It feels like it goes back to Android vs Apple approach to their ecosystem.
To me, this is the crux of modern antitrust, and the EU absolutely got it correct at a high level.
In simplest form -- doing certain things as an almost-monopoly and/or extremely large business should be illegal, while doing them as a smaller company should not be.
The scale of global businesses, in low-competition industries, allows them to engineer moats that are deeply injurious to fair competition, to their own profit and the detriment of everyone else.
> you buy it knowing that.
I think it's debatable whether the average iPhone customer buys it, knowing it allows Apple to heavily tax all AppStore developers.
The “it just works” should be allowed to extend into the entire ecosystem.
At the moment they're double dipping. They're saying they have to be the only app store for security and UX AND then charging high fees. If they're really providing a service for end users, they shouldn't be taking such a large cut from developers.
Bingo. If they're making an argument that they have to retain so much control because it's good for the users, then why are their margins so big?
I'm not saying companies shouldn't be able to run successful, highly-profitable businesses.
I'm saying they shouldn't be able to (a) have significant market share, (b) have significant size / market cap, (c) have high margins, AND (d) claim "but we're so efficient for our users!" as a defense against anti-trust.
One of those things is bullshit, and 3 out of 4 are facts...
Note: I'm not defending Apple. But the higher dev fees do serve a purpose other than revenue.
If Apple is really concerned about keeping out the riff raff they could raise the annual flat developer fees.
But we all know that's not what they're actually concerned about - the app store is estimated to have 80% margins right now. They're just charging what the market will bear, and the market will bear quite a lot right now as they're part of a duopoly on smartphones.
Well, that's another conversation then isn't it? If that's the case, then Apple and Google (Play) should be named then, yes?
It doesn't keep malware from getting in. If it's hurting people by limiting their choices and it isn't keeping people safe then what good is it?
I'd suspect most users aren't going to venture outside the garden.
To the extent that they care, they seem satisfied by being able to switch to other iOS browsers that under the hood use the WebKit engine, but give them the ecosystem-integration with their desktop browser that they want. Shared Chrome bookmarks and tabs matter 1000x more to a random user than details of browser engines.
Small, minor, annoying issues as a customer that make me think slightly less of Apple while continuing to be in awe of their hardware.
You can buy in iOS Safari and not have to open your laptop.
I'm sure people will pay a bit more to use Apple pay and not get kicked out to a browser and possibly fiddle with re-logging in and re-typing in their payment info to a sketchy site.
Very few will pay 30% more though, because even the people that love Apple pay will be forced to acknowledge it's an obvious ripoff, in no way commensurate to the value provided.
However, I was just making a factual statement that anyone can pay using their browser on iPhone or iPad on the vendor’s website, just the same as they can using their laptop.
My M1 MacBook Pro is probably the second worst computer I've ever bought, and might have been the most expensive I've ever purchased.
I bought another Air this year (M2), and again, it's a far better value.
I think if you explained it to the average iPhone customer you might be shocked they side with Apple. The concept of a platform where for free you can take advantage of it and just make 100% of the revenue without cutting in the owner of the platform is completely alien to how things work in what they consider the real world.
I can't just walk into Walmart and set up a stand and make money, if I want to sell in Walmart I have to work with them and give them a similar sized cut. If I even set my stall up on the street I have to pay for permits, certification, suppliers.
Not saying I agree with the App Store tax because I actually don't but I think the way they set it up as a "Store" was very clever in making it seem completely normal when it's completely abnormal compared to all personal computing up to that point, which maybe was an anomaly? Hope not.
And the only options are to take the deal -- modifiable at any time by the platform owner -- or burn down your digital life and start over on the only other practical competitor.
Would this mean that anyone must be able to load any software into any platform that runs on software, or are we just picking on apple because they are popular. And got popular while doing all these things.. if people didn't want it they wouldn't have bought into it in the first place.
"Popularity" is a precondition to running afoul of antitrust law, yes..
Well, yes, antitrust law specifically, by design, focusses more on large market players, not small ones (there are some aspects still relevant to any participant, though.)
That's kind of central to the whole problem it is intended to solve.
Apple sells something like 70% of phones in the USA due to network effects that might not be apparent to users in other countries - social shaming for not using iMessage. The European equivalent is WhatsApp, which the EU is forcing to open up.
