Tag: antitrust

Apple announces changes to iOS, Safari, and the App Store in the European Union – Apple

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From The Apple Newsroom:

Apple today announced changes to iOS, Safari, and the App Store impacting developers’ apps in the European Union (EU) to comply with the Digital Markets Act (DMA). The changes include more than 600 new APIs, expanded app analytics, functionality for alternative browser engines, and options for processing app payments and distributing iOS apps. Across every change, Apple is introducing new safeguards that reduce — but don’t eliminate — new risks the DMA poses to EU users. With these steps, Apple will continue to deliver the best, most secure experience possible for EU users.

I love how Apple frames these changes as introducing risks to users. A few other items of note:

Why the bad iPhone web app experience keeps coming up in Epic v. Apple

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From Dieter Bohn at The Verge:

Something keeps coming up at the Epic v. Apple trial as a potential alternative for getting Fortnite on the iPhone: web apps. It’s an intriguing idea, as web apps are able to do surprisingly complex things: just look at a Chromebook or even game streaming services on the iPhone. But potential is far from reality, because the ability for web apps to look, feel, and perform as well as native apps on iOS is severely limited.

Another good breakdown of the issues Apple is trying to have both ways. They’re keeping a tight grip on their App Store and saying that Web Apps are a path forward if you don’t like it, but then they’re making it difficult for folks to actually ship web apps that are truly compelling. In the “best case” scenario for customers and developers, I think a ruling that includes forces Apple to change some of their rules to allow 3rd party browsers could change things greatly. Add to that some of the suggestions I made a while back, and I think a lot of this would go away. A “worst case” scenario is a confusing hellscape of competing app stores, browser ballots and even possibly no default apps on first load. Lets hope cooler heads prevail.

Apple’s App Store Issues

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If you’ve been under a technology rock, you might have missed the kerfuffle Apple’s been in for the past few months. We’ve seen a few high-profile dust ups over Apple’s control of what goes on the App Store (HEY, Microsoft’s xCloud, Fortnite). The arguments vary for each of these but the common issue is that Apple seeks to control how developers build their apps, wants to take a cut of all revenue coming into their apps regardless of how much value the store provides, and restrict many types of apps based on what tend to be arbitrary standards.

There’s a good read in Stratechery about this same issue but from an economic / antitrust angle that I recommend you check out for more detail.

If Apple isn’t careful, they’re going to wade into antitrust regulation that could potentially strip the company of a lot of control over their store. If they get ahead of it, they can set the terms. Here’s what I wish they’d do:

Reduce App Store Commission

Reduce the cut for iOS purchases. You would see fewer complaints about other problems with the App Store if the cut Apple took was closer to 10-15%. I doubt that will happen without government intervention, but one can dream.

Sideload apps

Apple should allow users to sideload apps like on a Mac. Here’s what a user sees in the security panel on MacOS:

Apple could require all apps to be signed to maintain a level of “break in case of emergency” control. Even if iOS required users to plug into a computer and load an .apk rather than a more seamless TestFlight-like experience, that’d solve for apps that are categorically not allowed (xCloud), apps that want to do their own thing payment wise (Fortnite), and fringe jailbreak-like apps.

Clearer Rules

Next up, Apple should revamp their rules to reflect the world of 2020, not 2007. Clearer rules for developers with an escape hatch to side load if push comes to shove would make most folks happy. As it currently stands, many developers are fearful of investing time and money into app development that may be rejected on a technicality.

In-app Links

Apple should allow apps like Netflix, Kindle and Fortnite to send users to an in-app webview that would allow you to purchase in-app content or sign up for the service. Apple would not get a cut of these purchases. Let the better experience and safety of Apple’s IAP compete to win out over a popover web view.

Will Any of This Happen?

I don’t anticipate they’ll do any of these unfortunately, especially the commission cut. I do worry that Apple is stifling innovation on their platform and if they do it enough times you could see a situation where entire categories of users start to choose Android over iOS because there are important things they just can’t do on iOS. Most of the things Apple has gotten into hot water for lately are not policies that put customers first. Instead, they are things that solidify Apple’s ability to make money, protect their interests or keep things “simple”. Given the push to present the iPad Pro as a computer, their limitations on the types of things that are allowed on iOS make me reconsider how much I’d like to invest in iPads or iPhones.

Even Apple’s privacy push could have an unintended outcome. A lot of apps rely on advertising to make their money and if Apple makes it prohibitively difficult for developers to monetize their apps, they may choose to slow or stop development on the platform. It is a difficult tightrope to walk but I trust that Apple can do it. Whether they will is another story.

Apple’s App Store polices are bad, but its interpretation and enforcement is worse

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From The Verge:

The real issue is Apple’s power, of which this whole Kafkaesque series of changing rules is a symptom. We all know the score here: Apple needs to protect the 30 percent cut it takes, and if it allows too many apps to circumvent that cut then some sort of dam may break. From Apple’s perspective, it’s not so much the money for its services bottom line but that if everybody used a different payment system, the experience on the iPhone would genuinely be degraded, if not fragmented. (The money doesn’t hurt, though.)

[…]

There’s a cognitive dissonance to calling Apple a monopolist. After all, people are free to buy an Android phone and well over 80 percent of smartphone buyers on the planet do just that. Apple’s marketshare in the US is significantly higher than it is in the rest of the world, but it’s not that high.

Ben Thompson at Stratechery has been writing about this for years — he recently pulled his 2018 article on this very issue out from behind the paywall. In it, he writes that “I don’t believe the relevant market is smartphones, but rather digital goods and services.” Indeed.

The monopoly Apple has is a monopoly over the iPhone itself, not over smartphones. And that is a very strange way to think about a monopoly. Shouldn’t Apple be free to make whatever rules it wants on the devices it sells? Is it unfair for Apple to demand a cut of all digital commerce on its platforms?

If you aren’t keeping up, HEY is a new email service that has popped up and costs $99/year. They built native apps for all of the major platforms (although wrapping their website in an electron app is hardly a native app, but I digress) with Apple’s iOS being one of those platforms. They did not include a way for users to buy a subscription to their service via in app purchases, instead sending users to the HEY.com site to sign up. Apple rejected the app, saying that they should allow users to buy a subscription in the app. Now customers who signed up for the service can’t use the mobile app and the developers have said they won’t give Apple 30% of their revenue to simply process payment.

This whole thing is such a mess. Incoherent rules and inconsistent enforcement by Apple have created a situation that is bad for consumers and developers.  Ultimately, I think a situation closer to what Google allows (any 3rd party can use their own payment system for anything other than IAP and in all games) as well as allowing for easier side loading on iOS would keep the regulators away and allow for more innovation. Would their services revenue numbers take a hit? Surely. But given most of the big players already have found workarounds, I don’t think it’d be as bad as you’d think.  I also expect more from Apple than essentially rent-seeking.

Additionally, if the argument from Apple is at least partially around providing consistency and clarity for customers, having these Easter egg hunt-style messages in apps like Netflix, Kindle and others (saying things like “you can’t buy content here. Sorry!” due to Apple’s rules around linking to external signups) makes things worse, not better. With WWDC & EU antitrust discussions looming, I’m sure this will be top of mind for the folks in Cupertino over the next few weeks. I hope Apple does the right thing and at a minimum updates their rules to be more clear. If they really want to support their developer community they need to do way more than that, though.