back to article Apple heading for Supreme Court showdown over iOS App Store 'monopoly' gripe

Apple may soon find itself at the center of a monopoly probe before the United States Supreme Court, based on opening arguments heard on Monday. Right now, the Supremes are weighing up whether they will hear an appeal in the case of Pepper v. Apple, an antitrust legal battle centering around Cook & Co's strict control of its …

  1. Michael Jarve

    There are alernatives...

    As I've mentioned before, Apple's "walled garden" is a selling point for many, who have been burned by Android's lack of consistency or security, or Microsoft's utter lack of support. These customer's could choose an alternate platform, one that does not abide by Apple's rules and get, more or less the same apps. When my mother bought her iPhone 6, I told her that she could only get apps and what not from Apple (not that she uses many, beyond a default installation), and she said, basically, "Great! Only one website to visit!" She had started her smartphone odyssey with Windows Phone via Nokia (on my naive recommendation that MS would support it, since MS seemed to have a hard-on for mobile/desktop fusion at the time, and Mom owned a Windows 8 laptop), then moved to an Android Galaxy 4s (until she heard in the news that it could catch fire), and finally bought an iPhone 6. If my mother, ignorant of technology and business practices as she is, chose an iPhone, then if someone, apparently more savvy on both business and tech as the plaintiffs are also "chose" an iPhone than there is something rather suspicious about spending $700USD on a phone for some people... Simply, I smell a rat, and a multi-million dollar payout for 3 lawyers for a month's worth of work (I'm not counting the paralegals, assistants, secretaries, ect, who pretty much never see the fruits of multi-million dollar settlements/judgements, and who actually do the bulk of the work.

    As the article implies, it might be different if the developer were the one bringing the suit, but even then I would have a hard time swallowing the argument. Apple has a minority of the smartphone segment. And they make no secret to developers or customers what the rules are. Developers know what they're getting into when they bed with Apple. They can choose Android, or (HA!) even Microsoft. If they don't like Apples' terms, then they can move to a different platform, one that is more popular, and possibly, has higher margins.

    It would be no different than GM being sued because you can't put a cheaper Kia engine in your Cadillac, or Nintendo being sued because You can't install your Steam copy of Final Fantasy VII on your Switch. Are people going to start suing GM because they can't install a $500 Sedona engine in their STS and keep the warranty? If they do, are they going to sue GM, or Kia for that matter, when it doesn't work right? Where does it end, when you are given a choice? People are not forced to buy into Apple's ecosystem, or Microsoft's abandoned planet, when Android and it's multitude of vendors are in play, just as they're not forced to buy a Caddy, and can instead buy a sensible Camry.

    I'm not currently fond of Apple, though I have been in the past, but this is obviously just digging for gold, and hoping to strike it rich for a couple lawyers, and as an Apple consumer, I knew what I was getting in to. Indeed, I think that the entire concept of class-action lawsuits should be re-thought. It never "benefits" the supposedly injured and only serves to enrich a couple lawyers, and maybe their personal assistants. When Yahoo, Target, and so on (which I had consumer ties with) were hacked, I, as an "injured party" literally saw nothing. Lawyers saw a Christmas bonus big enough to upgrade their 20-foot boat to a 45-foot yacht.

    1. Jim Mitchell

      Re: There are alernatives...

      "It would be no different than GM being sued because you can't put a cheaper Kia engine in your Cadillac, or Nintendo being sued because You can't install your Steam copy of Final Fantasy VII on your Switch. Are people going to start suing GM because they can't install a $500 Sedona engine in their STS and keep the warranty? " Bad analogy, you can install a different engine in your car and keep the warranty on the rest of the vehicle. Go America! Heck, there is probably a video on youtube of somebody swapping a Kia engine into a Cadillac.

      1. Michael Jarve
        FAIL

        Re: There are alernatives...

        It's a perfect analogy. Someone, doing something obviously unauthorized because it's "cheaper" to the end user, then getting upset that the original company will not support it. Install a Volvo 2.3 in your Buick in America and see if GM, or Volvo for that matter will support a warranty...