Homebrew is a thing, and you should be able to use whatever software you want on a device that you paid for. I have no doubt that there are people who own an iphone and wish they could have a different browser, or wish they could use a game streaming app.
I'm also fine with Nintendo selling games via their store and physically, and taking whatever cut they can bear of it.
(80% of App Store revenue is "games" anyway, so it's a much closer analogy than people might expect. They may end up opening everything except games and only cost them 20% of revenue.)
Meanwhile you can get full advantage of the iPhone ecosystem "for $100/yr" which is nearly free, including App Store distribution, etc. If anything, Apple should be charged with dumping in those cases.
I don't use my Playstation or Switch for banking, ordering taxis, my actual job, so there is a bit of a difference.
Although consoles are another good example of how a locked down platform can make an experience hassle free and how that becomes a selling point.
> I can't just walk into Walmart and set up a stand and make money, if I want to sell in Walmart I have to work with them and give them a similar sized cut.
Apple's App Store might be Walmart, but the phone I bought is not Walmart.
Regular people understand the idea of "I bought a thing, and now the greedy company won't let me do what I want with it unless I buy their overpriced add-on", see printers.
Apple is no more entitled to a cut of everything I put on my iPhone anymore than Walmart is entitled to a cut of everything I put on my table simply because they made the table.
I don't know if that's inherently correct in people's eyes. For a counterexample, note that video game consoles are very popular, and I don't see any widespread opposition to the idea that e.g. Nintendo is controlling what you can play on a Switch.
I assert that I have rights under the first sale doctrine which let me do whatever I want with the things I own. Apple has no more of a right to dictate what I put on my device than Walmart has a right to dictate when I put on my table simply because they sold it to me.
Unfortunately, it's a tricky question, because it's more akin to compelling speech when the content is served by another party at a future time.
If I get a device that uses cloud functionality... is whoever I sell that device to entitled to that functionality?
But those are more "advanced" questions. We still haven't even established the fact that I should indeed own the thing I purchased (see music or movies or anything). So we have a while to go before we get to questions of transference of services.
It's gonna be the first thing Facebook does, and maybe that's fine but it's going to reduce consumer choice. You won't be able to have the Facebook but with the tracking restrictions anymore because it's bad for their bottom line. I don't really know if there's a good answer for how to strike this balance but it seems drastic that people want it to be illegal to offer a platform where all participants have to play by the platform's rules.
(My money is on "I already have this computer for work" being the single biggest factor, with "the graphics can be better on the PC" being #2.)
Now PC games often lose backwards compatibility when upgrading OS versions, but patches, compatibility modes, and even VMs are realistic options and ones that people will use.
Perhaps the "best" counter argument is the Mac App Store and Steam - both of which take a big cut, both of which can be "easily" bypassed for many apps, and both of which customers don't really seem to care about from a monetary point of view.
People care much more about what is or is not permitted, not where the money goes.
This isn't true. You cannot bypass the stream 30% fee from the consumer side.
Because of practices that stream does, which are arguably anti-competitive, I cannot buy the same exact game, from the game developer's website, and receive a 30% discount.
If such discounts were possible, and it was clearly advertised that I could just get the game for cheaper from a different location, customers would absolutely take that option almost always.
See: https://partner.steamgames.com/doc/features/keys
(At the very least, if they're trying to do a most-favored-nation rule, they're not listing it in their policies and are enforcing it through back-channels.)
I think a lot of developers will be surprised how many customers actually side with the convenience of the platform over the actual person creating the value.
The moment Apple is forced to "open up to the competition", all Meta apps are going to magically move to the Meta Store, where they'll likely be able to shove all sorts of tracking garbage down my throat.
Same for Alphabet, same for Samsung, same for Microsoft.
The experience will turn into a hopeless struggle against EULAs and consents, unless one refuses to install any third-party spyware and do the digital equivalent of moving into a forest cabin. The oddball, while everyone else sheepishly complies.
Evenyone loves to hate Apple, everyone forgets that the first commercial music store to sell unencrypted and hugh fidelity AAC files was Apple's. The rest was "squirting" tunes on Zune or inflicting Realmedia on their paying customers.
