The law does not require that Google and Apple run their online stores the same way, or that Apple interact with Google's store the same way they choose to run their own store.
That's correct. But the law does require them to run the stores in a way that does not violate antitrust laws. Apple is violating antitrust laws by forcing companies to use Apple Pay as a condition of using the App Store (i.e., leveraging dominant/monopolistic market position in one market in a non-competitive manner over another market). Apple cannot then do the same thing it prohibits in its own app store in the Google Play Store, which has similar rules, because both of these actions have the effect of taking legal positions.
In fact it's arguable that a free marketplace encourages and depends on different companies taking different approaches to meet customer demands.
Which Apple does not permit. It's literally Apple's way, plus a 30% cut for doing nothing, or you're not even allowed to play. And that's exactly what antitrust laws were intended to prevent.
The reason why everyone has to narrowly define the market to "Apple has monopoly power in the iOS market" is because they don't actually have monopoly power in smartphones and are mad about that fact. Defining markets are a major part of antitrust cases and just because a prosecutor or regulator is willing to do it doesn't mean it will actually work in court.
This has been generally illegal in the US since 1975: https://www.law.cornell.edu/uscode/text/15/2302 (section c)
No, not really. In the EU for example, a unauthorized change to one part can legally never void the warranty to an unrelated part.
Here's IMHO a better analogy: Apple is running a mall, while also operating a chain store operating in said mall. Apple Mall allows competitors to Apple Chain Store to rent stores in the mall.
However, it turns out that for some reason, there are "Beware of Leopard" signs near the competitor stores. Also, the public area near them is never cleaned or maintained, except for signs promising cheaper products at the Apple Chain Store (and the leopard signs of course).
Would that be legal? Apple Mall is hardly a monopoly. Despite losing the location, the other stores could move. None of the agreements specifically bans this.
For some reason though, I don't think that would fly - the other stores have a reasonable expectation that after paying rent Apple won't sabotage them. Just like companies paying for the Developer License and Apple Store tax have a reasonable expectation Apple won't unduly hinder them for its own products.
This happens all the time. Integration of the radio and climate control system/navigation system. Custom wiring for the speaker system and accessory systems. Dashboard cavities which are a non-standard size.
Ultimately, being a marketmaker comes with responsibilities. If Apple wants to close iPhones and support only Apple software they could do that. But as long as Apple operates an App Store and does not allow other methods of install, this comes with the legal obligation to play fair.
Don't know where you live, but that is not true in the U. S. "It is generally accepted as" against Federal law.
Companies can say things they know aren’t true, misleading customers. They even often can make it hard for customers who know their rights to exercise those rights.
I think it would be an improvement if such actions were punished harsher and more often.
You have two system to choose from, Apple and Google.
Given that, "iOS App Store" does start feeling like a market that should be regulated as its own entity.
No you're not. The definition of dominance in the EU is primarily that you're in a position to materially affect market pricing, which I think is actually pretty easy to demonstrate in Apple's case.
Overwhelming market share isn't required, and there are several cases that have found companies to be "dominant" where they had less than 50% market share in the EU.
(As a good demonstration of this Google's own competition law settlement on Android apps pre-installation in the EU. Google do not approach anything like having a monopoly market share in the EU either, but they still settled because they were going to lose.)
Is it? App Store prices have been a race to the bottom for years, yet it's clearly in Apple’s interests to keep the prices high, both to keep their revenue from the service as high as possible and to stimulate the app economy. If they had control over the market pricing, why did the race to the bottom happen and why haven't Apple stopped it?
If the argument is that they don't care about the revenue and they actually prefer the prices as low as possible to add value to their hardware devices, then why are Apple charging 30% and not 0%?
They still may be attached to marketing and partnership opportunities I believe, though - you might not be featured in the store if you charge iOS users more than android or web users, just like they will probably not advertise a new movie or album if Amazon is allowed to sell it for a lower price.
I am not a lawyer, but that sure smells like the potential for monopolistic control.
If I want a copy of the King James Bible and 7-11 chooses not to sell that, I have to leave 7-11 and go find another store that does. Yes, that's a barrier I have to go through to get my Bible. Should the government make it 7-11's responsibility to solve that for me?
