used against Apple would be reused against any company with an AppStore “It’s not the retail sales I’m concerned about, my concern is with the absolute control they have over the digital delivery. And, in this prior case, you’ll see that having absolute control over digital delivery is part of the problem that leads to these onerous terms. That needs to change.” Maybe some future case will set that precedent, but not likely that this one will.

Right, and regulators will come back and say "The regulation is specific to cases where a company has absolute control of both the developer channel, and the entire retail channel. If the company does not control both ends of the process, there's no case for regulatory intervention."

And again, Microsoft and Sony would simply come to the court and say "this console's true retail value is $1500. We sell it to the consumer for $500, so that the consumer has an extra $1000 in their pocket on day one to buy games. We wear the risk on our bet that over the lifetime of the console they will spend $3000 on games, of which we will recoup $1000 from the developer, and the developer will make $2000 (note, the developers make more in total out of this, than Microsoft does). The cut we take from Developers is not a charge to them, or a rent-seeking toll on all commerce on our games platform, but rather our reclamation of our deferred console sales revenue.

Apple has no deferred sale revenue for iPhones. They're sold at a profit on day one. Every other cost Apple has in software and services development is the same for console developers (and they eat that cost, rather than passing it on) - it is the deferred revenue of the hardware (and lack of a consumer purchasing monopoly) that is unique to (MS/Sony) consoles.

Microsoft could easily lock the subsidised (ie all currently) Xbox to only playing games that pay a cut to Microsoft, and then put a "full price" SKU in the market for $1500, let it play games that have no cut paid to Microsoft (and let developers eat the cost of manufacturing separate games for the unsubsidised SKU). Guess how many they'd sell?

It will be patently obvious to anyone that the MS/Sony console business model is completely different to Apple's, and that the deferred revenue of the console's sale is the key feature of that business model (add to that consumer retail choice), so they're not comparable to what Apple does with iPhones. Regulation aimed at Apple's control over both the developer and retail channels therefore has no need to capture MS/Sony (except in the talking points Apple gave to their media pets, Gruber etc).

The problem fundamentally, is people are conflating no one having a business model that is the same as Apple's, and therefore not being captured by regulation which captures Apple, with an intent for regulation to target Apple specifically.

 

[Unregistered 4U]

It's not problematic. Apple chose to trademark iOS, that doesn't provide an escape clause from regulatory oversight.

The point is that looking at ALL cases that have been brought forward related to monopolies NONE of them have ever related to a market that was defined in terms of a company’s products. Microsoft had 100% of the Microsoft Internet Explorer market, but that wasn’t the problem. The claim was for internet browsers. If this case was about “App Stores” then there would be parallels to Standard for oil and AT&T for telecommunications. But, as Apple doesn’t have anywhere close to a monopoly on App Stores, they just decided to define “market” as APPLE’s App Store. Which, of course, they have 100% control over At some point in the future (I doubt it) Apple MAY have an actual monopoly on App Stores. In that case, if they abuse that monopoly, I’d expect cases to be brought forward to deal with that.

Spotify isn't a platform.

Spotify would disagree with you with their Spotify’s Platform Guides: A collection of guides on topics that span across the entire Spotify Platform. BUT, I know, Spotify’s Platform doesn’t start with the letter “A” so it’s not a REAL platform. Anything, as long as we make sure we don’t apply the same term to both companies!

The goal of regulation isn't to ensure everyone gets punished equally

That is, actually, in the US, the definition of regulation. You don’t allow one coal plant to dump toxic material in the ground water, but prevent others from doing so. You don’t allow one car company to produce inefficient cars while forcing other companies to a fuel efficiency standard. You don’t allow one company to have control over their own digital storefront while not allowing others to have control over their own digital storefront. In the US, where this current case is being held, federal regulations are applied broadly. That’s why time is allowed for any new regulations to go into effect; it’s understood that the entire industry will need time to adjust to the new regulation. This is the primary reason why no new US regulations will likely come out of this, because of impact to companies other than Apple. Outside the US, who knows what will go forward

Apple has no deferred sale revenue for iPhones.

Again, to get around this would be a simple matter of Apple, using your words, saying “We’ve changed our model, the products true retail value is $1201. We sell it to the consumer for $1199 so that the consumer has an extra $2 in their pocket on day one for IAP”. UNLESS US regulators want to then regulate how all companies subsidize their products (they don’t).

Microsoft could easily lock the subsidised (ie all currently) Xbox to only playing games that pay a cut to Microsoft

EVERY game on both Playstation and Xbox pays a cut to Microsoft and Sony regardless of physical or digital delivery. The only difference is physical delivery costs more for the developer. Neither they nor Nintendo are going to let anyone on their platform without paying the required fees.