        1. DavCrav Silver badge

          Re: There are alernatives...

          "It's a perfect analogy. Someone, doing something obviously unauthorized because it's "cheaper" to the end user, then getting upset that the original company will not support it. Install a Volvo 2.3 in your Buick in America and see if GM, or Volvo for that matter will support a warranty..."

          It's a terrible analogy. If you are going to use a car analogy, swapping out an engine would be like replacing the chip or the screen, and not covered by warranty. Apps would be like tyres and wiper blades. Say Ford invent a special wheel nut that only they can unlock, and have placed them on all their cars. You go to a garage and pay for someone to fit new tyres, but have to pay 30% of the bill to Ford, for the licence to use their new equipment to unlock the nuts they invented to stop you. Would you be happy? Do you think that would increase the cost of tyre replacements? Answer: yes, of course.

          1. Voland's right hand Silver badge

            Re: There are alernatives...

            Say Ford invent a special wheel nut

            Try changing the stereo on the newer cars. It is your "special wheel nut".

            1. Anonymous Coward
              Anonymous Coward

              Re: There are alernatives...

              Try changing the stereo on the newer cars. It is your "special wheel nut".

              Try changing anything electrical on a newer car. Many VW group cars (and I suspect plenty of others) will gripe and complain if you fit LED bulbs in lieu of factory supplied filament bulbs, although there's a Canbus setting to make it recognise the LED. Obviously, in the interests of your well being, that can only be changed by an expensive dealer visit, unless you want to try and hack the car's system. Likewise, enabling display link, or turning on "steering" foglights. Adding after market electrical accessories is equally fraught.

            2. tredle

              Re: There are alernatives...

              Never mind trying to change the stereo, how about installing you preferred navigation App on the stereo. How high is the wall on that garden?

              Or, if you want to 'upgrade' the navigation maps in your car stereo, how much does that cost the owner and how is it distributed between the car manufacturer and App developer.

              1. Voland's right hand Silver badge

                Re: There are alernatives...

                Never mind trying to change the stereo, how about installing you preferred navigation App on the stereo. How high is the wall on that garden

                The height of the fee Pioneer charges for an update to the set of maps. 130 quid every time if memory serves me right for most models of AVIC series.

                Please be so kind to place your hand on the table. Please do not resist while your veins are being tapped. Only a small amount of bloodletting to support your favourite brand. Surely you will not disagree with that? It is only fair that the car vendor gets a guaranteed blood as a service from your for as long as you own the car...

                Though frankly, I am being unfair. The issue here is not so much mandatory bundling and screwing the customer VW style. It is the insurers. It is not the warranty which is voided by adding or replacing apps on your stereo, it is the official insurance evaluation.

      2. Anonymous Coward
        Anonymous Coward

        Re: There are alernatives...

        It's not the engine part that is at issue.

        Imagine if you had to buy Kia tyres for a Kia, Chrysler tyres for your Chrysler....generic parts (Apps are not produced by the manufacturer, same as tyres are not produced by the big auto makers)

        The point in question is you have to go to the dealership and pay dealership mark ups, not to the local parts dealer who sells them cheaper (as there are NO alternative IOS app stores)

    2. LDS Silver badge

      "It would be no different than GM being sued because..."

      Sorry, the right analogy would be if GM forced you to use its own fuel, oil, tires, sparks, windshield wipers, mats, phone, USB storage, music, etc. - making them 30% more expensive. Nobody is asking Apple to be able to install their own processor, or memory - and keep the warranty.

      Nor anything or anyone would stop Apple to run an "Apple tested and approved" program for developers and users who want to be "sure" the apps aren't malicious.

    3. Major N

      Re: There are alernatives...

      Apple may be a minority in the rest of the world, but I believe they hold about half of the smartphone market in the US. Hardly a minority there, and since that is where the case is being held...

      1. D@v3

        Re: Minority of market

        While iOS may have a minority of the Mobile OS market, I would expect that of the actual hardware market that Apple are doing quite well (very well indeed before Huawei started being such a big deal).