As a possibly better analogy... Let's say I run a Flea market and also direct sell some items to customers. I charge independent retailers a fee for setting up a booth in my market space and don't excise that same fee from my own booths. Then I go to open a booth in a local mall to help sell some of my directly vendored items and raise an exception all the way to city hall that the mall attempting to charge me for running a booth in their property is impeding the free flow of commerce and hurting the local economy - while I continue to charge booths in my market space for operating.
Except Apple has never made that argument to anyone. They simply added a way to pay for their subscription directly in their app rather than in the Play Store; Something Google allows.
If 7-11 doesn't sell a bible and I want to buy a bible, I go to another store that sells bibles and buy one there. It's not like my house will refuse to allow me to bring a non-7-11 product inside.
If the iOS App Store doesn't sell a particular app, then I have no alternative (aside from "buying a different house", which IMO is unreasonable), because Apple doesn't let non-App-Store apps onto iOS devices.
For an annotated bible application, you would have the option of a web-based application, which has certain trade-offs.
It's not nothing. Maybe not worth 30% but it is worth something. They run the store, buy the servers and pay for the bandwidth. Pay the engineers to develop and manage the infrastructure. Run the app certification process. Maintain the security of the platform. etc.
If they can't charge their 30% cut, they will need a different business plan. Possibly charging app developers directly for access to the app store. They are not going to just give up their 30% and do nothing.
Subscriptions should be priced more like a credit card transaction fee. They could have marginal brackets that increase slightly at scales, to account for bigger apps possibly causing more backed development work.
I'm not saying Apple isn't breaking the law, I just really wish there were more suggestions on solutions on what they should do instead. So for that, I appreciate you helping me to see it in a more nuanced way.
Apple currently has $192.8 billion cash on hand. If Apple took a smaller cut, they would simply have a few less billion dollars in the bank. Many, many individual developers and small business would have a little more money in their bank accounts. The small businesses are more likely to be actively put this money back into the economy then the idle billions in Apple's bank accounts.
This is already the case. $100/year USD to get the privilege of being on the App Store.
Actually, getting on the App Store is not even guaranteed after you pay the fee, since you still need to pass their review process.
If you want to sell your game on the Humble Store on the other hand, well then they take a 25% cut. That’s the value in being able to deliver a customer.
Apple’s fixed 30% cut is effectively saying: our brand is more important than yours in delivering customers to your App. The imprinteur of being in our App Store and bringing you a customer is worth 30% of your income. Your ability to deliver your own customers is irrelevant; we’re taking 30% either way. Unsurprisingly this sticks in the craw of some companies.
The fact that Apple’s systems make it almost impossible to effectively communicate with your own customer is an even bigger problem for a customer-focused company who’s income & branding depend on a close relationship with their customers: those companies are completely stuffed by the Apple App model & are the reason the App Store has not lead to the explosion of innovation some of us expected - it’s just not possible for a company to sustain themselves outside a very narrow set of income generation patterns.
My costs for direct distribution on Mac are ~8% and are absolutely dominated by payment processing - and that’s only because I choose to use a merchant of record instead of Stripe to save on VAT accounting costs. The rest of distribution costs are peanuts.
I agree that running a payments platform is not nothing. The issue is that there is zero competition in the space of iOS payments (very convenient for Apple that they get to make the rules and also benefit from them). That harms consumers because sellers will often charge more to account for Apple's 30% cut (and if Apple bans charging more on only their platform, the seller has to raise prices for everyone, which hurts their non-iOS user base). An alternative payments processor might charge 20% or 10% or even less. Healthy competition in that space would benefit consumers, while forcing Apple to charge a fee more in line with the actual cost of what they provide.
(There are certainly downsides; Apple has done a lot of work to ensure the security and privacy of their payments solution, and other processors may not do as good a job. And without restrictions, it's the seller who decides what processors to support, not the buyer, so the buyer doesn't get to -- for example -- choose to pay a little more to keep their information in Apple's care.)
Perhaps a good compromise would be for Apple to require that apps support Apple's in-app payment system, but allow other payment methods in addition, and also allow sellers to charge more to users who use Apple's system. If customers don't value whatever Apple is providing for the extra fee, Apple will be incentivized to charge less.
> Possibly charging app developers directly for access to the app store.
They already do this, via the yearly developer fee.
If Apple allowed the market to set the price, we would know what this activity is worth. They don't, that's the issue.
Err, Apple does charge to develop for their platform.