I understand that some people viscerally want SOMETHING severe to happen, to Apple’s detriment. And, they’re not very concerned over whether it’s just or appropriate, they just want to see Apple affected. When you examine the concerns raised against Apple and apply them equally to other companies, though, and those concerns are suddenly not the right thing to regulate for those OTHER companies, just for Apple? THAT’S when you know that it’s not about righting a wrong or even leveling the playing field, it’s about “sticking-it-to-Apple”.

 

[mattspace]

The point is that looking at ALL cases that have been brought forward related to monopolies NONE of them have ever related to a market that was defined in terms of a company’s products.

Right, but iOS is defined as a self-contained market, and it is a declared monopoly in many areas, and antitrust law is a living document, so it really doesn't matter one whit what happened in the past.

This is the word we live in now - iOS is a market, and Apple is the dominant player in that market, and they are using that dominant position to disadvantage their competitors for other, unrelated businesses - be it streaming music, or payment processing for the sale of developer apps.

Microsoft had 100% of the Microsoft Internet Explorer market, but that wasn’t the problem. The claim was for internet browsers.

The market IIRC was PC Compatible Operating Systems, and the business into which they were extending or defending a monopoly, was Web Browsers.

If this case was about “App Stores” then there would be parallels to Standard for oil and AT&T for telecommunications. But, as Apple doesn’t have anywhere close to a monopoly on App Stores, they just decided to define “market” as APPLE’s App Store. Which, of course, they have 100% control over At some point in the future (I doubt it) Apple MAY have an actual monopoly on App Stores. In that case, if they abuse that monopoly, I’d expect cases to be brought forward to deal with that.

No, the market is iOS.

Apple already has a 100% share of App Stores within that market.

The App Store is an unrelated business Apple runs on iOS, that is only the sole App Store because Apple wields allegedly illegal control over the market.

Spotify would disagree with you with their Spotify’s Platform Guides: A collection of guides on topics that span across the entire Spotify Platform. BUT, I know, Spotify’s Platform doesn’t start with the letter “A” so it’s not a REAL platform. Anything, as long as we make sure we don’t apply the same term to both companies!

What Spotify calls themselves is not the issue - how they are arranged structurally, and how they function within the market is the issue. Does Spotify require Apple to pay it a licence fee, a cut of every Apple device sold, to make devices that can play Spotify content?

That is, actually, in the US, the definition of regulation. You don’t allow one coal plant to dump toxic material in the ground water, but prevent others from doing so.

No, but if only one company is dumping toxic material into the ground water, you don't say "we can't regulate against ground water pollution, unless we also regulate air pollution, which those other plants are doing".

The ground water is a problem in itself, and should be dealt with in isolation, THEN you can worry about whatever else is a problem.

Some problems can be solved, without solving all problems.

The Apple problem, results in higher prices for consumers as developers pass on Apple's fees from day one. The Console non-problem results in lower prices for consumers, because it gets them a console for 1/3 of its true retail cost, and at the end of the day, the effect on pricing for consumers is where regulators get very interested in measuring the effect of a business structure.

I understand that some people viscerally want SOMETHING severe to happen, to Apple’s detriment. And, they’re not very concerned over whether it’s just or appropriate, they just want to see Apple affected. When you examine the concerns raised against Apple and apply them equally to other companies, though, and those concerns are suddenly not the right thing to regulate for those OTHER companies, just for Apple? THAT’S when you know that it’s not about righting a wrong or even leveling the playing field, it’s about “sticking-it-to-Apple”.

The playing field is iOS, and services and products offered within. Regulators want Apple's separate business activities - payment processing for developers, App Stores, Media Stores, to be forced to compete on an even basis with 3rd party alternatives within iOS. If there was only one app store on Android and no side-loading, Android would face the exact same regulation.

Beginning, middle and end of story.

Until consoles have an identical business, market and sales structure, they're not relevant to the discussion.

 

[Unregistered 4U]

Right, but iOS is defined as a self-contained market, and it is a declared monopoly in many areas, and antitrust law is a living document, so it really doesn't matter one whit what happened in the past.

You’ve excluded iPadOS in your market definition. So there’s regulations that should apply to iPhones and not iPads? Or might you want to change the market to “mobile devices made by Apple that don‘t run macOS.” I’m sure that’ll stand in US court.

In US law, there is something referred to as “precedent” which is an earlier event or action that is regarded as an example. As a result, in US law it very much matters what happened in the past. Every case that may potentially alter a prior precedent gets added scrutiny. Precedents in the past have set regulations on what’s considered “just” in a contract, appropriate interactions between entities, the control a company has over the products they create, etc. If anything about this case that indicates that a prior precedent needs to be changed, there’s a high bar that needs to be crossed to get there.

