U.S. Supreme Court Appears 'Open' to Allowing App Store Monopoly Lawsuit vs. Apple to Proceed

[Abazigal]

Google is doing fine.

You're right. They can run the App Store how they want, but in the U.S. antitrust laws come into play here.

Three questions though for conversation that requires you to think more from legal perspective and less of who has rights or what not.

1) A possible problem with this is that developers do not see much data getting passed to them per transaction. So really how much of a relationship is it with the developer compared to the customer? Apple obviously gets way more of the customer data than the developer gets. Is it a relationship with the developer or the customer?

Developers get the money.
Customers get the app.
Apple gets everything else (data, their cut of the profits)

I suppose an argument can be made that consumers are Apple’s customers as well, not just developers. I am not sure if that is enough to make a case allowing consumers to directly sue Apple though.

But your point has its merit.

2) Some apps have stores and don't suffer the Apple tax. An example is the Amazon app. But why is it only digital goods are charged the mandatory 30% and not physical goods?

Because Apple can.

I argued in my earlier response that I don’t think Apple is justified in doing so, but it is certainly within their power.

3) Why does Apple insist on disallowing other digital app stores to exist in their App Store? Although I understand Apple has the right to do this and this would enable other companies to side skirt around the 30% potentially, isn't this inherently by definition anti-competitive?

My take is that the Apple experience is defined by Apple having total and absolute control over every aspect of their platform. This, amongst other things, includes app developers having to capitulate to whatever demands Apple makes, inane as they may sound.

As a consumer, I shouldn’t need to decide whether to purchase my app directly from the App Store or from a third party. I see the merit behind there being just one source, and my decision is either “buy or don’t buy”.

Would other app stores have to abide by the same rules as the ios App Store? If yes, then what’s the point?

If anything, I would like to see Apple actually enforce their App Store rules and policies better on the big boys. Like using some of their leverage to force companies like Facebook and google to optimise their apps better for ios devices, respect privacy settings better and include the newer APIs like PIP mode for YouTube.

Else, what’s the point of all that leverage if you are only going to use that power to bully the small fry?

 

[inkahauts]

Apple could always allow other ap stores but then require a fee to “process apps”, and then that would still be mandatory for apps to get approval so they could be sold and launched on an iOS device, no matter what specific store sold it. So all you’d be doing is paying more, cause you know they’d increase the price to offset the new stores “fees” and the “apple approval fee”...

I think the lawsuit is ridiculous. Apple is selling hardware and software when they sell their devices, and they require additional software that works with it to be approved as viable and sold through their eco system, which is what people are buying into in the first place. There is no anti trust, they don’t control anything with android apps and stores... they have no strangle hold on the market, only on stuff for their own devices.

 

[I7guy]

Apple could always allow other ap stores but then require a fee to “process apps”, and then that would still be mandatory for apps to get approval so they could be sold and launched on an iOS device, no matter what specific store sold it. So all you’d be doing is paying more, cause you know they’d increase the price to offset the new stores “fees” and the “apple approval fee”...

I think the lawsuit is ridiculous. Apple is selling hardware and software when they sell their devices, and they require additional software that works with it to be approved as viable and sold through their eco system, which is what people are buying into in the first place. There is no anti trust, they don’t control anything with android apps and stores... they have no strangle hold on the market, only on stuff for their own devices.

Whether the courts agree is another matter. However this will drag on for years, while people are still debating this on MR.

 

[ipponrg]

Developers get the money.
Customers get the app.
Apple gets everything else (data, their cut of the profits)

I suppose an argument can be made that consumers are Apple’s customers as well, not just developers. I am not sure if that is enough to make a case allowing consumers to directly sue Apple though.

But your point has its merit.

That's the issue. When you're buying a product, you're suppose to be buying from the developer and not Apple. However with the way Apple has it set up, you're buying from Apple and not the developer because of the data contracts. That's what the customer is trying to bend here.