        While anecdotal of course, i see many more people with a single model of iOS phone, than i do within an entire brand of Android phones.(for example, lots and lots of iPhone SE's, but relatively few Samsung phones)

        What is also worth remembering is, Apple hold 100% of the iOS market. At least with Android if you decide that you don't like the way Samsung (for example) are doing something, there are alternatives.

        (i had a point, but i think it got away from me)

      2. Anonymous Coward
        FAIL

        Re: There are alernatives...

        About half? You really have been drinking the American KoolAid....

        Try 20% on the US, and 14% worldwide....

    4. Ian Joyner

      Re: There are alernatives...

      "It would be no different than GM being sued because you can't put a cheaper Kia engine in your Cadillac"

      But actually, the App Store does allow you to do that. But Apple makes sure the new engines are safe to use. That seems like a good compromise.

      Meanwhile the lawyers are set to make good money!

  2. Confuciousmobil

    I use Apple devices precisely because you can only buy from one place and you know the apps will work.

    If you want a total mess, go Android. This case is farcical and should be thrown out immediately.

    1. ratfox Silver badge

      I use Apple devices precisely because you can only buy from one place and you know the apps will work.

      Sure. But why do you have to pay 30% extra for that?

      The problem is the markup. It might be convenient to you that there is only one place you can buy from, but from a different viewpoint, it's also a very convenient way for Apple to force people to overpay.

      Other app stores have started reducing their markups for some of their inventory, and the fact that Apple hasn't done the same does hint that users are paying more than they have to.

      1. anonanonanon

        As a dev, I don't like the 30% charge, it is too much, but also as a dev, have you seen the amount of free or sub 5 buck apps out there? Unless you're buying real specialised apps, most customers are hardly losing their life savings, or like, the price of a coffee

        1. DavCrav Silver badge

          "Unless you're buying real specialised apps, most customers are hardly losing their life savings, or like, the price of a coffee"

          Multiply that by the number of applications bought and the number of people and you get a big number. That's the total harm to the class.

    2. Zolko

      @Confuciousmobil : "because you can only buy from one place and you know the apps will work

      right, that's your choice. Keyword being choice: you have that exact same choice on Android. By default, only the official Google Play Store is allowed, but you can uncheck that option and then install any app you want. You can even uncheck that option temporarily to install an app you trust but that is not proposed by the Google Store - like F-Droid for example - and then re-enable the "security" again. The out-of-walled-garden app is still there.

      The outcome of this lawsuit will probably be that Apple will have to implement that choice in its iOS. You could still buy/get all your apps only from the AppStore if you choose so.

    3. Anonymous Coward
      Anonymous Coward

      "If you want a total mess, go Android."

      Seems you got fooled by the apple fud.

      Never ever found an app I bought for an old device never work on a newer device. The android API is very stable, and backward compatibility libraries providing all the new stuff to older OS versions means that everything just works.

      If you look at app compatibility and crash rates, they are significantly worse on iOS. How are those 32bit iOS apps working out for you on your latest device? What do you mean you have to buy a new version off the app to runpn your iPad? What do you mean the app won't run on my new device because apple introduced a new aspect ratio device? All these are real iOS things that all are collectively called FRAGMENTATION. Nobody talks about them as apple get upset and don't load you with free stuff and free trips...

    4. DerekCurrie Bronze badge
      WTF?

      Re: This case is farcical and should be thrown out immediately.

      Bravo Sir! Who are you foolish people in disagreement? Android users in denial? Irrational Apple haters? Please leave we wiser souls be.

  3. TheMeerkat

    I prefer iPhone to other phones because of the walled garden.

    If I wanted an adventure I would buy Android device. But I don’t - I have other things to do with my time.

    1. Damien Jorgensen

      "because of the walled garden"

      Do you live in a gated community too and get your shopping exclusively from one supplier?

      I wonder what peoples reactions would be to a single provider for household electricity, or indeed to only using the GPO for their internet connections.

