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Microsoft Tells Congress That iOS App Store Is Anticompetitive:
US regulators are taking aim at big tech firms like Google, Apple, and Amazon, with the potential for antitrust cases later this year. A House committee is gearing up to question the CEOs of major technology companies, but Microsoft President Brad Smith has already chatted with the committee. Smith reportedly expressed concerns about Apple in particular, specifically when it comes to its handling of the App Store.
[...] According to Smith, the recent disagreement over the Basecamp Hey email app on iOS exemplifies the problem. The app needs a $99 annual subscription, but there was no way to purchase it in the app — users had to go to the web. That didn't please Apple, as it circumvented the 30 percent revenue charge. Apple resisted approving the app, only doing so when public pressure ramped up, and the developers added a 14-day free trial for iOS users.
[...] And that's at the heart of the antitrust probe: Is Apple harming competition with its policies now that iOS is one of two dominant mobile platforms? It might take a few years for the government to decide that one.
(Score: 4, Insightful) by vux984 on Wednesday July 22 2020, @07:07PM (10 children)
"What specific "anti-competitive" behaviour are they doing that's illegal?"
That's for the courts to decide. Antitrust law is nuanced and complicated with rulings in different directions based on precise circumstances and it's heavily influenced by precedent; to the point that the letter of the law is almost beside the point. Much of what apple does is CLEARLY anti-competitive. Whether it violates the law CAN'T be decided without a court case to rule on it. And each country has its OWN law, of course. So even if its legal in the states, it may not be legal in India or Canada or Australia...
Blocking 3rd party stores _might_ be illegal in some jurisdictions
Requiring apps to process payment through apple _might_ be illegal in some jurisdictions
Requiring in app purchases or service subscriptions to be processed through apple _might_ be illegal in some jurisdictions.
When I buy a license to a multi-platform game, on humblebundle for example, i frequently am granted license to use the title on mac, windows, linux, and android. But not ios. The fact that Apple restricts the developer from including the ios license might be illegal in some jurisdictions. Ditto an ebook, music, or movie service.
My understand is that the reason I can't even buy a game for my **windows PC** using the steam app is because Apple insists that they must process the payment and take their usual substantial cut which Valve (rightfully) finds ridiculous. That might be illegal in some jurisdictions...
(Score: 3, Insightful) by Tork on Wednesday July 22 2020, @07:26PM (9 children)
For the purposes of this discussion "likely to be illegal" is just as good for me right now. If Apple has market dominance anywhere I don't know what it is. Maybe smart watches, been a while since I've looked that up. Computers/Laptops, tablets, phones, music players, music services, video streaming, news service, tv service, I can't think of anything where Apple has any sort of market situation like Microsoft did. I'd love to be corrected on this because I cannot follow the line of reasoning that suggests Apple's behaving in some way that should earn an anti-trust investigation. I definitely do not understand. At least with Microsoft so many people WANTED computers that had Windows that they earned a de-facto monopoly so powerful they could bully retail chains. If you could point me at the Apple equivalent of that I'd be able to navigate this topic better.
What country would this be illegal in? a.) Why would any developer be required by law to provide licenses for more than one platform? b.) In few cases would the iOS version of a game be practically identical to other OSs, unlike Mac vs. PC or even PC vs. Game Console, that means separate dev budget (and often an entirely different developer...), and lots of other issues that make this kinda silly. When I switched to Mac in a few cases I needed to pay a fee to transfer from Windows to Mac, I don't believe that to have been illegal. c. ) This really has more to do with your last paragraph and I'm too lazy to quote it, but doesn't what you suggest make titles exclusive to a platform illegal? And if the answer is yes, would you be able to provide an example of what country that would be illegal in? I'm a little concerned that in my brevity I might seem a lil more argumentative than intended. Sorry about that. While I am skeptical, I'm also really am curious, I know next-to-nothing about how these laws work outside of the US and would like to hear more about what you're talking about.
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(Score: 3, Interesting) by vux984 on Thursday July 23 2020, @12:15AM (8 children)
I figure you are just trolling now. Apple clearly has significant market dominance in apps stores for mac distribution, and absolute monopoly control over apps for ios distribution. Now are you seriously attempting to argue that the ios eco-system is not a closed marketplace worth multiple billions of dollars?