The market IIRC was PC Compatible Operating Systems, and the business into which they were extending or defending a monopoly, was Web Browsers.

Ok, so the case wasn’t brought against “MS-DOS” or “Windows” or “Internet Explorer” it was “PC Compatible Operating systems” (that Microsoft had a monopoly on) and Web Browsers (that Microsoft was TRYING to obtain a monopoly on). If that case had set a precedent regarding Microsoft’s “Windows” product specifically, then there would be more parallels to the current state.

What Spotify calls themselves is not the issue - how they are arranged structurally, and how they function within the market is the issue. Does Spotify require Apple to pay it a licence fee, a cut of every Apple device sold, to make devices that can play Spotify content?

Spotify refers to themselves as a “platform”. However, you don’t agree with Spotify’s definition of themselves? OK!

No, but if only one company is dumping toxic material into the ground water, you don't say "we can't regulate against ground water pollution, unless we also regulate air pollution, which those other plants are doing".

BUT, the precedent set in one regulation activity directly relates to any other ”environmental impact” regulation. Even though “creaalm dumping” isn’t even a thing, if it’s determined that it has a detrimental impact on the environment, then the precedent that’s been already set says that “creaalm dumping” as something that detrimentally impacts the environment can ALSO be regulated. The easier it is to show “this has been regulated before”, the easier it is to put in place a regulation.

Currently, in the US, the form of regulation you mention has not been put in place. In fact, there are precedents indicating that these things are regulated, but not regulated in the ways you describe.

 

[sdf]

My point stands, though. Why is 15% okay to you?

Because when it was introduced, Apple said they would take a 30% cut for X. They delivered less than X, so their cut should be less as a matter of principle.

 

[hatchettjack]

I've been following some of your comments and I have to say, respectfully, your analogies are lacking, and in general you seem to miss the point (or the consequences of the logic you've been using for that matter).


First of all, US antitrust law is severely lacking and unclear. In fact the Sherman Antitrust Act is so poorly written, that it essentially declares any form of doing business illegal, so the SCOTUS had to step in to make sure only "unreasonable" forms would be deemed illegal. Don't take my word for it, here's the FTC explaining pretty much the same.

Because the actual law on the matter is so lacking, most important parts of what are now considered staples of antitrust, have their foundation in case law.
The problem however, is that the subject itself is rather complicated, pitfalls in the form of unintended effects are everywhere, not many cases have the same fact pattern and there's the possibility that case law changes.

In particular the pitfall of unintended effects that can ripple through society, causes many to use analogies in cases that don't have a fact pattern that clearly aligns with prior case law.
Analogies are used in the Epic v Apple case, but analogies are also used outside of the courtroom. Analogies are used here on MacRumors, they're used on Reddit, they're used on Twitter.
Everyone is using analogies and thinks their analogy is the most correct and the other one isn't. Hell, I'm going to use an analogy (sort of) further down this comment.

The reason for these analogies is that there isn't clear cut case law on this, nor are there clear cut codified antitrust laws on this, and the digital world and how it does its commerce, is different from the brick-and-mortar world of yesteryear. So people are left to try and make it simple and make it fit a thing that does have a clear answer (either legally, or logically).

Anyways, having said that, there are some general principles when it comes to antitrust.
The one that seems relevant for the discussion here, with you, is that single brand markets are generally not considered a relevant market for anititrust purposes.

This makes sense. If the opposite was true, then everyone would possibly end up in hot water, just by virtue of making something.

I would have monopoly power with possible antitrust issues in the single brand market of poseidondev comments.
You would have monopoly power with possible antitrust issues in the single brand market of MacDevil7334 comments.
MacRumors would have monopoly power with possible antitrust issues in the single brand market of MacRumors articles.
And fancy analogies notwithstanding, this is what the Apple monopoly over distribution of iOS apps falls under.

That's not to say it had never occurred that single brand markets were considered a relevant market for antitrust purposes, but it's extremely rare and almost always the exceptions involved lock-in.
This is, amongst other things, what Epic is aiming for, but the who's who in the world of antitrust law considers it a "novel" argument, worse for Epic, the judge called it a "novel" argument. Novel in this context means as much as "deviating from current case law" and with it, an uphill battle.

Another general principle in antitrust, is that you preferably would like to see an active act of abuse of market power.
A clear example would be for example, Apple setting a very low commission at the start of the App Store, biding their time, and once everyone had adopted iOS, to then crank up the commission to above market rates.

