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Apple seeks dismissal of iPhone App Store monopoly lawsuit

post #1 of 38
Thread Starter 
Apple has asked for the dismissal of a 2011 suit that claims the company has a monopoly over applications available for download on the iPhone.

The two-year-old lawsuit accuses Apple of monopolistic practices by preventing developers from selling their software at a discounted price anywhere else. Apple takes a 30 percent cut of all content sold through the App Store, and its rules dictate that content providers cannot charge less for the same material sold elsewhere.

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But Apple believes the suit should be tossed, according to Bloomberg, because the company doesn't set the price for paid application, and there are no antitrust laws against charging a price for distribution of a product.

Apple asked U.S. District Judge Yvonne Gonzalez Rogers to dismiss the suit in a hearing held in Oakland, Calif., this week. The same judge will also oversee a separate antitrust lawsuit that accuses Apple's iTunes of holding a monopoly position in the music downloading market.

The original app monopoly lawsuit was filed by seven consumers. An attorney representing the plaintiffs argued against the case being dismissed, noting that iPhone users cannot go anywhere but Apple's App Store to buy Angry Birds for their device.
post #2 of 38
Think someone needs to smack the plaintiffs round the head with a "it's not a crime to hold a monopoly, it's a crime to abuse a monopoly" mallet.

No DRM on music and the web as an open environment for app developers, as well as "iPhone apps" and "music downloads" not being industries in themselves means this is a pile of non-issue.

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post #3 of 38

And buying the iPhone is an option to everyone, unlike the times when we were forced to use crappy windows machines.

 

Apple can do what they want. Don't you like it? Don't buy it.

 

Microsoft also has the right to do the same thing with windows 8, as they should. We have choice now.

post #4 of 38
Same, please edit your tag line. Did you mean to say "Apple asks for" instead of "Apple has for"? I usually don't comment on typos but please proofread your articles, especially the short ones.

As for those consumers who want to go to a different store for iPhone apps all I can ask is why? The App Store is web based as would any other potential competitor. Do they expect to get those $0.99 apps for $0.98?
post #5 of 38
This is not about consumers. This is about lawyers trying to make big bucks on class action lawsuits. Ever get a legal notice about those based upon stocks that you've owned? The shareholders get a few pennies per share and the law firm gets $200 million. In most cases, it's not even worth my time to fill out the forms.

Having said that, I think there is a slight chance a court could rule that Apple's insistence on exclusivity is abusive. Think about it: in the iTunes store, you can sell an MP3 track via Apple and also sell it elsewhere. Apple only gets their 30% on what you sell in their store. Why should the app store work any differently?

On the other hand, if Apple did permit apps to be sold elsewhere, someone could open a copycat app store and charge developers 20% instead of 30% and that could be considered unfair (although not illegal). Perhaps there's a middle ground where developers can sell their apps on their own websites, but not via other distributors. I think this would be especially helpful to those developers whose apps don't "float to the top" of Apple's site. With 300,000 apps on Apple's site, most apps have virtually no visibility. And I bet the top 100 apps generate 90% of Apple's revenue anyway.
post #6 of 38
I have recently begun to refuse to to participate in class action suits. It does me no good and only serves to cause prices to increase, IMHO, as lawyers get huge pay days and nothing changes.
post #7 of 38
Kill the lawyers first.
post #8 of 38
There have been suits before about Apple's vertical integration and Apple always wins them. VI is not illegal and not antitrust. Nor is being popular, like iTunes is, anti-trust.

The only thing that Apple might get dinged on is if they have a favored nation clause that constricts the pricing for other ports of an item. So say you see Angry Birds for iOS for $4.99, the FNC demands that Angry Birds for Android can't be less than that. But that doesn't seem to be the argument in this case but rather that developers have to go through Apple if they want to be 'legit'

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post #9 of 38
Quote:
Originally Posted by zoetmb View Post
I think this would be especially helpful to those developers whose apps don't "float to the top" of Apple's site. With 300,000 apps on Apple's site, most apps have virtually no visibility. And I bet the top 100 apps generate 90% of Apple's revenue anyway.

