back to article UK monopoly watchdog launches probe after iOS app makers slam Apple software store's draconian T&Cs

The UK's antitrust watchdog has launched an investigation into Apple’s app store after developers complained its strict rules are an unfair stranglehold and may break competition law. “Millions of us use apps every day to check the weather, play a game or order a takeaway,” Andrea Coscelli, chief executive of the Competition …

  1. Hubert Cumberdale Silver badge

    "A spokesperson for Apple was not available for comment."

    Ha. Like it.

  2. Anonymous Coward
    Anonymous Coward

    The new version upgrade is free......but you need a £3000 new machine to run it!!!

    It's not just "apps". Quite common for Apple to design "the next version" of a desktop application so that it won't run AT ALL on older hardware. "Sorry John...you'll need to shell out for a new machine in order to run the latest version."

    1. stiine Silver badge

      Re: The new version upgrade is free......but you need a £3000 new machine to run it!!!

      Hopefully the next iPhone will be $4000, or $5000.

    2. Anonymous Coward
      Anonymous Coward

      Re: The new version upgrade is free......but you need a £3000 new machine to run it!!!

      So, you're saying that evolution should not be allowed if it means an app can't run on an old system?

      1. Jimmy2Cows Silver badge

        Re: The new version upgrade is free......but you need a £3000 new machine to run it!!!

        Not what the OP said at all. OP is talking about OS upgrades; the assertion seems to be they could presumably work fine on older machines but are deliberately prevented from running / installing.

        Personally I don't know if that assertion is accurate, but this is what the OP seems to mean.

        1. Anonymous Coward
          Anonymous Coward

          Re: The new version upgrade is free......but you need a £3000 new machine to run it!!!

          Really? I can't see any mention of OS in the OP's post?

          1. doublelayer Silver badge

            Re: The new version upgrade is free......but you need a £3000 new machine to run it!!!

            They do it all the time, although in fairness so do a bunch of other people. The workflow works like this.

            1. Release a new OS version. If you try to install it on older equipment, it will refuse. This despite the older equipment not necessarily having worse specs than equipment that chooses to run. If a laptop processor is similarly fast as a desktop processor, but the laptop can't run the OS and the desktop can, they don't have a technical reason.

            2. Make an update to a desktop app. If it is installed on the older OS, it will refuse to run. Even though they may not be using any features unique to the new version.

            3. "the next version" of a desktop application so that it won't run AT ALL on older hardware."

            4. Repeatedly remind users of the old version on old OS on hardware which won't upgrade that there is a new version just to frustrate them. This isn't part of the system, but they do it and it's annoying, so I figure I'd mention it.

            Compared to, say, Windows which may not run well on old hardware but will at least try until the user gives up on it, Apple's software is effectively cutting off the users.

        2. iron Silver badge

          Re: The new version upgrade is free......but you need a £3000 new machine to run it!!!

          No he wasn't. If he had been talking about OS upgrades he would have used the words "OS upgrades" but he used the words "desktop application" so you're wrong.

          1. doublelayer Silver badge

            Re: The new version upgrade is free......but you need a £3000 new machine to run it!!!

            As I describe above, they do it with an OS version and then tie all the desktop applications to the OS version. So it's both.

    3. mbdrake

      Re: The new version upgrade is free......but you need a £3000 new machine to run it!!!

      How long should developers support applications for on specific hardware configurations, and how long should Apple support their own hardware?

      1. msobkow

        Re: The new version upgrade is free......but you need a £3000 new machine to run it!!!

        A LOT longer than the paltry few years Apple and Google "support" an OS in order to force you to buy new hardware... I've run Windblows on 10 year old hardware that was "good enough" for what I needed to do. You flat out CAN'T do that with Apple and Google systems.

  3. Anonymous Coward
    Anonymous Coward

    Payments v content

    I could agree to something being done about payments and charges, but I have no problem with the way that Apple audits all content before allowing it on the app store* as it does help to stop malware and scam apps getting on. I'm also happy with things like the recent changes to T&Cs that require data slurping to be declared.

    * Except where a rejection is for (anti) competitive reasons.

    1. Gene Cash Silver badge

      Re: Payments v content

      Except when your app isn't malware, but you get an "application rejected" and Apple refuse to say why.

      Google isn't any better, however.

  4. Andy The Hat Silver badge

    In two minds ...

