back to article Apple's failure to duck UK antitrust probe could bring £785M windfall for devs

Apple's attempt to get the UK Competition Appeal Tribunal (CAT) to toss a lawsuit over its 30 percent App Store tax has failed, meaning the iMaker could eventually be forced to fork over £785 million ($980 million) in compensation to developers. In an order published today, a trio of CAT judges denied Apple's proposal to …

  1. CowHorseFrog Silver badge

    How come they limit the case to just Apple what about all the other "stores" ?

    1. Pascal Monett Silver badge

      One case at a time.

    2. I could be a dog really Bronze badge

      As said, one battle at a time. In this case, it's considering iStuff users - and Apple does (or did) have a pretty well watertight monopoly in putting programmes onto the devices. The devs, especially small ones, have no negotiating power over fees, and no-one has the option of just not using Apple's services and going direct to the user.

      I don't think Apple has a leg to stand on here. Yes, they can say that it's reasonable to charge a fee for hosting the store, handling the payments, and all that goes with it. But when the devs have no choice but to use it, then that's anti-competitive.

      In the automotive world, the manufacturers used similar arguments to make spares and servicing a (profitable) closed shop - as in, if you don't have your car serviced at our franchised dealers, using only our genuine parts and consumables, the warranty on your expensive new car is void. And of course, they played the safety card just as Apple plays the security card - "what if a garage fits substandard parts and causes a crash ?". Some years ago, the EU ended the exemption the automotive industry had from competition laws - and pretty quickly, main stealers became "less gouging" in their pricing, and parts became less eye watering in their prices. It's still often cheaper to go to an independent garage, but it's now the owner's choice rather than the manufacturer's.

      It's hard to see why the electronic world should be any different. After all, if your iPhone crashes, it doesn't tend to kill people like a car crash does !

      1. Anonymous Coward
        Anonymous Coward

        The devs, especially small ones, have no negotiating power over fees, and no-one has the option of just not using Apple's services and going direct to the user.

        No, but they have the option of just not developing for Apple's ecosystem at all.

        It's also worth remembering that the Apple iOS app store has been highly profitable not just for Apple but even more so for developers, because unlike Google Play on Android Apple's iOS app store brings in almost three times the revenue, despite the fact that iOS' market share is notably lower than Android's. That's because Apple users tend to not only be more ready to pay money for apps, they also tend to be willing to pay more (while on Android, most developers can only make some money through ads)

        There's a good chance that, once this is over, those developers may well find out they actually just slaughtered their golden goose.

        1. Anonymous Coward
          Anonymous Coward

          Errr, no

          So in your scenario there is never a monopoly, ever, because you always have a 'choice' to not do something?

          For info, that's not how monopoly law works. Monopoly law is focused on giving consumers choice through competition, and the 'choice' to pay what Apple tell you to or not do it at all does not cut it. There is no other way to get apps on an 'iDevice' other than via the App store, so developers AND device users have no choice and hence Apple can charge what the hell they like and make the T&Cs whatever they like. That is clearly anti-competitive.

          On Android, and even on Windows FFS (can't believe M$ have allowed this tbh given their track record) you do not have to use the respective store, so therefore you are not beholden to Google's fees and terms.

          1. Anonymous Coward
            Anonymous Coward

            Re: Errr, no

            "So in your scenario there is never a monopoly, ever, because you always have a 'choice' to not do something?"

            Nonsense. A monopoly exists when there are no other options, which isn't the case here because aside from Apple there are a dozen or so of other cell phone manufacturers to choose from.

            Android itself is an open platform anyone can publish for, right now, even for free (and Android has an even bigger market share than iOS).

            What all the armchair lawyers who got their degree at the Youtube University of Law forget is that Apple isn't even considered to be a monopolist (because there is no monopoly), it's considered a gatekeeper. And regulation of gatekeepers, which has only been introduced more recently, follows different rules than for monopolists.

            "For info, that's not how monopoly law works. Monopoly law is focused on giving consumers choice through competition"

            The purpose of competition laws is to prevent a single (monopoly) or a group a collective of vendors who collaborate to control the market (oligopoly) to prevent new entrants from entering and competing with existing players. Its aim is to enable competition, not to create it. That's another thing armchair lawyers tend to ignore.

            " and the 'choice' to pay what Apple tell you to or not do it at all does not cut it. "

            Apple can very much set its prices as they want to, the same as any other vendor can outside of certain markets which are price controlled. So yes, it does very much "cut it". Again, the contention isn't around the absolute percentage Apple charges, it's about the discriminative application of who pays it and who doesn't, which is the anti-competitive part.

            "There is no other way to get apps on an 'iDevice' other than via the App store, so developers AND device users have no choice and hence Apple can charge what the hell they like and make the T&Cs whatever they like. That is clearly anti-competitive."

            You seem to live under the illusion that there was a god-given right for developers to be able to publish to any platform whatsoever - which is nothing more than a pipe dream. iOS is still Apple's platform and they can very much decide who can publish on their platform and who can't. What they can't do is to apply their rules discriminately, i.e., giving some developers more freedom than others. And that includes their own apps.

            As mentioned before, regulation of gatekeepers is mostly a new thing (in the past competition laws were mostly focused on monopolists and oligopolists) and even regulators are not really sure how to handle them, and it will take years until precedents have been settled through the courts, both in Europe and in the USA. In any case, it's not as black and white as the internet army of armchair lawyers seems to think.