 

Many of those apps don't have any kind of advertising going on. You can't just make an app, dump it in the store and expect to make your fortune. 

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A non tech's thoughts on Apple stuff 

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post #10 of 38

The ironic thing is that before the Apple App Store, Jobs used to poke fun at carriers and their app "walled gardens"... and yet all he did was turn around and create his own, even higher walled garden.

 

(It's higher, because carriers allowed smartphones to download apps and media from any store, not just theirs.)

 

Quote:
Originally Posted by charlituna View Post

Many of those apps don't have any kind of advertising going on. You can't just make an app, dump it in the store and expect to make your fortune. 

 

It used to be that the app seller did that for you in return for their percentage.  When I started selling software in the 1980s, distributors paid for magazine ads, and they would also go to computer shows and demonstrate and sell your app. 

 

Granted, they took a higher percentage, but you consistently made money, because your products stayed in the public view.

 

Of course, it was also a different market, without hundreds of thousands of competitors.

 

The upshot is, yes, you're so right.  Advertising is key.

post #11 of 38
So Apple is getting sued for insisting products sold in their App store has the lowest price. I'm kind of slow to understand how is that hurting consumers.
post #12 of 38
Quote:
Originally Posted by KDarling View Post

The ironic thing is that before the Apple App Store, Jobs used to poke fun at carriers and their app "walled gardens"... and yet all he did was turn around and create his own, even higher walled garden.

 

(It's higher, because carriers allowed smartphones to download apps and media from any store, not just theirs.)

 

 

It used to be that the app seller did that for you in return for their percentage.  When I started selling software in the 1980s, distributors paid for magazine ads, and they would also go to computer shows and demonstrate and sell your app. 

 

Granted, they took a higher percentage, but you consistently made money, because your products stayed in the public view.

 

Of course, it was also a different market, without hundreds of thousands of competitors.

 

The upshot is, yes, you're so right.  Advertising is key.

You are so obtuse...

 

Do you really think that the App Store is like anything created before? That's more than obtuse. Android chill. Same sh*t on Mac Rumours.

post #13 of 38
I think the tricky subject is 'price elsewhere'. Selling wares on iTunes restricts price competition elsewhere and is thus on the whole, bad for the consumer, and to me, of doubtful legality.
post #14 of 38
so, because apple says you can only download from their App Store, it's a monopoly?

then go to an android and download viruses.

these people just don't understand.
post #15 of 38
One way Apple could argue against their monopoly status is to point out how jailbreakers of the iPhone can install their own apps. That is, until opposing counsel points out that Apple actively works to stop jailbreaking. Oops. Perhaps Apple should stop fighting the jailbreak community to keep its ass out of the fire? #pipedream
post #16 of 38
Originally Posted by ktappe View Post
That is, until opposing counsel points out that Apple actively works to stop jailbreaking. Oops. Perhaps Apple should stop fighting the jailbreak community to keep its ass out of the fire?

 

Uh, "oops" nothing. Apple is doing zero wrong and has zero responsibility to allow an easy time of that.

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post #17 of 38
Quote:
Originally Posted by charlituna View Post

There have been suits before about Apple's vertical integration and Apple always wins them. VI is not illegal and not antitrust. Nor is being popular, like iTunes is, anti-trust.

The only thing that Apple might get dinged on is if they have a favored nation clause that constricts the pricing for other ports of an item. So say you see Angry Birds for iOS for $4.99, the FNC demands that Angry Birds for Android can't be less than that. But that doesn't seem to be the argument in this case but rather that developers have to go through Apple if they want to be 'legit'

Can Apple lower the price? In turn would Rovio then have to lower the price on other platforms?
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"Just because something is deemed the law doesn't make it just" - SolipsismX
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"Just because something is deemed the law doesn't make it just" - SolipsismX
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post #18 of 38
Quote:
Originally Posted by pedromartins View Post

Do you really think that the App Store is like anything created before? 

 

Of course it is. 