 

[ryecoke]

Some publicly known examples:
• Steam Link
• AppShopper
• The South Park App
• Samsung Pay
• Any browser using it's own rendering engine
• Any app the reviewer just doesn't like, finds offensive etc
• Any app that provides a custom watch face for the Apple Watch
• Anything to do with porn
• CryptoCurrency Apps (they do allow some now, but it's highly restricted)
• Any app with real or simulated gambling (restricted to corporate developer accounts only)

Lesser known but still relevant rejections:
• Obama Trampoline
• MyShoe
• I Am Poor
• Pull My Finger

I don't know every single one of these cases, but again, just because an app is denied doesn't mean it's anti-trust issues.

Steam Link for example was declined because they circumvented the App Store. Apple isn't even in the gaming space at all so they wouldn't deny it on competition grounds.

Apple banning porn or gambling is definitely not an anti-trust thing, I don't even know why you'd bring that up...

I was never arguing that Apple doesn't deny apps, or that they don't tightly control their platform with strict policies... of course they do. We are talking about anti-trust issues here and I still haven't seen a single example of it.

Again, I'll repeat, I definitely think apps should be allowed outside of the App Store at your own risk (they already kinda are with jailbreaking.) MacOS already has this in place. I think that would largely solve most complaints.

 

[macfacts]

Looks like a new digital app store just opened up from the maker of fortnite and they only charge 12 Percent. How is that possible? So many people in this thread were explaining how it costs a lot of money to do the stuff Apple offers for 30% cut!

 

[I7guy]

Looks like a new digital app store just opened up from the maker of fortnite and they only charge 12 Percent. How is that possible? So many people in this thread were explaining how it costs a lot of money to do the stuff Apple offers for 30% cut!

Loss leader? One really doesn't know the economics behind the numbers. They may be willing to forego profit to get apps on the store and slowly get more percent over time.

At any rate, it seems June 2019 we will know if the suit can proceed or not. If it can proceed, it will be 10 years before any meaningful outcome and by that time, apple will already have changed things around.

 

[Master Atrus]

I get so tired of comments like this. Retail is completely different. First of all were talking about physical products that are purchased from manufacturers or possibly jobbers (3rd party resellers). Secondly all those manufacturers can sell their products to hundreds of different stores. That creates competition among the retailers.

Thirdly when a store buys merchandise they pay for hundreds or thousands of pieces. That means that they pay for all those products when they buy them and not as they are sold. That also means that the manufacturers are paid before a single piece gets sold. The manufacturers don’t give a hoot how much those products are sold for. It doesn’t matter to them because they have already been paid.

So please for the love of God stop trying to compare the App Store to retail of any kind.

Well that was a little rude ... I was asking a serious question.

But fine, let’s go with this ... how is this any different from video games? Software companies pay PlayStation / Microsoft / Nintendo respectively to sell their software only on that platform. There is no alternative store on XBox, Switch, PS4 ...

 

[rocknblogger]

Well that was a little rude ... I was asking a serious question.

But fine, let’s go with this ... how is this any different from video games? Software companies pay PlayStation / Microsoft / Nintendo respectively to sell their software only on that platform. There is no alternative store on XBox, Switch, PS4 ...

My apologies I honestly didn’t mean to be rude. But here again I’m sorry but you’re wrong. You can buy games for Xbox and Ps in any number of retail stores as well as online stores. I don’t know about the Switch though as I don’t know anyone who has one.

And again, as far as brick and mortar retail is concerned, it’s not comparable.

 

[Master Atrus]

My apologies I honestly didn’t mean to be rude. But here again I’m sorry but you’re wrong. You can buy games for Xbox and Ps in any number of retail stores as well as online stores. I don’t know about the Switch though as I don’t know anyone who has one.

And again, as far as brick and mortar retail is concerned, it’s not comparable.

No worries ... while I understand you can buy it from anywhere, the complaint from the plaintiff is that prices are artificially higher because of Apple’s 30% cut. (Developers charge more to offset this cost). Wouldn’t this be true in video games too? Since developers have to license permission from a Microsoft for Xbox games (and etc.) wouldn’t those prices be artificially higher because of that monopolistic license (only Microsoft can license for Xbox and etc.)?

