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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: 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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