      Apple is milking its users. Some of them are are deluded they actually love it lol

      1. Dan 55 Silver badge

        I imagine some people might quite like just a single electricty supplier instead of the farce of jumping from one to another every year/18 months.

        Likewise I guess many here end up sticking with one ISP once they're found one which is reliable.

      2. anonanonanon

        Don't know, if that gated community vetted all tradesmen that came and made sure they weren't casing your joint to rob you later.

        Many of Apple's app store restrictions and vetting are very security minded and customer friendly, and I'm sure it infuriates some people, just don't buy an iphone?

        I'll say it over and over, on any tech websites, there's a bunch of people who think they're very smart and don't understand how normal people don't want to vet everything they install on their smartphone because it shouldn't be easy to break your goddam phone and then take it to some nerd to sneer at you saying you should have checked the software you installed on it and if only they'd consulted them they wouldn't be in this mess.

      3. Spazturtle Silver badge

        "I wonder what peoples reactions would be to a single provider for household electricity"

        There is only a single provider for household electricity, the national grid. You just get a choice of payment providers. Apple provide the same choice, you can chose to use Visa, Mastercard, ect.

        1. Anonymous Coward
          Anonymous Coward

          There is only a single provider for household electricity, the national grid. You just get a choice of payment providers. Apple provide the same choice, you can chose to use Visa, Mastercard, ect.

          That's not the case. National Grid owns and operates the national transmission infrastructure, aka the national grid. The electricity companies buy power from the generating companies and pay NG to transport it for them. The product may be fungible but that isn't the same as saying there is a single provider.

  4. big_D Silver badge

    Monopoly probe...

    Apple may soon find itself at the center of a monopoly probe before the United States Supreme Court, based on opening arguments heard on Monday.

    Don't you have to be a monopoly first? With 13% smartphone market share and <6% desktop, they don't seem to be a monopoly anywhere.

    1. Anonymous Coward
      Anonymous Coward

      Re: Monopoly probe...

      I'm fairly sure that the market share of Apple in US is fairly higher than in the rest of the world. When it comes to local anti-trust laws, it really doesn't matter what market share you have in a different country or the worldwide average - what it matters is the local market share.

      Update: it looks Apple has a 44% market share in US:

      https://www.statista.com/statistics/266572/market-share-held-by-smartphone-platforms-in-the-united-states/

      Probably enough for an anti-trust probe...

      1. DougS Silver badge

        Re: Monopoly probe...

        44% isn't enough to be considered a monopoly in the US, they'd have to use some sort of new argument that the app store constitutes a "monopoly on iOS" and ignore that iOS doesn't even have a majority of the overall smartphone market share. Of course, the iOS market share in "smartphones" would have been much higher when this case was brought almost a decade ago so even if it can't be considered a monopoly in 2018 it might have been in 2010 (and the potential damages would be pretty small)

        However, this hearing / decision is just about standing - whether app purchasers can sue Apple at all, or if only the app developers would be allowed to sue. Apple argues that they just provide "shelf space" for the apps and mark it up, similar to how a retail store provides shelf space for products which they purchase at wholesale and mark up to sell at retail.

        Back when software was sold prepackaged in retail stores like Best Buy, I'll bet most of it was marked up more than 30%.

        1. Anonymous Coward
          Anonymous Coward

          "Back when software was sold prepackaged in retail stores"

          Comparing apples to oranges? Physically packaged software had inherently higher costs (and good manuals) - warehouse stocks and shelf space, more intermediaries, unsold obsoleted products, etc. - you do exactly expect downloadable software to be far cheaper.

          Also, remember anti-trust laws are also against cartels and dominant positions, not pure "monopolies" only. Let's see what the court will rule.

    2. Charlie Clark Silver badge

      Re: Monopoly probe...

      Nah, restrictive practices are restrictive practices. Cf. Nestle losing its ability to be the only supplier of very expensive coffee for Nespresso machines. This should be a fairly simple smackdown against Apple, except that Silicon Valley often gets an easy ride in front of American courts. This is only partly down to the difficulty of applying some definitions of monopolies to the digital domain.