Nope.
So if you're unhappy with their behaviour, that should be made illegal.
Secondly. Apple's protection against tracking comes from the OS level. The OS stops them from accessing my contacts and my GPS location, not apple's 30% tax.
> sell unencrypted and hugh fidelity AAC files was Apple's.
So what. How unencrypted are those audio files now? They've since moved on to FairPlay.
Both are problems, both need solving.
removing/decreasing apples ability to police apps before regulation means you are opening users to hostile apps.
adding regulation and setting standards for apps and data tracking and then removing/limiting apples ability to police apps does not.
these are not the same thing?
Cause there's plenty of examples of Apple's store filled with spam and outright fraudulent phishing apps. There's a big difference between the image Apple advertises for the App Store and what it's actually like.
Ever heard of the expression “closing the barn door after the horse has bolted”?
But I chose iPhone (and I think many other customers do) specifically for it being a walled garden. Now some other corporations like Epic, who want to have a cake and eat it too, are going to ruin one of the platform's key selling points.
And if your workflow did require an obscure app, who is Apple to decided that you cannot install it on your own phone?
> But I chose iPhone (and I think many other customers do) specifically for it being a walled garden.
People like this walled garden since apple promises that it's safe and they deal with all of the problems for you. But time and time again we see that their App Store features outright scams and mountains of knockoff garbage apps.
People buy into the marketing of the walled garden, not the reality of it.
I get the "safety" argument, but it's also about the user experience. What if now Microsoft makes me install Microsoft store to use M365 apps, Amazon makes me install whatever store to use their products, etc? What do I win here as a consumer?
I buy iPhone specifically for what it is. I get that some people don't like walled garden approach, so they have Android at their service. Apple is not a monopoly.
What is the point of buying a phone knowing what you are getting, and then complaining about something you knew full well it doesn't have?
The lawsuits is literally about this.
> What is the point of buying a phone knowing what you are getting, and then complaining about something you knew full well it doesn't have?
Because the thing the company is offering is a behaviour that overall is not one we as a society want (Apple being allowed to dictate what businesses will and will not succeed by either locking them out of 1/2 of the major mobile OS, or by taking a 30% tax from their revenue and then competing against them).
All app stores (and most real-world markets and stores) do that. This is a business model. And as a store owner who invested billions of dollars to build it, and the entire platform and infrastructure around it, you are in your full right to decide the rules on what is allowed there and what is not, and how much to charge. If your rules are unfair or disadvantageous to the competition, sellers and customers simply will not come. But as we can see, App Store is the most successful app marketplace on the planet, both for developers and consumers.
Just as Google is the most successful search engine on the planet for advertisers, website owners and consumers, regardless of the fact that Google can fully dictate what appears in its search results or what advertisers can put in their ads, and how much Google charges for it.
So I don't quite understand what exactly the argument here.
This this different argument than allowing sideloading apps (that one is quite fair, I'll admit).
Even with the current side loading changes, which are EU only, they still take a major cut and still dictate who can and cannot run a store.
So I agree with you that the App Store, like other stores have the right to dictate what they do and do not sell. They do not, however, have the right to say that they're the only store allowed, or that any new store must pay them money.
Also, I'd be hesitant of using Google's behaviour, certainly its current behaviour or current market position, as justification for what is okay for others to do.
I was tackling why I don't think that argument holds water with the average person.
"now the greedy company won't let me do what I want with it unless I buy their overpriced add-on"
With printers this is very tangible to the customer, with the App Store what you're describing here isn't as tangible because nothing on the App Store is actually expensive, it's either free or relatively cheap and it's more a case that the user pays little or nothing, Apple gets a cut for doing close to nothing and the dev gets screwed, printers is more the customer gets screwed.
The App Store was not a business innovation by Apple to set expectations, it's how all cell phone software that preceded it worked. Apple's change was to lower the fees and open up access to everyone.
The iPhone is a computer, but unlike past computers it introduced a walled-garden App Store.
Also, software on phones before the iPhone was also gate-kept by carriers. Apple was not maintaining the status quo. They were changing it for their benefit.
Everyone seems to have forgotten that ring tones cost an arm and a leg, that "apps" were awful (I know I designed one)... You had to pay to get your app on a phone even if it was free.