You seem to be making a big deal about market dominance. Perhaps you think because android exists and has significant market share that nothing Apple does could be illegally-anti-competitive?? I'm not sure why you think that. It didn't work for banks attempting to product-tie unrelated financial services. They got smacked down over it by the courts and no bank has much more than 10% market share. Apple has 15-20% ios market share globally (depending where you look), 44-48% in the USA. In any case the courts look at more than just market dominance, and apple has far more dominance in the smartphone arena than any individual bank does in banking. ~50% of the smartphone market is a pretty dominant position no matter how you slice it.
The courts also look at all kinds of 'reasonableness' tests. For example, you could argue that walmart has a similar monopoly inside a walmart store. Walmart decides what's on the shelves, and you can't make any purchases without going through a walmart checkout, etc, etc, etc. But that fails on some obvious levels... consumers can very easily walk outside, cross the street, and buy stuff at costco. And you don't have to sacrifice using a $1000 phone to cross the street.
For a far better example you could argue, but Nintendo has the same monopoloy over Switch game distribution, and Microsoft has the same monopoly over Xbox game distribution... and I'd agree. But the courts might find that its reasonable for a consumer to own multiple consoles to access the different game offerings, they'll consider that games are purely a luxury good, they'd observe that in practice many families DO own multiple consoles, they'd take note of the argument that consoles frequently sell at or below cost with the game store monopoly enabling that, the console makers would argue that they are offering curation and quality control, and they might hold up unique partnerships with developers to create platform exclusives that would not be created at all otherwise, and the courts might consider that this business model and app store structure represents an overall benefit to the consumer IN THIS CASE.
Of course, Apple can make all the same arguments. But Apple is known to make healthy profit off every unit sold, phones are not purely luxury items and very few people actively purchase and carry multiple phones around at once (although in some cases companies may issue separate phones, but those are company issued phones and this doesn't represent an exercise of consumer choice), etc. The curation argument and quality control arguments do hold up, and there's going to be other considerations as well. So this doesn't mean Apple's app store is illegal, but the specifics of the case are in fact substantially different from a console, and the courts might decide that what is reasonable for consoles is not reasonable for smartphones.
a) I didn't say there was any law anywhere that REQUIRED a developer to issue a license to a product for every platform against their will. What I did say was that it could be illegal for Apple to PREVENT a developer from issuing a license to an ios product alongside other licenses in a scenario where developer actively WANTS to do that.
b) You are just stating your opinion, and its clearly incorrect. Steam and GoG demonstrate that developers are frequently happy to sell multiple-platform licenses for a single price, despite the extra effort it costs them to develop and release a version for each platform. Humblebundle goes even further as it demonstrates that some developers with titles that do cross the mobile-desktop boundary are happy to sell licenses accross all platforms they support. For example: https://www.humblebundle.com/store/super-hexagon. [humblebundle.com]
ios is only excluded because Apple prevents any mechanism for the developer to have your ios device recognize the humblebundle.com purchase. Many developers would be happy to include ios. I pretty much gaurantee given the android/ios duopoly right now, that if cross-mobile appstores were allowed to exist, many developers would be GLAD to sell multi-platform licenses, and even multi-user licenses. (Both android and ios have the concept of family-sharing app purchases, but only within their own ecosystem due to Apple's restrictions)
c) No. A platform exclusive is a title developed for a specific platform. Nobody is suggesting that if you develop something for one platform that you have to develop and make it available to all platforms. Quite the opposite really -- if you chose to develop something for multiple platforms (whether its a game, or an email program or a scientific calculator app, and you wanted to sell a license to all of them at once, should Apple be allowed to say you can't?
(Score: 2) by Tork on Thursday July 23 2020, @03:20AM (5 children)
Ummmm... k. No. 🙄 Settle down there Sparky, not interested in the green-site bullshit.
Why was it more effort to assert my position then claim it's weird that I do than it is to just ask: "Do you think all the laws in this area are strictly tied to market dominance?", which I think is actually a good question that would put us down an productive line of discussion because we definitely have different perspectives on this. Pity.
