Apple’s poison-pill approach to EU regulation might be the right thing to do
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What if Apple is right about the App Store and its control of it?
I’ve never wanted an open App Store. Side-loading apps onto my best iPhone struck me as the perfect way to infect or ruin them. Granted, I was not an iPhone jailbreak kind of guy. I’ve also never felt constrained by that single App Store or even that I’m potentially being overcharged because Apple used to charge developers 30% for every transaction (it’s since come down a bit in some situations) – a cost that might’ve been passed along to me. Perhaps this is because the majority of apps I use are free and those I’ve paid for, like Procreate, and Star Walk 2 charged me once and then let me freely download updates.
My point is, that I’ve never been unhappy with Apple’s approach to apps, access, and app commerce. Based on the actions of the EU, lawsuits, and even potential US laws seeking to alter Apple’s policies, perhaps I’m in the minority.
I don’t think so.
The EU, which has become the world’s digital watchdog, is so far the only entity that has successfully forced Apple to change. Naturally, Apple acceded to the EU’s App Store and app policy demands in the most Apple way possible. It’s inserted multiple poison pills into the agreement which, as some developers have noted, makes operating outside Apple’s App Store untenable.
No one should be surprised Apple took this route, and I don’t think it’s all about money.
When Apple developed the App Store 16 years ago, I think it saw an opportunity to avoid the pain and suffering associated with allowing anyone to download any app or utility from any source. Windows spent years grappling with viruses that simply had to wait for you to log onto the Internet before they downloaded and infected your system. While Windows 11 is now a more secure system, allowing apps from third-party and not necessarily trusted app sources will always be a potential avenue for infection. The only way to cut off that risk vector is through control.
The Apple App Store is nothing but control from development, to approval, to access, download, and future transactions. It’s a closed loop that ensures, though not perfectly, app quality, safety, and a baseline of privacy. It means your transactions go through trusted financial sources. The App Store is a safe space.
What it’s not, though, is a competitive one.
A milestone of sorts
What the EU will accomplish in March with the adoption of its Digital Markets Act (DMA) is nothing short of remarkable, especially when you realize how long people have been trying to make Apple change.
Back in 2011 Robert Pepper and other Apple customers sued Apple for antitrust over its vice-like control of the App Store. Pepper contended that the App Store was a monopoly and that Apple’s commission was making apps more expensive than they would be otherwise. The case made it to the US Supreme Court which decided in a 5-4 opinion that app customers were buying apps from Apple instead of direct from developers and could therefore sue Apple directly for antitrust. That decision sent the case back down to lower courts, which means that, to this day, there is no resolution.
The US Government, which is like the tortoise to the EU’s hare, has also tried coming up with laws that might curtail or alter Apple’s App Store practices. The one that might have the greatest impact is The Open App Markets Act which might force Apple to alter its commission policies and maybe address third-party app stores in some fashion. However, that, and other laws like it, are sitting somewhere in committee and have had no movement on them for almost two years.
In the meantime, Apple has shown the world how it will deal with the EU’s arm-twisting, by basically growing another set of arms. There are new fees, new checks and balances, and myriad rules that, when iOS 17.4 arrives, will follow the letter of the EU’s regulations without actually encouraging anyone to use them.
After sitting with our legal team to parse through the fine print of Apple’s DMA announcement (that took a while), which is, at best vague and misleading, I wanted to share my thoughts. While Apple has behaved badly for years, what they did yesterday represents a new low, even…January 26, 2024
Don’t complicate things
I do wonder, though, if any average app consumer cares about this. I mean, I get that Spotify (see above), Epic Games, and others, especially those who engage in significant in-app purchases (buying outfits in Fortnite, for example) care about this. What Apple allows them to do within the App Store impacts their bottom line. Being able to operate on the iPhone while outside Apple’s draconian rule and fee structure could translate into millions more in revenues.
Consumers, though, want consistency and ease of use. Do iPhone owners want to install another app store and search twice (or more) for the app they want? The uncertainty they’ll encounter in these new app marketplaces could give them pause. Can they still trust these apps? That hasn’t been much of a question on the App Store. Do app consumers think they’re paying too much for apps, or is it really that developers want more of the money they believe they’re owed?
These changes and ones I bet developers want in the US as well may simply be passing along developer issues to consumers.
Apple is not perfect and I know that its bottom line plays a significant role in this decision here but I think the larger issue for Apple is the quality, consistency, and safety of its most important platform. Naturally, it’s going to do everything it can to protect that.
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