 

  • Users are only allowed to download apps from a certain store.
  • The store is accessible and paid for from the phone.
  • The user does not have to enter account data each time.  
  • You pay to be a developer.  
  • Your app is vetted before being allowed in.
  • You get a percentage.

 

That's exactly the model used by the feature phone carrier app stores that long predated Apple's store.  

 

Didn't you ever download an app or ringtone with an old flip phone?

post #19 of 38

I think this one should be dismissed.  If not, it will go Apple's way anyway.  If Apple lost this the precedent would have too many repercussions.  It would be like saying Ron Jons surf shop has a monopoly on Ron Jons T-shirts because you can only buy them at an actual Ron Jons store.  Trader Joe's has a monopoly on Trader Joe's items because they don't sell them anywhere else. etc etc.  People have a wide choice of T-shirts or supermarket items at other stores so their tight control of their products doesn't represent a monopoly.  

 

If Apple owned 80% or 90% of the smartphone market you'd have a strong case alot like they one they pushed against IBM with their Big Brother ad because IBM was evil and controlled both the hardware *AND* software and wouldn't let anyone else into their ecosystem (remember those days?).  But Apple doesn't have 80/90% share.  People have choice.

 

The choice ultimately lies with the consumer.  If you're okay with being forced to shop at only one store that has high prices, go there.  If you're not, shop somewhere where you do have choices (for better or worse).

 

Most Apple users pride themselves on the fact that even though they are less than 25% of the smartphone market, they pay Apple 70% of the industry profits.  Let them. The people who prefer not to be involved in that system do have other options and the market is speaking for itself- working as intended without court intervention needed.

post #20 of 38
Quote:
Originally Posted by charlituna View Post

There have been suits before about Apple's vertical integration and Apple always wins them. VI is not illegal and not antitrust. Nor is being popular, like iTunes is, anti-trust.

The only thing that Apple might get dinged on is if they have a favored nation clause that constricts the pricing for other ports of an item. So say you see Angry Birds for iOS for $4.99, the FNC demands that Angry Birds for Android can't be less than that. But that doesn't seem to be the argument in this case but rather that developers have to go through Apple if they want to be 'legit'

 

 

The FNC never applied to Apps, music, movies etc..... Only iBooks and it is no longer being enforced. 

post #21 of 38
Quote:
Originally Posted by dasanman69 View Post


Can Apple lower the price? In turn would Rovio then have to lower the price on other platforms?

 

 

Apple doesn't set the prices. The people selling the goods do. Unlike Amazon, who can force a sale on apps or music.  Amazon pay the record industry the full price for the music, but it does not with apps.

post #22 of 38
@Frood ... actually, you can buy vintage ron jons on ebay and other online stores. Can you get any ios app anywhere else besides iTunes?
post #23 of 38
Quote:
Originally Posted by Spacepower View Post


Apple doesn't set the prices. The people selling the goods do. Unlike Amazon, who can force a sale on apps or music.  Amazon pay the record industry the full price for the music, but it does not with apps.

Question was can they? They obviously didn't let the music industry charge what they wanted so what's to stop them from doing it with apps?
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"Just because something is deemed the law doesn't make it just" - SolipsismX
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post #24 of 38
Originally Posted by AppleInsider View Post

An attorney representing the plaintiffs argued against the case being dismissed, noting that iPhone users cannot go anywhere but Apple's App Store to buy Angry Birds for their device.

 

I wonder if that same attorney has noted that fast food diners cannot go anywhere but McDonald's to buy Big Macs for their fat kids' cakeholes.  S/he just might get the idea that "consumer" plaintiffs could sue McDonald's for having a monopoly on Big Macs.

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post #25 of 38
Originally Posted by dasanman69 View Post


Question was can they? They obviously didn't let the music industry charge what they wanted so what's to stop them from doing it with apps?

 

Moot point.  Having the ability to set app prices isn't the same as actually setting app prices.

You can easily kill someone with a pencil.  But carrying a pencil around doesn't make you a murderer.

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post #26 of 38
Quote:
Originally Posted by SockRolid View Post

Moot point.  Having the ability to set app prices isn't the same as actually setting app prices.
You can easily kill someone with a pencil.  But carrying a pencil around doesn't make you a murderer.