    If I build something, supply my software and my hardware to support it and, perhaps a third party has an idea for an extension they want to produce and I agree to sell it to my customers for a cut subject to conditions a,b and c. After all, it's my product, I want to control it and if I make little money as a company that's apparently fine. At what point does my company become big enough that I can no longer control my product in that way - at what point does 'normal' behaviour become monopolistic? After all, in this case, Apple cutomers could go elsewhere and buy a Windows or Linux or whatever box instead and developers could develop for other platforms so it's not a monopoly in the overall computer market, it is a seller of it's own specific product with its own product control ... I'm not agreeing with Apple's actions, just curious to know when you are forced to lose control of your product because it's too popular ...?

    1. Aristotles slow and dimwitted horse Silver badge

      Re: In two minds ...

      I'm not quite sure as to whether you have answered your own question. I'm not defending Apple here BTW but I'm not sure lose control of anything, you still have the choice as to how you distribute your software and on what platforms. I quite like the fact that Apple vet and review apps as it keeps all of the malware and ad infested crap that plagues the Google play store away from my iPhone.

      On the other hand, I think the % cut that Apple take is still very steep. I don't doubt that Apple have significant annual costs in maintaining the App store infrastructure and platform and content etc but I'm pretty sure that it is highly likely to be 90% profit for them these days. Perhaps a choice of payment processors could be offered to make the whole thing a bit more competitive, but I guess you'd still be at the whims of some back office secret handshake between them all to maintain the illusion of better value for the end user.

      Tough one to agree on I guess.

      1. gnasher729 Silver badge

        Re: In two minds ...

        30% is low compared to what people pay in retail stores. But the 30% also pays for all the free apps that pay nothing to Apple.

        1. doublelayer Silver badge

          Re: In two minds ...

          No, the 30% goes to Apple. The free apps either come from third-party developers, who get none of it, or from Apple, which wrote them to encourage the sale of their products. Apple wrote their production software like iMovie before they had an app store at all. Most free apps come from developers who are not getting anything from Apple to develop them.

    2. Brad16800

      Re: In two minds ...

      To me it comes back to something like Windows and IE browser as default. I know iPhones aren't exactly 95% of all phones people have but the point was choice. If there was an option to use a different app store (even if it wasn't secure and rarely used anyway) the problem wouldn't exist.

      And 30% is a bit much, actually I was wondering on that for food ordering apps. Does Apple take 30% of the 3rd party app then the 3rd party charges the restaurant that + their cut? Had me thinking on if it's even worth using as a restaurant on their margins. Anyone have insight on it?

      1. gnasher729 Silver badge

        Re: In two minds ...

        To answer that: Apple wants 30% of everything ordered through your app and delivered to your iOS device. If McDonald's sold pictures of Big Macs for £0.99 that you could download on your phone, Apple would want 30 percent. If you order a real Big Mac for you to eat, Apple doesn't allow this to be purchased through Apple's in app purchase system, so they _can't_ take any cut. And anything sold outside your app is also free, which is why you can pay for Netflix on their website, and Apple gets nothing of that.

    3. Naselus

      Re: In two minds ...

      Theoretically, even if you only had 1 customer but you exercised monopolistic control over access to them, you can be forced to lose control. Just no-one would bother to sue you because you're monopolizing access to Peter's wallet.

      The monopoly Apple is exercising is on the aftermarket. Yes, Apple users can change to another device if they want to, but they're not the ones who are being unfairly affected by the monopoly and so they have no incentive to do so. It's developers who want to access those users who are, but since the customers aren't incentivised to move they're powerless to act against the monopolist. Since the App store is the only way to sell apps to people using iPhones, and there's no alternative storefront permitted, you must deal with Apple to access the aftermarket of iPhone users. Apple take advantage of that fact to charge rents to developers wishing to do that - a more literal 'Apple Tax' than the absurd markups on $999 monitor stands and $600 wheel castor sets.

      Apple execs themselves have admitted that the app store is almost pure profit. The 30% figure was plucked more or less out of thin air, and while Apple (and Google, and Steam, for that matter) like to compare themselves to bricks-and-mortar retailers (which charge a much higher markup, so 30% looks great), most economists think a fairer comparison for what's actually provided are payment systems like Visa or Mastercard - which have been extremely profitable for half a century charging just 3%.

      Other examples of this include the Epic games thing - Epic have their own payment system for in-app purchases, since they're running it on multiple different platforms. Apple shut them down because they insist on you using Apple's payment setup, even if you don't need to or want to, and then charge you 30% of your revenue for the privilege.

      It's a monopolistic abuse of their position as the hardware vendor to force software vendors to pay them a tax to access users, and is far more egregious than anything Microsoft did in the 90s.

      1. DS999

        Re: In two minds ...

        Apple has said their costs amount to around 1/3 of what they make from the App Store - so if they switched to a 10% cut instead of 30% they'd break even.

