Sunday, 15 January 2017

The Apple App Store Monopoly


A US Appeals court has given iPhone customers leave to sue over the App Store monopoly, potentially opening a path to third party App Stores on iOS. In the same week that Apple announced 60% growth in App Store revenue and confirmed $20bn was paid to developers in 2016, its a bad time for this news to break. The Appeals Court overturned an earlier ruling and reopens the question of Apple's app sales policy.

Apple's argument has always been that customers don't deal with Apple, they deal with individual developers. However the Appeals Court based its decision on customers paying Apple for the apps. It can hardly deny any interest in the transaction with this being the case. Even Apple's secondary argument that developers paid for space in the App Store (via the premium it pays to Apple on each sale) was rendered moot once Apple began demanding payment for subscriptions, as well as dictating how much apps and content could be sold for outside of the App Store.

Apple fans argue that Apple cannot possibly hold a monopoly when Android owns the larger share of the market. This argument is nonsense. The App Store is the only way (short of jail breaking) iOS customers can get apps for their devices. And publishers can only access those customers by following Apple's very specific rules. With upwards of one billion device owners out there unable to go anywhere else for apps that sounds like a monopoly to me.

As a minimum Apple should be forced to allow third-party stores to be installed onto iOS devices. If the precedent of Windows and Internet Explorer is followed, then it should be forced to pre-install third-party stores too.

What I find perplexing is the EU, which makes so much noise about monopolies has completely failed to even investigate the legitimacy of the iOS / App Store lock-in. The legal system being what it is in the US, this has a long way to go before any kind of definitive decision is made.

Some pressure from the EU could move things on an awful lot quicker.

I don't see a defeat on this item as particularly affecting Apple. Customers will likely choose to use the App Store even if other options are available. Android customers have certainly stuck with the Play Store. However it's that freedom of choice which iOS owners are currently being denied.

Whether they want it or not is a different matter entirely.

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