Actually it is not a moot point. Can they use their monopolistic power to change prices as they see fit? Many here will tell you that a monopoly will always abuse it's power and raise prices.
"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
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"Just because something is deemed the law doesn't make it just" - SolipsismX
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post #27 of 38
(It's higher, because carriers allowed smartphones to download apps and media from any store, not just theirs.)

This has got to be false or my memory fails me.

Or are we talking about 10 or so apps per device?
post #28 of 38
Quote:
Originally Posted by dasanman69 View Post

Quote:
Originally Posted by SockRolid View Post

Moot point.  Having the ability to set app prices isn't the same as actually setting app prices.
You can easily kill someone with a pencil.  But carrying a pencil around doesn't make you a murderer.

Actually it is not a moot point. Can they use their monopolistic power to change prices as they see fit? Many here will tell you that a monopoly will always abuse it's power and raise prices.

 

Apple doesn't set the prices of apps, the developers do. Apple stipulates what can be the reasonable increments for simpler pricing (e.g. $0.99, $1.99, $2.99). Apple also states what percentage of the sale goes to them as part of a distribution/maintenance/SDK maker fee. This is all in the contract the developer signs to agree to become a 3rd party developer for Apple's proprietary mobile OS. Apple doesn't have to give any licenses to 3rd party devs if it didn't want to! It's their OS, it's their rules.

 

The only difference would be if Apple used their developer contractual agreements to prevent 3rd party developers from developing for other mobile OSes. To date, I have not seen Apple demand that. Case dismissed.

 

Edit: To further illustrate my point, 3rd party devs regularly have the same app on iOS and Android, and that same app on Android is cheaper! No monopoly here, sir.

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post #29 of 38
Yes, you are slow. The point here, is monopoly!
post #30 of 38
Quote:
Originally Posted by gcguy View Post

Kill the lawyers first.

Maybe you could come up with something original, or useful.

 

If a manufacturer discharged chemicals into your yard, you'd be the first to run to a lawyer. Are you 14 years old?

post #31 of 38
Quote:
Originally Posted by pk22901 View Post

Quote:
(It's higher, because carriers allowed smartphones to download apps and media from any store, not just theirs.)

 

This has got to be false or my memory fails me.
Or are we talking about 10 or so apps per device?

 

Featurephones could usually only download from the carrier's store.  E.g. a Verizon flip phone could only download from its built-in Verizon store menu.  What was that called?  Oh yeah, VCast.

 

That seems like it would set a precedent for Apple's store.

 

Smartphones (Blackberry, Windows Mobile) could download apps from anywhere.  They were not restricted to just using the carrier's store.   Some even came with a Handango store client, IIRC. (I had a Handango account and used it fairly often to get WinMo apps.)  You could also download a J2ME runtime and use those apps as well.

 

Quote:
Originally Posted by silverpraxis View Post

Edit: To further illustrate my point, 3rd party devs regularly have the same app on iOS and Android, and that same app on Android is cheaper! No monopoly here, sir.

 

Right, although I recall iOS developers saying that they could not mention their Android version in their Apple app.

post #32 of 38
If Apple prevent developers from selling cheaper on other platforms how come some apps I have paid for on iOS are free on android? Dead trigger is one example.
post #33 of 38
Well at least apple dose not require it only on there store, just same price so why is this stress.
post #34 of 38
What I don't see is why people go after apple for this. Yes Apple has deep pockets. But so does Sony, Microsoft, and Nintendo and on their consoles (which are just specialized computers anymore) you can only buy downloadable content (apps) from their built in store. Vertical integration and walled gardens are not at all limited to just Apple and iOS. It's been used for years.
post #35 of 38
A lot of the commenters haven't put any thought into this, it seems. Imagine you had a car. Imagine anything you wanted to buy for that car, you could only get at one store. New tires, new decals, a battery, etc. Only one store was allowed to sell anything for that car. That store could charge whatever mark-up it wanted. While it might carry 2 different kinds of tires, it got the same cut of 30% from whatever you purchased. And, because it didn't like a certain kind of decal or product, it decides not to stock it. So, you're out of luck unless you go to a 'grey market' where before you can use your new tires or what have you, they need to void the warranty of your car.

