Apple won't be appy: US Supremes give green light to massive lawsuit over App Store prices Folks can sue Apple in the US for forcing app developers to pay the iGiant a 30 per cent commission, America's Supreme Court has decided. The tight 5-4 decision today [PDF] against Apple has huge implications for not just for the tech giant – whose share price has fallen six per cent this morning on the news – but also Google …
And that seems to be the key. If something has options, it's less a monopoly. You can put Linux on a PC. You can attempt WINE etc.
You cannot put even Lineage OS on an iPhone (unless things changed recently).
I mean, the dedicated can run Windows 95 on an Apple Watch. But for consumers, there is little choice in who to pay, and what price to pay for what type of product.
I think Apple only got away with it for so long because they are the hardware providers, unlike MS with windows who allow a lot of 3rd parts hardware (understatement ;) ).
Now people realise, it's similar to John Deere and right to own/repair/use as you see fit. Apple arbitrarily blocking others is not helpful to the consumer. A "trusted bit" (similar to Samsung Knox IIRC) would allow Apple to have their cake and eat it. They get security, secure enclave etc etc, and if you user wants to install their own OS/App store, then Apple could theoretically drop those services they cannot guarantee with others software.
If you consider running LineageOS to be an "option" then jailbreaking is your option for the iPhone. There are probably more jailbroken iPhones than Androids running LineageOS.
But I agree, if Apple was hit with this they'd just provide a "supported" way to jailbreak that left the hardware warranty in place, but disclaimed any warranty software wise. They'd probably need to also provide a supported way to "unjailbreak" that involved a complete wipe down to DFU mode and reinstall of the OS to return to a fully supported state.
But the case is not at all about operating systems. They're not saying that there should be some alternative to IOS that runs on iPhones. At most, they're saying that IOS should allow sideloading, and they may simply be saying that there should be more control of app pricing and a lower commission. If a case did happen with the decision saying that apple needs to provide an alternative OS loading facility, it would be problematic for every manufacturer of android devices that has ever produced a bootloader that isn't unlocked. Even those that were hacked to provide the functionality didn't actually intend to provide consumer choice. So that probably wouldn't succeed, but is definitely not what's at issue in this case.
You also have to dominate a market for antitrust law to even be applicable. Apple has less than 50% of the phone market in the US, which isn't enough to consider 'smartphones' as the relevant market in this case. They will have to argue the relevant market is 'apps for a single company's phone'. I'm not aware of any case that has successfully made an antitrust argument like that.
If that line of reasoning worked, conceivably this could open up a local movie theatre to being sued because they don't let you bring in outside food, or a restaurant with a great patio but shitty food sued by people who want to order a pizza from someone else to be delivered to their table in that restaurant's patio. Maybe some people think those things should be allowed, but the business world would fight tooth and nail against such an outcome.
The law generally treats "standing to sue" cases with a pretty low bar, so it isn't surprising that this lawsuit was allowed to go forward. I am surprised at how thin the margin was, and that Kavanaugh was the swing vote. He's already ended up on the 'liberal' side of a decision more often than I'll bet his supporters were expecting when they were loudly cheering his appointment.
"Apple dominates the iOS application store, with 100% market share. That's pretty dominating"
Market share of what? Their own platform? Their own handset? Certainly not the smart phone market. It is amazing that apple dominate their own OS, their own handset. Its theirs of course they do, it belongs to them.
Anyone can have 100% market share if you remove measuring anything beyond themselves. Damn, McDonalds has 100% market share within those big M outlets.
Market share of what? Their own platform? Their own handset? Certainly not the smart phone market. It is amazing that apple dominate their own OS, their own handset. Its theirs of course they do, it belongs to them.
Indeed. Don't forget the monopoly that is El Reg. How dare them only allow the people they want writing articles for their site! That's 100% control of the flow of information. What happened to freedom of speech?!? /sarcasm
Apple has for the iOS app developers 100% market share in the distribution of the app and in the payment service that handles the sale of digital goods.