        So clearly people comparing to the 3% cut credit card payment processors take have no idea what they're talking about.

        1. Richard 12 Silver badge

          Re: In two minds ...

          Their annual financial filings indicate that cannot possibly be true.

  5. Anonymous Coward
    Anonymous Coward

    I'm sure they'll change their mind

    once the brown envelopes have been dispatched.

  6. gnasher729 Silver badge

    Has everyone mentioned yet Epic, maker of Fortnite, which was removed from the App Store for breach of Epic's contract with Apple? Cunningly and deliberately planned so that Epic served court papers against Apple two hours after they were thrown out? And TenCent, the Chinese $750 billion company that largely owns Epic? They have been spending lots of money for lobbying in the USA, with the proposed law change in Arizona mentioned, and a similar one in North Dakota thrown out, and in both cases the proposed new law written by lobbyists paid by Epic.

    I'd have a look at who is paying for the complaints in the UK.

    1. Naselus

      Epic had a good point and would've had a solid case if they hadn't messed about with stupid PR stunts in breach of contract, tho.

      1. SImon Hobson Silver badge

        But sometimes, the only way to make progress is to force the issue.

        It may seem like a big PR stunt (and yes, there is an element of that), but the alternative is that Epic complain to regulators and wait a few years or decades for a decision. By forcing the issue, they've given themselves an opportunity to file for themselves in court and effectively fast track it - though it'll still take years and will cost a fortune.

  7. DS999

    So how is Apple supposed to pay for the App Store

    Given that apps are allowed to be free (meaning Apple makes nothing off the download / updates) if the law requires them to allow companies to process their own in-app payments with Apple collecting nothing on that end either, why shouldn't we expect that EVERY app will quickly convert to this model? The App Store revenue would be $0.

    I guess they wouldn't have to worry if there was a law requiring them to allow 'alternative' app stores because no one is going run one when they can't make a penny doing so.

    1. doublelayer Silver badge

      Re: So how is Apple supposed to pay for the App Store

      Apple can run their payment system as the most popular one. Every Apple user has an account which works with it. People already trust Apple Pay to do in-person transactions too. That's a pretty good reason for people to choose to use it. Developers of apps which are currently sold normally could use the Apple payment system and not have to set up any complicated payment systems themselves. Also, Apple could continue charging developers annual fees which pay for the relatively minimal bandwidth required to send packages.

    2. DevOpsTimothyC

      Re: So how is Apple supposed to pay for the App Store

      There's plenty of ways for Apple to monitize this. Why don't they just charge the app makers for bandwidth used by end users downloading their apps ?

      If the app maker is marketing their apps well then paying Apple for bandwidth is a small cost of doing business and trust me the sort of connections and caching that Apple is using the per GB cost is fractions of a cent.

      Apple could also take the in app payment processing fees down to a reasonable level. If Apple is going to charge me 30% to handle payments I'll probably look elsewhere. If Apple are going to charge me 6% and a bank are going to charge me setup fees plus 5% I'd probably stick with Apple until the 1% difference was a sizable amount (the tipping point for most businesses is in the tens to hundreds of thousands).

      1. DS999

        Re: So how is Apple supposed to pay for the App Store

        The App Store is more than just "payment processing". Apple said that their costs are about 1/3 of the total App Store revenue. So their expenses are 10%, because they do much more than what Visa or Mastercard does.

        1. Richard 12 Silver badge

          Re: So how is Apple supposed to pay for the App Store

          Link?

          Apple don't publish that data, so you're either quoting hearsay or lies.

  8. arthoss

    It’s draconian for a good reason. The walled garden has its advantages.

    But if it comes to that, where devs will need to pay to publish. I can imagine that most free apps will disappear. So what will it be one update in a quarter included in the Xcode subscription? Depending on the number of downloads send an invoice to the developers? Or disable downloading for an app once the prepaid limit has been reached? The in app buy could be developed with other providers but then the tracking on Apples side will still need to be supported. Or else, what will support do when there is an issue? It will make things more complicated for users. Life is already so complex I really don’t want to deal with several app support places for my iOS devices.

    I have the popcorn and looking forward to June 2021!

  9. msobkow

    While I understand no one is required to develop for or support the Apple platform, and it is such a small percentage of the market it could never be considered "monopoly abuse" for Apple to impose its T's & C's, but I never have appreciated the unfettered GREED of American businesses, and Apple is one of the worst, second only to Amazon.

    Anything to snare those extra few pennies from the consumer instead of settling for the BILLIONS they already have... :(

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