It's both of course, but I think they price based on the value rather than on the cost. (ie: percentage of sales, not per shelfspace)
If you told them "you have to pay 30% to the person who invented books every time you write something" they'd scream censorship and call for an armed revolution.
People generally know this, and they generally don't care.
But you can't do that with a mobile app because only Android users can use it, while anyone with an iPhone can't use the app unless you submit to Apple's rules.
Who is arguing it should be free? Why create a false dichotomy where it's either the status quo (30%) or nothing (0%)?
I'm sure most people would accept a reasonable fee. It's hard to put an exact number on this because it would have emerged organically if Apple actually allowed fair competition in app stores. In the absence of fair competition, the best comparison I can think of is credit card processing which is about 3%
And don't forget that Apple receives enormous benefit from these apps being in their store. If not, consider what would have happened had Apple not allowed any apps in their store. Hint: Android would have eaten the world.
Why is this number so bad? Steam: 30% https://medium.com/@koneteo.stories/how-much-money-does-stea...
>> In the absence of fair competition, the best comparison I can think of is credit card processing which is about 3%
Sure 3%, + a flat fee of .02 to .10 per transaction. that flat portion is going to be HUGE if your charing under $5 for something. You get none of that money back for chargebacks, or refunds. And if your charge backs are high your going to pay more as a % or get dropped so your going to have to hire CS people to answer emails or phones, and say nice things to angry people. You're going to pay someone to pay cc compaines to give money back.
Meanwhile you're small, you have no clue if the person on the other end is a refund scammer. Apple (and Steam) have this habit of telling people to "fuck off" if they refund scam. They have the weight with CC processors to do that. you will not. They also have customer trust, because if your product (game/app) is shitty they give customers money back (See Epic 1/2 billion settlement for being bad about this, and kids).
Is 30 percent high. It is. Is it unreasonable... meh maybe not?
The thing with Steam that makes it different to me is the access control and gatekeeping. For example Steam hardware is so open that you can immediately install a different OS on it without even booting it. Steam hardware will happily run any third-party app store you want, including Epic Games their main rival. Steam also (AFAIK) don't do exclusivity BS like the consoles often do. So when it comes to Steam they are clearly competing fairly and evenly in a free market. If Apple were the same (iPhone could run 3rd party app stores, or you could install Android on you Apple hardware) I would have absolutely no problem with 30%. Hell I wouldn't even have a problem with 90%, because if they weren't providing that much value then a competitor would come in and take it from them.
The number of people buying iPhones to run even a slick version of Android would probably be quite small.
I can buy android devices that are as good as the iPhone or better in their own way and have all those features (side loading other app stores). Is that not the free market in action?
Most apps are free and are things like 2fa, chat apps, kindle, etc.
Would I be sad if the entire App Store shut down? Probably. Would it be enough to move me to Android? Uncertain, probably not.
Most App developers aren’t even paying 30%, they’re paying the lower 15%.
Amazon seems to inexplicably get away with a lot of anti-competitive behavior. I don't know why.
I'm not, I'm pointing out for the first 50 years of computing it literally was free.
In my view, my phone is MY DEVICE. It is most definitely not "Google/Apple's platform"!
Google is merely manufacturing my phone, and I intend Google to have no rights or control whatsoever regarding my phone, and merely have the obligation (not right, obligation) to manufacture it correctly and provide open-source software for it that works correctly and properly provides Android interfaces (obviously, I don't use an Apple phone since Apple doesn't offer that, while Google does since they provide devices with unlocked bootloaders that run open-source OSes).
It only runs Android because Google with Android happened to win the adoption lottery and it would run PodunkOS by ACME if PodunkOS by ACME had been the one that managed to gain critical mass.
Again it is absolutely not even remotely close to "Google/Apple's platform", and I have no intention for Google to interfere in my use of it and certainly not interfere in any relations I might have with people providing software for my phone like taking a cut of the transaction or deciding how that software should behave.
I'm talking about the normal persons perception of the situation, not what is right in terms of how a technically savvy person would look at the situation.
Which includes "go to any website and run any app I can download from it, regardless of whether it's illegal or against any rules or against the interests of the phone maker" and "change any aspect of functionality that I don't like (e.g. apps being able to show ads) and that I can find out on the web how to change".