Yep, I phrased that poorly, moving a to the end of that might have made my intended point a little clearer. I apologize! I'll attempt to clarify: You said it was a multi-platform game but then you brought up an example of Apple saying no to the iOS license, my issue with that statement (assuming I understood correctly) was that there are very obvious and distinct reasons why Apple would do that and are unlikely to be in ANY legal trouble over that. Maybe you meant this as a more conceptual example than literal, so sorry if I misread you there. Looking at it that way, I did see that Android was mentioned but even then .. ehhhh... I mean, okay I kinda see what you meant now. With the other platforms on the list being so similar to each other, and with Apple being such complete buttheads about how you actually get onto their store, I have difficulty imagining it's as easy as porting a game from Android to iOS. I think I dropped it from the list, but it was load-bearing to your point ... maybe? Am I getting warmer, at least? It does matter, especially if Apple's stated reasons are in doubt and we haveta get into estimating intentions.
Also, could you please define what it means when you say Apple PREVENTS developers from developing on other platforms? I get the feeling you see this as they're standing outside with baseball bats and I think it's more like they've entered into an exclusivity agreement or MAYBE you mean that Apple won't recognize a third-party-acquired license... which would be a strange argument to make. This conversation will go a lot better if we can figure out which side of the fence we're on. Oh, and you can hand-wave away the importance of market-dominance all you like but the value of any threats they could make about which developer can develop for whom is directly related to the relative reward. They're not obligated to honor anything outside of their own business, nor should they be. If you're saying they bump into other laws unrelated to that then okay, could I get some specificity on which laws we're talking about?
And... he accuses me of stating an opinion, that's wrong, then goes on to state an opinion sprinkled with some speculation.... But, to be fair, it's neither right or wrong, it's just irrelevant until an actual broken law or something is brought up here. *sigh* Oh, and the effort to do the port DOES matter or you gotta rethink one of your earlier paragraphs.
Heh. As stated: Yes! There is nothing in this context that explains to me why this example supersedes Apple's ability to deny any developer or product they want. Now Apple's opening coffee shops and making their Macbook Pros incompatible with Starbucks wifi.....
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(Score: 2) by vux984 on Thursday July 23 2020, @06:39AM (4 children)
Again, I didn't say that. Please reread what i did say; "it could be illegal for Apple to PREVENT a developer from issuing a license to an ios product alongside other licenses in a scenario where developer actively WANTS to do that."
'This context' was just a particular example where apple's policy is clearly holding the ios marketplace hostage in a potentially illegal abuse of their market power over the ios marketplace. Do you agree the ios app ecosystem is a marketplace? If not what definition of marketplace as applied to competition law does it fail at for you?
https://en.wikipedia.org/wiki/Relevant_market [wikipedia.org]
The individual apps in the app store are the products competing against one another. Android apps are in a different relevant market entirely, because they are not substitutable goods for iphone apps. Desktop apps likewise are separate. It can also potentially be successfully argued that the iphone user demographic defines a virtual 'geographic market area' as it defines the "space" where "conditions of competition applying to the product concerned [ie the apps] are the same for all traders". This virtual space also accurately models the barriers to other similar markets -- e.g. the significant barriers to switching from iphone to android or vice versa.
And the broader arguments are well articulated in the coverage...
Smith also states, "I do believe the time has come, whether we are talking about Washington DC or Brussels, for a much more focused conversation about the nature of app stores, the rules that are being put in place, the prices and tools that are being extracted, and whether there is really a justification in antitrust law for everything that has been created."
[...]
The EU announced a formal antitrust investigation of the App Store and Apple Pay earlier this week.
[...]
The United States House antitrust subcommittee is also looking into Apple's App Store policies in a probe.
[...]
Because of the market power that Apple has, it is charging exorbitant rents [...] or denying access to their market," [...] "If there were real competition in this marketplace, this wouldn't happen."