Would you put up with this? Or would you demand that you could buy parts for your car from any store that sold car parts?

Most people would want to be able to make a choice.

Apple has managed to capture the app market two ways - one, by being there first with an exceptional and innovative product. Two, by preventing any competition on the iOS platform for who can sell these products. While you might have chosen to purchase an Apple product, the locking in of where you can purchase native software for it after is anti-competitive. This reduces the choice available to the consumer whose purchased an Apple product. It reduces the choices for developers (in terms of what apps they can produce, and where they can sell them). It fixes prices against developers, rather than having competition driving prices down (why should 30% be the cut for selling a product? In many grocery store aisles, a store is lucky to make 2% on that item, as an example). It also limits innovation. Rather than having to constantly improve their App store, Apple can go at their own pace. If you're fine with having to wait 2 years before you can install an update without entering your password, then fine. For others, we're looking at what is beginning to happen (competition there is in its nascent stages) in the Android market place and we're getting jealous.

--

I saw a comment where someone was saying if someone opened another App store and charged developers 20% instead of 30% that would be unfair. I don't know what communist country you're from, but in a country where capitalism is only 20 years old, even I know that if someone introduces a competing product for a better price that's called competition, and it's hardly unfair. What's unfair to consumers and to developers alike is when the industry decides to charge a fixed price across the board, with no room for competition. I have a problem with a central authority dictating where and what software I can install, and having to pay a fixed 30% cut to that central authority. That being said - I have 5 Apple products right now, and I do like them - but my next smartphone purchase will be an Android.
post #36 of 38

I certainly do hope for this whole suit to get dismissed. Both form a user and developer perspective.

 

My reasoning is simple:

 

While I can understand that certain uses expect more freedom of choice and competition and also a loosening of iOS restrictions themselves, this is not what Apple does and it is not why Apple is so successful. Having a single App Store, a tightly monitored and curated one adds to the Apple experience. It is all about integration and the App Store plays a key role in that. Especially in the context of post-PC devices, where most people apparently prefer a curated but well working, high quality experience over the hassle and stress of maintaining a healthy system, which ends up feeling like work.

 

There is exactly a single point for people to buy apps and for developers to sell them. Contracts are being made with one company, rules to be followed are Apple's and noone elses. Imagine we'd get multiple App Stores, some curated, some not, some with different rules, some allowing apps more access to the system than Apple does, etc. This would lead to a whole mess and an experience similar to Android. I believe most iOS users actually wouldn't like it. And developers wouldn't either.

 

The integrated experience, one-click purchasing, trust and quality is what makes the App Store so successful. Taking this away by creating a clusterfuck of "choice" will only lead to a huge mess and yes, I believe ruing a one of the most important aspects of the seamless iOS experience.

post #37 of 38
Maybe Apple has it right, though the whole non monopoly thing maybe relies too much on a very high priced iPhone to dampen demand. Otherwise Apple would have troubles like Microsoft had on the past? It maybe gets far more tricky as Apple competes on price.
post #38 of 38
Quote:
Quote:
Originally Posted by silverpraxis View Post

Edit: To further illustrate my point, 3rd party devs regularly have the same app on iOS and Android, and that same app on Android is cheaper! No monopoly here, sir.

 

Right, although I recall iOS developers saying that they could not mention their Android version in their Apple app.

 

Right, although I don't see products at Wal*Mart advertising cheaper versions of themselves at Target either. Stores, whether physical or virtual, usually don't advertise other stores and I would think if they are smart not allow products they carry to advertise other stores either. It's commonsense, not a monopolistic practice.

When a company stops chasing profit and start chasing the betterment of their products, services, workforce, and customers, that will be the most valuable company in the world.
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When a company stops chasing profit and start chasing the betterment of their products, services, workforce, and customers, that will be the most valuable company in the world.
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