      FWIW the 30% is something developers should be litigating against. Consumers should be pointing out the general lack of choice: Apple says you can't have different browser engines or mail clients or music players. This is not only restricting competition, it is also limiting innovation and also potentially reducing security: it's not as if Safari doesn't have its own share of zero days.

      1. DougS Silver badge

        Further thoughts

        The figure of merit used for to determine monopolies for app stores is installed base, not market share. iPhones to be used longer than Android phones, and have a second life after the original owner replaces them. According to the below graph, the installed base of iPhones is growing at over 10% a year in the US despite flat unit sales. At 180 million, it is safe to say more people in the US use iPhone than use Android.

        https://9to5mac.com/wp-content/uploads/sites/6/2018/11/cirp.jpg

  5. Door Handle
    Headmaster

    30%?

    "But the point is that this closed loop with Apple as its spoke, they are the first purchaser of that 30 percent markup."

    If Apple takes a 30% cut then the markup is surely 43%. Or do I misunderstand?

  6. Mr F&*king Grumpy

    Cost argument doesn't make sense

    The 30% that developers pay to Apple and _allegedly_ recoup includes distribution and (partial) marketing costs. If the App Store did not exist, or if there were alternative App Stores, the requirement and cost of designing, installing and maintaining a distribution system would not go away. I don't see much grounds for claiming that in a non App Store world consumer pricing would necessarily be lower... And small publishers would have severe problems getting any traction at all.

    1. Anonymous Coward
      Anonymous Coward

      Re: Cost argument doesn't make sense

      Cost would not go away but 1) there would be more competition that could drive prices down 2) Free apps could be delivered through free repositories 3) Companies that already have the capacity could deliver the apps themselves. Small publisher will have traction as they always had before - do you really believe any store really gives any visibility to small publisher among the hundreds of similar apps?

  7. Gene Cash Silver badge

    The problem is that Apple is double-dipping

    Lots of people buy iPhones/iPads because various apps (e.g. Foreflight) only run on them. Thus, the App Store helps Apple sell devices.

    They then have the gall to charge developers a large fee for their hard work selling Apple products.

    5% or 10% might be overlooked, but 30% is ridiculous.

    I'm an Android fanboi because of things like fdroid, which sells open source apps only, and compiles them from source itself, so you can look at the source of the app you're running. You can't get that with an Apple product because of their monopoly.

    1. Mike Moyle Silver badge

      Re: The problem is that Apple is double-dipping

      "I'm an Android fanboi because of things like fdroid, which sells open source apps only, and compiles them from source itself, so you can look at the source of the app you're running."

      And, if that's what floats your boat, that's fine. The vast majority of the rest of the world has very little skill at vetting source code, and far less interest in wasting their leisure time doing so. It helps to remember that, statistically speaking, in terms of interest and ability in such things the majority of regular El Reg readers are outliers

  8. Duncan Macdonald Silver badge

    Alternative App Store

    If Apple allowed ordinary users to install apps from other stores then there would be no case against Apple. It would be perfectly possible for Apple to allow third party stores with a warning (just like Android gives a warning when installing an apk from a third party). However Apple makes a lot of its money from its app store so it will not give users the choice until it is forced to. (After all if it lost then it might find its share price dropping !!!)

    It would not surprise me to find Apple trying to find out how much it takes to bribe a group of judges.

  9. quattroprorocked

    Simples.

    Apple should allow other app stores to work with iphones, albeit with a warning that "this app you are about to install has not been through the Apple QA process, and, if it is malicious or badly designed, may break your phone."

    Users can then decide to get the App from Apple instead, if they wish.

    My prediction - most users will stick with Apple.

    1. Anonymous Coward
      Anonymous Coward

      That's basically the model they use on MacOS where you have three choices: App Store (install straightaway), Registered developer (installs after warning, used if you want to have a bit more leeway in what you can do in the app, but with that comes, of course, more risk) and Just.Friggin'.Install.It which still requires you to authorise the install, but which then gives free reign to whatever you downloaded off the Interwebs.