https://www.windowscentral.com/microsofts-chief-legal-officer-calls-out-apples-app-store-policies [windowscentral.com]
(Score: 2) by Tork on Thursday July 23 2020, @02:20PM
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(Score: 2) by Tork on Friday July 24 2020, @11:52PM (2 children)
This question is why I wrote you the thank you note, thank you for it because it succeeded in making me think. The first time I read it I had an instant answer. But I wasn't able to reply to you so I had a little more time to chew on it. And now that I've thought about it more I kinda see what you're saying. First let me directly answer your question: I see the App Store as a store. A single store. Can I see it as being more like a Mall....? Ummm... yeah okay kinda. At least enough to go: "Ah, okay, I think I see what he's saying now." Someone wants to go to the App Store and set up shop, and boom they have a business. Cool. But where I get tangled up is that this store is for Apple Products or products made for Apple Products, and that's basically it and that's what you're served with the moment you get involved. This basically true even if all you're doing is porting your existing app. Where I start really teetering back the other way is when I think about how it compares to Google Play. I have no problem picturing Google Play as a marketplace and I think it's because it's a good deal more inclusive and, arguably, a lot less arrogant in its approach. There are no iOS TVs or refrigerators, even a car-radio using iOS is... erm... well you still need an iPhone. You can't really develop for Apple without them dictating to you from day one what you need to do to get into the store. So, in short, yeah I do get your point but I hope you'll also see why it's difficult for me to process. Anti-trust is typically about how a company like Apple affects other entities in a marketplace. When it's all about their own products and their own eco-system it's a good deal harder to run afoul!
Gee. Microsoft wants their competitor investigated and it happens to be of a soundbite "30 percent!!!" that'll get all the tech-sites babblin about it. 🙄 I'm sorry I can imagine you probably think I'm defending Apple or poo-pooing Microsoft or some other motivation... no it's not that, it's just in this article he basically says "Apple's big and popular and that means they're powerful!" but it doesn't say "Here's the actual harm they're causing", just a vague warning about the barrier to entry that, frankly, I think was more about PR than an actual legit complaint with teeth. HOWEVER, I did click the link from that page you mentioned in your reply and read the article about the EU announcing the investigation.
Emphasis mine. I'm glad you asked me the question about the Marketplace earlier because this part rings in a different way for me now, thank you for that because that article paints a good picture of what I was asking for. Basically Apple is causing trouble with Spotify, and I would assume Netflix, Hulu, HBO Max. etc., because they insist on that 30% cut and it's causing these companies to just eat the cost even though the App Store did nothing to attract these customers. Feel free to make fun of me for not reading the article earlier since it probably would have saved us some time if I had. The reason this one works for me but your cross-platform licensing bundle example doesn't is Apple doesn't have a mechanism to accept purchases outside of their control. Even if they had, so what? There still isn't a reason legal they'd have to honor it. But when they say: "give us 30 percent or nobody's listening to spotify on our phones" Ding ding ding! Winner!
Thank you for replying. You did get me thinking about this in a way I hadn't before and I really do appreciate it. Have a good weekend!
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(Score: 2) by vux984 on Monday July 27 2020, @04:28AM (1 child)
If you're game, there's one more detail I'd like to dig a little deeper into:
Ok; lets say I agree it's a store. I agree Apple is running a store for products that are 'for-customers-of-Apple-products-to-use-with-Apple-products'. Let's further say I agree Apple should be able to sell whatever they want in their store, and set whatever restrictions and so on that they want in THEIR store.
If Apple is 'just a single store' then the market solution to any problems real or imaginary with that store is for someone else to open another one. Except of course, there's the rub: Apple not only runs the only store that sells apps-for-iphones, Apple has taken strong measures to ensure nobody else can legally operate an alternative store.
And THAT is where i think the anti-competitive argument comes into play. Lego can't prevent a store from popping up and selling compatible-with-lego sets and parts. Honda can't prevent a store from popping up that sells compatible-with-Honda parts and addons. The fact that it's apps/addons for Apple devices seems irrelevant. Lots of vendors would love to be the sole source of "addons" for their product, but it only happens with software.
So what makes software fundamentally different? Such that Apple is allowed to prevent by force of law anyone else from opening a store that sells add-ons for their product. Surely that's not what the DMCA and related legislation around the world was for!
And then my multi-platform bundling situation is neatly resolved; because then humblebundle can release their own store to deliver ios apps to ios devices if they feel so inclined, and apple doesn't have to be involved.
Now of course, we've gone in a circle, and "what about Nintendo?". And to that, I think it's "not simple". The console business model shouldn't necessarily be illegal, but neither should it be protected to the absolute extreme ends of the earth. I think, perhaps, there is an argument to be made that what's ok for a game console doesn't necessarily scale up to a general purpose mobile computing device owned by half the population. That one passes the reasonableness test, and other doesn't.
Where I see hundreds of 3rd party developers in the app store; all completely beholden to apple for a significant chunk of their revenue and continued access to their customers. I certainly don't see "super hexagon" or "magic the gathering puzzlequest" as apple products even though they are available in the ios ecosystem. Perhaps if the apple app store ONLY sold Apple made apps I'd agree with you, but I see lots of other entities in play here.