Google has no such thing for the Play store
This is exactly the reason why Spotify went to the EU commission to complain about the Apple App store but not about the Google Play Store
@cropr
"Apple has for the iOS app developers 100% market share in the distribution of the app and in the payment service that handles the sale of digital goods."
Thats why I went through the levels of market share. People know what they are signing up to with apple or google, As you say on apples platform, in apples app distribution apple controls distribution. That is a very specific level very clearly stating it is within apples very specific realm. So yes at that level I can expect they have 100% market share.
As you say they dont have to do it that way but that is part of their product/service. If people dont like it as you say they can go elsewhere.
It's more like an duopoly / oligopoly, as between Google and Apple they dominate the mobile smartphone market.
Sometimes in duopoly this can help customers, for example AMD has historically restricted the ability of Intel to charge more for x86 processors. However when you have two or more businesses that work together, then things can go bad.
Even for a monopoly things can be unclear - there will be a period where the monopoly is great for consumers - for example Google maps is free. However sometimes you need to start breaking down the monopoly to avoid potential future consumer impact when prices are raised, but initially this just looks like you make thinks worse for the consumer. Unfortunately people tend to be very short sighted and don't see the long term benefit.
If they compete for the same market and switching between competitors is easy - you could use an Intel processor today and an AMD tomorrow and your hardware/software investment is not lost.
In this case is not really a duopoly but a competitive market restricted to two players - as long as they have reasons to compete and not to become a cartel.
"The monopoly revolves around there being no competition allowed."
Correct. In a bit more detail:
a) you can't run an application on your phone [without jailbreaking] that is NOT from "the store";
b) you cannot publish an application not THROUGH "the store"
c) Apple regularly REJECTS applications they don't like from "the store."
Therefore, it's a monopoly if you have an iDevice.
In Google's case (for Android), none of this is true. With an extra hoop to jump through on the client side, you CAN just load any old APK from anywhere. And jailbreaking is really only needed if you want super-user access to the Linux OS.
So, technically, Android "the Store" isn't quite in the same boat. Not quite...
Microsoft seems completely benign by comparison but their Windows 10 Store seems to be moving in that direction.
On Windows you at least have Steam and a few other similar stores. I suspect the anti-trust hammer would start being applied if they tried to prevent the rival stores from operating.
I for one would be really interested to see how much the Apple App store costs to maintain vs profits, as well as just how much overhead the processing fees entail.
If the margin isn't outrageous, then the case isn't very strong.
But given the scale involved, I suspect the margin *is* outrageous.
This is excluding the economic reality that the apps are the razor to the iPhone being the razor blade... or in other words, an iPhone with no apps would be considerably less worth its price.
This decision may embolden Spotify (and likely others) to file suit in the US instead of just the EU over Apple's corresponding 30% vig of any in-app purchase (and the prohibition for the vendors to tack the difference onto the price.) They have deeper pockets than any solo developer or customer and the damage to Apple from losing that subscription income is likely to be more serious than losing x% on the less frequent (maybe even one-time) purchase of applications.
I hope this issue gets rolled into the court case as I think it is actually more significant, a bricks and motar store getting 30% of the RRP price isn't that unusual, it is the cost of having it available for advertising (excessive probably in the digital case but not totally unprecedented), what is pretty much unprecedented in consumer relationships is that shop then claiming 30% on secondary sales which occur within the product.
I think there is a lot to argue about that, and I think the margin should be lower or zero, but it is worth keeping in mind that you can have a payment system in an app that bypasses Apple's in-app purchasing system (E.G. please sign into your account, from which you will pay your bill with your credit card information). It is more difficult than letting a user press a button and authenticate with Apple, but it can be done and is in many applications. This option is very much not available when purchasing apps, although you can go the route of having a free application that makes you sign into an account and pay from there, which developers don't choose to do very often.