It doesn't include "Google or Apple make rules about what I can do with my phone that I can't override".
I couldn’t care less about alternative App Stores. I don’t want them, I don’t need them.
I am very happy the way it is.
Also, I'm not sure why you favor the App Store. It's not safe. Apple is unable to keep malicious apps off of it, and there is no warranty if you lose money due to a malicious app. People think there is some implied safety in the App Store. There is no such thing.
Safety comes from not giving permissions to apps which don't need them.
> I’m a heavy and loyal Apple user AND an app developer.
Do you really think you're representative of the average iphone customer? A heavy, loyal user AND an app developer? I don't think so. And even if you were, your personal situation isn't a rebuttal
However, let’s not assume what the majority of iPhone user thinks. To that end, I thought it is interesting to add my very personal perspective.
Anyone arguing for Apple's side is akin to saying we should all be serfs for the King, because he takes care of us well and protects his kingdom.
It's not merely the integration which is a problem, it's how that + network effects gives apple undue market power to dictate terms to its users, devs, etc.
Being a middleman between users and devs, say, takes on a different character when you're a 2-3T biz at the heart of the economy.
They should be.
> So if there are 2 competitors and one drops out, then it's hardcore illegal, but otherwise it's a-okay?
No, it is absolutely not. There is nothing illegal about having a monopoly in the US. The government even explicitly and purposefully creates and grants monopolies pretty often. Natural monopolies are not illegal. Abusing your government-granted or natural monopoly is the illegal behavior.
I'm curious to see how they even construe a duopoly as a monopoly under current law, because this will have some profound impacts to the entire economy if they succeed.
Typing this on one of many Apple devices I own. I don't hate Apple. But, you're right, comments like yours make this a frustrating exercise indeed.
> No, it is absolutely not. There is nothing illegal about having a monopoly in the US.
Yes yes, it may technically not be illegal per se, but then again, it's a problem. I am not a lawyer and I don't care about the details of the law. That's for other people. I am looking at this from a perspective of a consumer who feels actively harmed by what the tech industry has become. And as a member of society who cares for other people. If one company accrues that much by making it hard for others to compete, then they will rightfully be forced to give back if they don't do it out of their own free will.
You know that I have a point.
>then it's hardcore illegal
You aren't a lawyer, you don't care about the laws as written, yet make false statements about what the law says according to how you feel anyways then back pedal when called out that it's not actually illegal. I think you've said everything you can.
> Monopoly law needs to be reinterpreted in light of network effects.
This is the context of this discussion. If you think dragging me into details of the current law will distract me, sorry, no it won't. This thread is not about that.
> yet make false statements about what the law says
Now you are making false statements. I didn't say that the law says that. What's more, you dragged that piece of a sentence out of its context to make it appear as if it wasn't part of a question. But it was. So it's not a statement. It's a question. Is it a false question, maybe? Sounds a bit laughable to me.
Well, Microsoft eventually got all but forced to port Office and, for a time, Internet Explorer to macOS to evade getting sanctioned by the EU.
In a similar vein, if the market is not healthy any more, the duopolists may be forced by regulatory authorities to make life easier for potential startup competitors: open up file format specifications, port popular applications with network effects (iMessage, Facetime, Find My in the case of Apple) to other platforms or open up specifications to allow others access/federation.
I have seen some people assert this a few times in the last couple of weeks and I don’t know where this comes from. This is not at all what happened.
This was part of an agreement between Apple and Microsoft in 1997, long before any EU decision. Microsoft bought some Apple shares and agreed to support office on MacOS for a few years, and Apple made IE their default browser.
One can argue whether they did it to improve the optics in their (American) antitrust lawsuit (and there are several details that do not make sense if it were the case), but it certainly was not forced on them by any court.
So sure, duopoly of real competitors is one thing, but that’s rarely the case once players realize they can set prices and divide the spoils.
But then, the problem is that you have a cartel, not a duopoly. That’s the thing: you can only punish companies for their actions. A duopoly is a fact, in itself it does not imply any particular behaviour from either company. If there is collusion, then it’s anti-competitive behaviour, abuse of their dominant positions in the market, etc. Things that are already illegal and should be enforced.