I wouldn't say Apple or Google do nothing. Their Argument is we provide the infrastructure and developer tools so we're going to take a slice off all your sells to keep this stuff up and running. Even the Amazon App Store takes a 30% cut.
For example, providing private APIs to Apple Music would straight fall under the Microsoft precedent, same for not allowing other apps as default programs. Apple Music would have to use the same store review policies, and Apple may have to separate divisions so AM pays the same store tax (but internally).
I think basically everyone who works on anti-trust issues would agree that this has indeed been the case. Not just with Apple, but with anti-trust law in general.
I think you're mixing up Apple Pay with in-app purchases. Apple Pay is for real-world purchases. In-app purchases are for digital goods or services. If we're talking about music streaming, we're talking about in-app purchases, not Apple Pay. Apple don't force you to use Apple Pay for anything, in fact they won't let you use Apple Pay in this situation.
I'm not a lawyer, but I'd be surprised if this defense was particularly robust anyway. It seems you'd just have to argue that there's some slight difference in the situations and that's why I'm doing something that guy shouldn't do. But either way, you're not taking away the correct message from his example.
Can you point me to the specific law they are violating? From my understanding antitrust laws really aren't that clear and it depends on the situation and their control of a market. For example, you need to prove that they have a monopoly that hurts consumers. They may have a monopoly on iPhones but not mobile phones in general. My point is you are saying they have specifically broken the law, but I think that has yet to proven and is certainly not cut and dry until it's in court.
This is a very common thing that is brought up in anti-trust law cases. That is what he is referring. It is regarding anti-trust law.
https://support.apple.com/en-us/HT204034
An Apple ID has nothing to do with Apple Pay. Apple Pay is a separate service you can turn on if you want to, or, not.
The crazy ideas people have about Apple & anti-trust mostly have to do with pretty much everyone not really understanding Apple service offerings.
Just to be clear, afaik there has not been a ruling so far that asserts this, so all you can say is that in your opinion they are in breach of anti trust, but they have not actually been found to be guilty of that yet.
No, it's not. They do not require the use of Apple Pay. It's baked into the infrastructure of the product. No one is forced to use it.
Random HN users can’t declare that anti trust laws are being violated and make it a fact. If Apple is violating the law, so is every console maker.
Let's look at a situation where Google is seeking to protect it's own cut of the action.
>“After 18 months of operating Fortnite on Android outside of the Google Play Store, we’ve come to a basic realization,” reads Epic’s statement. “Google puts software downloadable outside of Google Play at a disadvantage, through technical and business measures such as scary, repetitive security pop-ups for downloaded and updated software, restrictive manufacturer and carrier agreements and dealings, Google public relations characterizing third party software sources as malware, and new efforts such as Google Play Protect to outright block software obtained outside the Google Play store.”
https://www.theverge.com/2020/4/21/21229943/epic-games-fortn...
This behavior is much more troubling from an antitrust perspective than "Apple is being a hypocrite".
Google literally spent most of a decade preaching that the "freedom" their platform afforded to sideload software was a major competitive advantage, and then attacked a developer who was making use of that freedom to make a large profit without giving Google a cut.
Also, with Fortnite specifically, they proved the worries right immediately: https://www.forbes.com/sites/ryanwhitwam/2018/08/25/epic-gam...
Unfortunately, the $99 annual fee per developer account nullifies any possible mass-market sideloading possibilities. (Imagine what could happen if sideloading apps from source was free just highly impractical, and HEY turned their rage into a free Apple developer account management & sideloading SaaS offering.)
That's actually what the court cases are for, and I'm not sure they've actually completed? It feels like you're asserting how you feel it should work out when it hasn't completed yet.
Yikes, no. It absolutely does! The equal protection clause of the fourteenth amendment is probably the most cited and least controversial of the Big Important spots in the constitution.
It is not possible for a law or court decision to find differently for different plaintiffs or defendants under the same circumstances. Period. Full stop. This is like con law 101.
For a court to square this they'd have to cite exactly the reasoning that makes it OK in one case but not the other, in a way that is much more involved than "just because", as you seem to think.
There's your different circumstances.
> It is not possible for a law or court decision to find differently for different plaintiffs or defendants under the same circumstances
The law does not require that Google and Apple run their online stores the same way, or that Apple interact with Google's store the same way they choose to run their own store.
In fact it's arguable that a free marketplace encourages and depends on different companies taking different approaches to meet customer demands.