It would be different if the plaintiff was saying that the fact the Apple is the only store is driving up prices, but that isn’t the complaint. The complaint is Apple’s fee which is why I think the correlation to video games fits.

 

[rocknblogger]

No worries ... while I understand you can buy it from anywhere, the complaint from the plaintiff is that prices are artificially higher because of Apple’s 30% cut. (Developers charge more to offset this cost). Wouldn’t this be true in video games too? Since developers have to license permission from a Microsoft for Xbox games (and etc.) wouldn’t those prices be artificially higher because of that monopolistic license (only Microsoft can license for Xbox and etc.)?

It would be different if the plaintiff was saying that the fact the Apple is the only store is driving up prices, but that isn’t the complaint. The complaint is Apple’s fee which is why I think the correlation to video games fits.

I believe the suit is about the fact that you can only buy iOS apps from a single source which is the App Store which in theory can keep prices high as there is no competition.

 

[Michael Scrip]

I believe the suit is about the fact that you can only buy iOS apps from a single source which is the App Store which in theory can keep prices high as there is no competition.

On the flipside... notice all the $2, $1, or free apps on the App Store.

Are those prices kept artificially high?

I can't imagine they'd be lower somewhere else...

I understand the argument. However... I don't think developers are forced to charge certain prices when they have the option to sell apps for $1 or FREE

A big part of the lawsuit is the objection to Apple's 30% cut.

So are developers really wishing they could sell their app for 69¢... but they must charge 99¢ just to cover the vig?

And again... what about free apps?

 

[mrex]

On the flipside... notice all the $2, $1, or free apps on the App Store. Are those prices kept artificially high? I can't imagine they'd be lower somewhere else...

I understand the argument. However... I don't think developers are forced to charge certain prices when they have the option to sell apps for $1 or FREE

A big part of the lawsuit is the objection to Apple's 30% cut.

So are developers really wishing they could sell their app for 69¢... but they must charge 99¢ just to cover the vig?

And again... what about free apps?

there are no such a thing like ”free apps”.

devs pay 99$ every year for apple. free apps or paid apps.

free apps are many time freenium apps, and when you use the in-app purchace function / subscription apple takes a bite. Free apps has many times a paid app version, apple takes a bit. Free apps make app store to look more ”full of apps” and hence promotes itself. do apple takes some revenue via ads nowadays?

appstore makes lots of money for apple .

 

[rocknblogger]

On the flipside... notice all the $2, $1, or free apps on the App Store.

Are those prices kept artificially high?

I can't imagine they'd be lower somewhere else...

I understand the argument. However... I don't think developers are forced to charge certain prices when they have the option to sell apps for $1 or FREE

A big part of the lawsuit is the objection to Apple's 30% cut.

So are developers really wishing they could sell their app for 69¢... but they must charge 99¢ just to cover the vig?

And again... what about free apps?

I’m not arguing that prices are high. I personally think they’re reasonable but maybe you can make an argument for IAP. Or maybe, if there was more competition we’d get better quality apps and games.

 

[macfacts]

No worries ... while I understand you can buy it from anywhere, the complaint from the plaintiff is that prices are artificially higher because of Apple’s 30% cut. (Developers charge more to offset this cost). Wouldn’t this be true in video games too? Since developers have to license permission from a Microsoft for Xbox games (and etc.) wouldn’t those prices be artificially higher because of that monopolistic license (only Microsoft can license for Xbox and etc.)?

It would be different if the plaintiff was saying that the fact the Apple is the only store is driving up prices, but that isn’t the complaint. The complaint is Apple’s fee which is why I think the correlation to video games fits.

It isn't illegal to charge dev fees or licence fees. It is possibly illegal to force devs to use one store.

No one is currently suing apple for charging devs fees.