The reason there is only 1 broadband ISP is because people are not willing to pay sufficiently more for fiber to offset the costs to install fiber to the home, especially in places with buried utilities.
Therefore, the existing coaxial connection is the only economically viable option.
Also, it rarely makes sense for 1 home to have multiple physical infrastructure connections, so they lend themselves to natural monopolies. If a house has access to fiber, it makes no sense to spend resources to run another fiber to the house.
Which is also why ISPs should be utilities, but that is not comparable to personal devices.
Which might be the case if, through taxes, we hadn't collectively paid for a lot of that in the way of subsidies and grants to those ISPs to do exactly that, subsidies and grants which resulted in, generally, more dividends, bonuses and stock buybacks than they did miles of fiber being laid.
Herfindahl-Hirschman Index
The term “HHI” means the Herfindahl–Hirschman Index, a commonly accepted measure of market concentration. The HHI is calculated by squaring the market share of each firm competing in the market and then summing the resulting numbers. For example, for a market consisting of four firms with shares of 30, 30, 20, and 20 percent, the HHI is 2,600 (302 + 302 + 202 + 202 = 2,600).
The HHI takes into account the relative size distribution of the firms in a market. It approaches zero when a market is occupied by a large number of firms of relatively equal size and reaches its maximum of 10,000 points when a market is controlled by a single firm. The HHI increases both as the number of firms in the market decreases and as the disparity in size between those firms increases.
The agencies generally consider markets in which the HHI is between 1,000 and 1,800 points to be moderately concentrated, and consider markets in which the HHI is in excess of 1,800 points to be highly concentrated. See U.S. Department of Justice & FTC, Merger Guidelines § 2.1 (2023). Transactions that increase the HHI by more than 100 points in highly concentrated markets are presumed likely to enhance market power under the Horizontal Merger Guidelines issued by the Department of Justice and the Federal Trade Commission. See id.
How much of this is because of evil monopoly forces, and how much of it is because users prefer iOS and Android? It's not like the mobile device market snapped into existence overnight, both Android and iOS beat out Blackberry and managed to fend off Microsoft.
Turns out the phone cartel is the phone company cartel in a trench coat.
I...don't think that's sufficiently self-evident to stand on its own.
Fundamentally, it's hard to have a world with more than a very small number of operating systems for the major form factors of device—unless those operating systems are mandated to interoperate in significant ways.
Creating a new operating system for phones also requires some things that are not at all easy to get:
1) You need hardware. This means that either you're creating an OS for an existing hardware platform (in this case, Android or iOS) or you're building your own phones. Given the legal frameworks that existed over the past decade and a half (as distinct from the particular dominance of one platform or another), that basically means you're building your own phones. Some people have tried to do that, but it adds hugely to the up-front cost of getting an OS going.
2) You need to get a critical mass of people using it. Until and unless this happens, what you've created has to live or die based on the apps and services that you build for the phone. No one's going to dedicate their own time, effort, and money to creating software for a phone that only 10,000 people have ever bought.
Now, I can see a pretty strong argument for a new legal framework that would make #1 much easier—specifically, requiring all hardware platforms (possible "all hardware platforms over X sales") to provide a fully-open specification for third-party OS makers to use (with appropriate clauses about dogfooding the open API to prevent the hardware maker from just using a bunch of private APIs to preference their OS). This would allow people to create their own OS for the iPhone without Apple's interference.
But that's not what we've had since 2007, so your bold but unsupported statement that the lack of third choices for mobile OSes in and of itself proves that Apple is a monopoly (or at least that Apple/Google together make up an abusive duopoly) does not hold up to scrutiny.
I don't see how Apple and Android's competitors failing is any sort of fact about Apple or Google, at all.
* tin foil hat on *
That may be by design. If the outcome of this is "no monopoly", then it's a win for Apple.
These charges also undercut the next administration's leverage to negotiate with Apple, now that the threat of anti-trust charges are taken off the table.
I am pretty bullish on Apple right now and could easily see a future where Windows isn't even used for gaming anymore. When Macbook Airs start to be capable of running high end games what is the point of getting a huge Desktop running Windows jammed with bloatware from 100 different companies?