      The last one I will simply not do, but there are some applications I use that come direct from the vendor where I checked out the vendor first.

      Apple could use that 3 tier model in iOS as well, but it would mean taking on extra risk. If it all goes wrong, the users are unlikely to blame themselves for it..

  10. mark l 2 Silver badge

    Apple do have a monopoly on purchasing of apps for iphones/ipad etc, as unless you jailbreak your device - not a straight forward task for most people and in doing so would invalidate your warranty - you can't install apps from another other sources.

    As people like car analogies I would say its the equivalent of purchasing a card from Ford but for their warranty to say you can only buy accessories from a Ford dealership. Sure it will still work without them, but if you want to add some car mats and a phone holder etc you have to pay Ford a 30% mark up to buy them from their approved store or loose your warranty.

  11. 45RPM Silver badge

    Surely this falls down because the iOS App Store is not the only way to legally deploy apps on your iPhone.

    You could download, build, and install from source - and some apps have been delivered in exactly the manner, complete with easy to use tools suitable for noobs.

    And has everyone forgotten PastryKit? It’s so quiet on the PastryKit front that I thought maybe the latest iOS doesn’t support PastryKit apps anymore. So I tried one (you can install this game yourself from here http://mrgan.com/pieguy/) and sure enough it still works.

    I think that the reason the App Store is seen as the only game in town is because it’s the most popular game in town. It is a monopoly only by virtue of being so good (and no one made you buy an iOS device anyway). So all this legal action is just money grubbing lawyers doing what money grubbing lawyers do best. And there’s a word for that.

    Parasites.

  12. Aristotles slow and dimwitted horse Silver badge

    It's absolutely anti competetive

    It's about choice. Can I sell my IOS apps via any other method than through the Apple app store without supposedly "violating the warranty"? No I can't.

    Is there any other way I can sell my IOS apps without having to pay Apple 30% of my sales price for the privilege? No I can't.

  13. mabl4367

    Just to pint it out...

    Apple taking 30% means the customer pays 1/(1-0.30) or close to 43% higher price.

    1. LDS Silver badge

      Re: Just to pint it out...

      Pricing is not so straightforward. Many factors have to be taken into account to price a good, including apps, i.e. competitors prices, intended target, etc. Still, any seller knows they will get only 70% of any price they set, and that's a big factor.

  14. DerekCurrie Bronze badge
    FAIL

    Do We Want / Require App Security?

    If not, welcome to the equivalent of the Android app market, where millions of victims have been infected with malware, where mass Android device infections are reports on a monthly, if not weekly basis.

    I read and collect all the Android malware reports. I can put together a recent timeline justifying my point above.

    Apple walled garden? Yes please!

    And no, the prices of decent apps worth having and using are NOT any higher than the prices of equivalent macOS or Windows or Android apps. I personally despise monopolies and the severe abuse they perpetrate against their customers. Do I sense even a whiff of monopoly abuse created by the iOS App Store? NO.

    So please, unjustifiably disgruntled plaintiffs: Go home and let the rest of us ENJOY Apple's delightful walled garden. Go buy Android gear instead and see what life is like on the other side of the wall. It's not safe out there. And the good Android software isn't any cheaper. Sorry!

  15. DerekCurrie Bronze badge
    Holmes

    BTW: What is Google's cut of app sales at the Play Store?

    30%

    Just like Apple's cut at the iOS App Store.

    IOW: Again, the argument that good and useful iOS apps are more expensive than the same on Android is incorrect.

    1. Duncan Macdonald Silver badge

      Re: BTW: What is Google's cut of app sales at the Play Store?

      However Android app developers can sell apps outside the Google store and some do. It is also possible to install an old version of an Android app from an apk file if you do not like something about the current version. (In my case I prefer the UI of an old version of Aldiko (a bookreader app) so I have the old version installed and do not update it.)

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