Right now, a new game store (for pc?) set up this week by fortnite maker and they only take 12 Percent. That is proof that other stores could take a smaller cut.

 

[Master Atrus]

It isn't illegal to charge dev fees or licence fees. It is possibly illegal to force devs to use one store.

No one is currently suing apple for charging devs fees.

Right now, a new game store (for pc?) set up this week by fortnite maker and they only take 12 Percent. That is proof that other stores could take a smaller cut.

I definitely agree the new store shows possibly for PCs, however that doesn’t address video game consoles. There is only one approved location for XBox games and that is Microsoft. Same for PlayStation etc.

I’m just concerned about the precedent this will set if Apple loses.

 

[macfacts]

I definitely agree the new store shows possibly for PCs, however that doesn’t address video game consoles. There is only one approved location for XBox games and that is Microsoft. Same for PlayStation etc.

I’m just concerned about the precedent this will set if Apple loses.

Yeah there is only one digital store for the consoles but the existance of non digital/real brick and mortar stores mean Sony and ms dont have a store monopoly.

No one is suing apple for having the only digital iOS app store. They are suing cause apple has the only iOS app store. Stop being hung up on the stores having to be digital/online.

 

[rocknblogger]

I definitely agree the new store shows possibly for PCs, however that doesn’t address video game consoles. There is only one approved location for XBox games and that is Microsoft. Same for PlayStation etc.

I’m just concerned about the precedent this will set if Apple loses.

Maybe I’m misunderstanding something but I can go to a number of different retail stores to buy games for both consoles. I can also buy them from different online retailers.

 

[I7guy]

Yeah there is only one digital store for the consoles but the existance of non digital/real brick and mortar stores mean Sony and ms dont have a store monopoly.

No one is suing apple for having the only digital iOS app store. They are suing cause apple has the only iOS app store. Stop being hung up on the stores having to be digital/online.

They are not suing yet and we won’t know whether they can sue until June of next year.

 

[Alan Wynn]

I think you are shading it.
One of the arguments that came and went was that iOS was more secure because of the ability to buy and install outside the store. Then we had the rash of "OMG it's a Mac Virus/Malware..". This never came to fruition. Based on this, I am not seeing how you can realistically say iOS is going to be different.

I do not follow your point. Third party applications are less likely to be infected by viruses because they are all filtered through the App Store. On macOS, people can install applications from anywhere and as a result, there are a small number of applications that have been infected by viruses. The reason that number is small is simply that macOS’s market share (and absolute number of units in the market) makes the platform too small a target to be worth most virus developers’ time to target. In the U.S. iOS has over 40% of the market and a very large number of units, easily making it an interesting target - a clear difference from macOS.

 

[dk001]

I do not follow your point. Third party applications are less likely to be infected by viruses because they are all filtered through the App Store. On macOS, people can install applications from anywhere and as a result, there are a small number of applications that have been infected by viruses. The reason that number is small is simply that macOS’s market share (and absolute number of units in the market) makes the platform too small a target to be worth most virus developers’ time to target. In the U.S. iOS has over 40% of the market and a very large number of units, easily making it an interesting target - a clear difference from macOS.

So your concern is that this will turn iOS into another Windows.
But via apps.
Ri-i-i-i-ight....

 

[David.Kennedy]

And the number of people that care about this we could probably count on one hand.

The median IQ in the USA is 98. In fact, only 1/3rd of people are above the abstract/critical thinking threshold of 110.

The more cognitive are at the whim of the less cognitive, who outnumber them significantly.

Or put another way, the 10% get what the 90% will accept.

If feels good to be in the 90% doesn’t it?

Go, shout it from the rooftops. You’re in the majority. Go on. Go ahead!

 

[firewood]

there are no such a thing like ”free apps”.

devs pay 99$ every year for apple. free apps or paid apps.
.

Not all devs. Apple offers free dev accounts to certain non-profit, government, and educational entities.

Also, students and hobbiests can install iOS apps from source code using Xcode with a free personal provisioning profile. no $99 fee needed.