            1. I could be a dog really Bronze badge

              Re: Errr, no

              What people seem to be forgetting is that the dev has no choice other than "follow Apple's rules" or "not be able to sell to users who chose the iOS walled garden". Saying that you can develop for Android doesn't cut it - because someone with an Apple device isn't going to buy your Android app.

              Remember a while ago when mobile networks tended to offer inclusive minutes - but only for calls to other phones on the same network ? Calls to phones on other networks were generally "gouge whatever we can get away with" levels. Rightly, TPTB decided this wasn't on - because for the average user, they did not have a choice of which network(s) other people use. The end result was that people found themselves with no option but to go on the network the majority of their friends were on (they couldn't afford the call charges otherwise). This got especially difficult once people started porting numbers - because you could no longer tell what network someone was on by the number. I recall having "interesting times" back then as we had a couple of devices (one was a Nokia Premicell, the other was a different make - but they became generically known as premicells in the same way as people refer to all vacuum cleaners as hoovers) on our phone system. This worked fine - just route (say) calls to Orange numbers via the Premicell with an Orange SIM - get intra-network calling, money saved.

              But once number porting stopped being something only a few nerds (like me) knew they could ask for, we ended up paying more for inter-network calls than we saved with intra-network calls compared with just routing them via the landlines. But the walled gardens existed (e.g if most/all of your friends are on Vodafone, you have no practical choice but to go with Vodafone). In the same way, if your potential customers have bought into the Apple ecosystem, you have no practical choice but to develop to Apple's rules. Yes, you can simply not consider Apple users part of your target market, but for most businesses, that's not a practical option.

    3. katrinab Silver badge

      If you are on Android, there are alternative ways to install apps.

    4. Doctor Syntax Silver badge

      How come they limit the case to just Apple what about all the other "stores" ?

      Let's say we have Apple store and ANOther store. We now have 3 groups of developers: 1 Apple only 2 Apple & ANOther, 3) ANOther only

      So we now have, in the one trial 1 & 2 vs Apple and 2 & 3 vs ANOther. Group 2's lawyers are fighting two different adveraries at the same time. Jury are trying to keep rack of who's suing whom. 1 & 3 are sitting wondering what's going on when the adversary that's not theirs is being argued about. Add further combinatorial explosion if more stores are being sued at the same time.

      No, can't imagine why it's just Apple being sued in this case.

    5. Chet Mannly

      Because on Android there are multiple app stores, and sideloading is allowed.

      While Google's cut is basically the same as Apple's (or was the last time I checked) it's less clear cut that they qualify as a monopoly, whereas Apple's app store is clearly a monopoly.

  2. Pascal Monett Silver badge

    So, the fruit cart is facing legal trouble

    Looks like the days of Cupertino riding high on other people's work are coming to an end.

    5% is enough for Apple to still gain money and provide Store services at their current level but, of course, why settle for 5 when you can gouge six times more ?

    Well six times more is too much, and the rising number of lawsuits tends to prove that Apple is going to have to lower that ratio permanently.

    It might choose to do so on its own terms before having to bow to a law (ie set the bar lower to appease everyone before you're forced to set it really low).

    1. sgp

      Re: So, the fruit cart is facing legal trouble

      5% is a lot. Your average supermarket only gets 1-2% and they have a lot more costs.

  3. elsergiovolador Silver badge

    Apple margin shouldn't be higher than 1-2% on online sales.

    Otherwise this is bad for the economy. They are sucking the money out of SMEs preventing it from trickling down.

    Good chunk is probably spend on our adversaries in China.

    For any sensible country it would be a no brainer to shake Apple tree off people's money, they take without reason other than greed.

  4. LybsterRoy Silver badge

    How many really believe that is Apple reduce their charges the developers will reduce the cost of apps?

    1. druck Silver badge

      Competition amongst devs should lower the price of apps, as long as the app store owner isn't allowed to bar having more than one of the same type of app, as Apple do.

      1. Anonymous Coward
        Anonymous Coward

        That's not correct, apple do not stop multiple apps of the same functionality being in the app store, they stop apps that replicate functionality they (apple) have provided.

    2. Jimmy2Cows Silver badge

      Re: developers will reduce the cost of apps?

      Maybe they will, maybe they won't. But really, that's not the point here. The blatant gouging is what's driving this lawsuit, and the only reason that gouging exists here is because of Apple's total monopoly on the appstore.

      End fo the day, devs will charge their costs plus whatever the market will bear. The total amount the market will bear may not change, but less of that total will be going to Apple to squirrel away in offshore tax havens, and more will be going to the devs who actually do the work.

    3. Bitbeisser

      How much are they supposed to lower the prices? A lot of run-of-the-mill apps are just a couple of bucks anyway, do you have any idea how many you need to get paid for to just break even with your very own development costs. And if Apple if just taking another 30% of those couple of bucks, that means you need to sell a lot more of your app to even start to make any money. And don't forget that you have to pay another Apple tax as you need to have a Mac with the latest version of XCode to even get the code signing to get the app in the store in the first place...

      Sorry, but what Apple does is just highway robbery. And yes, Google needs to made to change their commission scheme as well, Likewise Microsoft for their 12%/15% they are charging for games/apps in their store.

      It's not that they shouldn't take a free for providing the service of that store, but IMHO, anything above 5% is absolutely excessive....

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