Nope. What's needed is a market in ways to distribute apps to end-users. Where those ways are located is immaterial, and in any case it'll probably be somewhere cloudy.
For Apple to offer a high-price curated app store, with its own endorsement (whatever that's worth) on contents available from there, is perfectly fair. For it to prevent distribution outside that channel is not - that's an abuse of monopoly. As if Amazon took technical measures to prevent us downloading from Gutenberg to a kindle.
"You can buy different bricks of course but no one can seriously argue that they are that diverse."
Spoken like someone who's never had to shop for bricks. They come in all kinds of different types, sizes, materials and colors, ranging in price from cheap, through "might it be cheaper to just build my house out of android phones?" to "how the fuck is a brick this expensive without being made of solid gold?".
If developers had to print marketing materials, package their software on CDs and then persuade physical stores to sell the stuff then they would think that 30% was an absolute bargain, since those production costs were then accompanied by a > 50% margin from the retailer complete with sale or return clauses.
However, the world moves on and the question becomes: has Apple received enough reward for establishing a secure, trustworthy electronic store that developers are desperate to use (but not pay for)?
The answer is probably yes, but what is a reasonable price?
Developers need to remember that if Apple is forced to open up to 3rd party stores then every scammer under the sun will be there. Net effect will be that no other store will have any level of trust with consumers and developers will be back to using the Apple store.
> If developers had to print marketing materials, package their software on CDs and then persuade physical stores to sell the stuff then they would think that 30% was an absolute bargain
True.And I remember having to duplicate floppies for the latest round of bug fixes.
On the other hand very little such software was sold for a just couple of dollars.
"Developers have a number of platforms to choose from to deliver their software — from other apps stores, to Smart TVs to gaming consoles
Yes a number of platforms that doesn't include your iPhones and Pads. I'm yet to hear of an alternative store for them.
We’re confident we will prevail when the facts are presented and that the App Store is not a monopoly by any metric.
ROFL I can't believe they said that. Do they actually believe that?
So Valve about your Steam markup?
I once had a Nissan car and could only get GPS map data for it from Nissan. Was that a monopoly?
I would argue not, because I didn't have to own the Nissan car, it was my choice. Other cars are available.
Likewise, other smartphones are available. I have owned iOS and Android devices and used each for years.
This case seems to argue "We like your products and services, and want to continue using them, however we dislike the way you run your business and will resort to law to make you change it". Surely, in a correctly-functioning free market, consumers change business conduct by simply buying competing products.
Makes me wonder about the real motivation of the complainants in bringing this case rather than just buying Android phones - they are much cheaper than lawyers.
You could, however, use any 3rd party GPS navigator - and there were lots - in your Nissan without paying Nissan anything at all. Can't do it with an iOS app, which is the whole point.
A better analogy would be a Nissan car that would use only a Nissan-approved fuel that you could only buy at a premium at a Nissan petrol station. Yes, you could switch to Toyota, but that would put you in essentially the same situation w.r.t. Toyota-branded fuel, but with an additional wrinkle that you would be able to use 3rd party fuel provided you swapped the original Toyota motor for something else and thus voided the warranty (and, for a car, possibly also insurance).
In fairness, neither Nissan nor Toyota ever put you in such a situation. The whole "if AAPL made cars" analogy is illustrative only.
How does that have any relevance to this question? It is possible for a completely honest company to have a bunch of money. It is possible for the worst monopolist on earth to be losing money anyway. Are you trying to say that Apple must be a monopolist because they have a lot of money? It seems a lot more logical to argue that Apple are a monopolist because they engage in monopolistic practices.
Apple said: "...only app developers should be able to sue it for what it charges them, especially since they are able to pass the cost onto their customers"
Aren't Apple basically agreeing with the plaintiff here by admitting that costs can (and of course, ARE, because the money has to come from somewhere) passed on to the consumer?
Besides, it's plainly obvious that 30% is a ludicrous commission to take - it is (as the suit states) money for (virtually) absolutely nothing
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