(Score: 2) by Tork on Tuesday July 28 2020, @02:49AM
They did. Sort of. That's why Android is here. Android phones are a viable alternative to most of the iPhone userbase. Funny enough, though, if you had asked me about iPads my answer would be subtly different. Apple might just have a de-facto monopoly on the iPad, meaning there isn't a successful enough Android tablet to be considered a fair alternative. (I might be mistaken, I haven't followed tablet marketshare in years.) In that case I'm more supportive of regulation about how the store is used.
There's an important distinction, here: Apple's not really preventing someone by law from opening an App Store. Just like it's not really illegal to release a game for the XBOX ONE or PS4 without Microsoft or Sony's blessing. You could, for example, create a music CD (I chose that because I think the console will 'play' it....), label it as a PS4 Game, and sell it without being C&D'd because you're not allowed to publish PS4 games. (you'd likely get nailed for OTHER things but not because Sony has the exclusive right to create burnt game discs for their system.) The reason why you can't just burn your own disc and sell it is because they've placed technical hurdles in place that are sufficient to prevent you from trying. I'm not sure how they do it with this generation, I'd assume it's just encryption, but it wasn't that long ago that the media for consoles had the company logo to display. The console would detect that the image, which is copyrighted btw, is being displayed and then it would permit further execution. You couldn't release a game for that console without displaying that company's logo, and THAT you couldn't do without a license! I'm making the distinction here because this is not anti-trust law, this is copyright law. If it's encryption I think it's DMCA. Elsewhere in your post you ask if this is what they intended with the DMCA, the answer is yes, absolutely. It's all about publisher control.
I've written and erased a reply to this comment like three times now because I have an issue with your car parts example so when I went down the path of finding BETTER examples I found they all had issues, too! Heh. I'll try to work with what I got. I have limited knowledge on the topic of car parts so please bear with me, but I think car parts are heavily regulated because of how interwoven their sales are with insurance companies and litigation. Imagine if Honda said: "Your first replacement headlight is $100, your second is $1,000, but your third is only $1,400! Oh and if you don't like it, tough nuts cos the law says you have to have working headlights and we're the only ones that can do it!" Lego actually COULD prevent other companies from releasing compatible toys, they had patent protection up until a few years ago. While not the same thing, that's actually a much stricter control than going on a per-store basis. Keurig and Lexmark have been putting chips in their consumable products. Hell, APPLE does this, you cannot make Lightning-compatible headphones that will actually work until you get a license to put their chip in it. All legal. There have been PR kerfuffles and backtracking about it. There have been RELATED cases but not really what we're talking about. There might even be talk of changing the law. But right now I don't see where software is that different other than it's easier to do things like verify that you have a legit license sold to you by a different entity.
I have mixed feelings on this. I remember the 80's video game crash. I dislike the DMCA but I don't fault Netflix for using DRM for their rental streams. I don't see why Nintendo cannot control who makes games for their console. I also don't see why Nintendo can tell me that I can't run code they didn't okay on my console. But when it comes to the various stores, it really doesn't appear on my radar until actual control can be exerted. I don't think Apple can do that with iPhone apps. But you know, you did get me thinking, maybe they could with iPad.
I do think we're valuing the app store in different ways :/
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(Score: 0) by Anonymous Coward on Thursday July 23 2020, @06:12PM (1 child)
IANAL, but my understanding is that the "markets" under discussion are mobile devices, desktop computing, and gaming consoles. So it doesn't matter how much Apple locks down, for example, iOS unless iOS is the dominant mobile device operating system.
(Score: 2) by vux984 on Friday July 24 2020, @01:43AM
There are a couple counter arguments to that:
First even if "mobile devices" is the market, Apple has 20%+ globally and 40%+ in the United States. That is still substantial market power; and there is no hard requirement that you need to have >50% before they can look you. The bigger your market share the more scrutiny it draws of course, but antitrust just requires your market power to be substantial enough that you can abuse it. Apple has massive power over what app developers can do and holds absolute sway over access to a massive segment of the mobile market. That makes them very dominant player in the mobile app market.
Second, the ios app ecosystem could be determined to be a relevant market on its own merit; separate from 'mobile phones'.