Instead we see that the terms set at the start of the App Store, and more importantly, before the moment Apple gained significant market power, are the same as they are now and arguably more favorable. This is a thing that needs to be overcome for a multitude of reasons.

It's hard to argue that the disputed terms are uncompetitive, if it leads to an organic growth and success. Within the antitrust bubble, it is presumed that bad terms and uncompetitive behavior without significant market power, will be rooted out by competition with better terms and good behavior, and can't lead to organic growth.

The US legal system generally doesn't like penalizing successful companies for the sake of being successful.
An often used standard to determine problematic monopoly power is "the willful acquisition or maintenance of [monopoly] power as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident".
It's hard to argue that the acquisition of the current market power hasn't occurred due to "a superior product, business acumen, or historic accident", and since the terms of the App Store hasn't changed, other than in favor of developers with lower commissions, since the acquisition, it's a difficult argument to make that the maintenance is not a result of the same.

Again, in general you want an active act to be able to point to. It's not impossible to make your case without it, but it's very difficult.

All the other stuff you mentioned in your various analogies is for the most part irrelevant.

What is relevant however is that that if the terms were in place when they started with almost no market share and no developers on the platform, and despite those terms developers and users alike flocked to the platform, and the terms or commission rates haven't changed in an adverse way since Apple gained a potentially problematic market power in the antitrust sense (the date of which, as an aside, turns out to be pretty hard to pinpoint by the experts), then it becomes a very difficult case to make, analogies notwithstanding.

These three things, single brand markets (i.e. having a monopoly on your own brand/devices), the lack of a clear act done once substantial market power had been procured, and the fact that despite these terms users and developers alike willingly flocked to the platform years before the same terms are considered to be problematic by some parties, are the three biggest hurdles under the current antitrust principles.

The only way to change this, if that is something that's desired, is with new legislation that streamlines, codifies and clarifies antitrust laws.

The problem however is that it would require surgical precision to draft something that doesn't trigger unintended consequences and that doesn't create loopholes, plus there would be enormous corporate pressure to prevent something new and fresh because the principles that would need to be incorporated into an antitrust reform to take Apple down a peg, would affect a whole lot more than just Apple.

If I ever need an antitrust lawyer I’m calling you!

 

[mattspace]

In US law, there is something referred to as “precedent” which is an earlier event or action that is regarded as an example. As a result, in US law it very much matters what happened in the past. Every case that may potentially alter a prior precedent gets added scrutiny. Precedents in the past have set regulations on what’s considered “just” in a contract, appropriate interactions between entities, the control a company has over the products they create, etc. If anything about this case that indicates that a prior precedent needs to be changed, there’s a high bar that needs to be crossed to get there.

Precedents are a guide, and tend to only bind lower courts to the decisions of higher courts. But that's the point of higher courts, to set new precedents.

Fundamentally though, Apple in the US will bend to whatever the international community does with regards to regulation of Apple, because American iPhone users won't tolerate not having the ability to sideload once the EU imposes it, and American developers won't tolerate not having their own payment options, once the EU imposes it.

And the EU is almost certain to impose these things, given they've identified the App Store as a problem, and fixing the problem is more their goal, than an ongoing punishment regime.

Added to that, we can recall they imposed binding 3rd party arbitration on the App Store, taking away Apple's authority to have the final word on App Store rejections etc. They have form for imposing change on Apple.

Much as the US eventually accepted the Berne Convention to replace its own Copyright regime.

BUT, the precedent set in one regulation activity directly relates to any other ”environmental impact” regulation. Even though “creaalm dumping” isn’t even a thing, if it’s determined that it has a detrimental impact on the environment, then the precedent that’s been already set says that “creaalm dumping” as something that detrimentally impacts the environment can ALSO be regulated. The easier it is to show “this has been regulated before”, the easier it is to put in place a regulation.

Android and Games Consoles are fundamentally different to iOS / iPadOS. Fundamentally different by virtue of their business models and that they literally lack the single feature that is the defining functional characteristic of iOS / iPadOS's monopoly abuse.

To argue against regulating Apple, because those other businesses are not regulated in the same way, is like arguing that governments can't regulate car emissions, unless they also regulate ride-on lawnmower emissions to the same standard, because they both share some characteristics (petrol motor, operator conveyance).

Currently, in the US, the form of regulation you mention has not been put in place. In fact, there are precedents indicating that these things are regulated, but not regulated in the ways you describe.

Privately owned railroads were regulated, even though road/wagon-haul existed as an alternative. No one was successful in making the argument that Railroad was just a part of a larger "Transport" market, and therefore by default the private railroad owner couldn't be a monopoly.