New EU laws could soften Apple's grip on App Store content and revenue
The European Commission is preparing new regulations that could reduce some of Apple's absolute control over the App Store, in light of the company's position as a "gatekeeper" for customers.
The Commission's initiative, which isn't Apple-exclusive, should be ready by the end of the year, Reuters said on Wednesday. It will specifically address unfair contract clauses and trading practices between platforms and businesses -- other affected platform holders could include the likes of Amazon, Google, and Facebook.
In early findings from an investigation started in 2016, the Commission said it learned that platforms were limiting access to data, delisting products or services without sufficient notice, or failing to make search results transparent. The new rules will be geared toward establishing fair practice criteria, as well as offering dispute resolution.
Apple has often been criticized for harsh App Store policies, such as kicking out apps it deems political statements or too competitive with its own. It also normally claims a 30 percent cut from all App Store transactions, even subscriptions to outside services, and blocks developers from linking to Web-based workarounds.
As a result, some services have resorted to charging higher fees on the App Store than they do elsewhere. Even when companies are willing to take the hit, that gives Apple an inherent advantage, since it can keep prices low for its own products like Apple Music, without splitting revenues.
The Commission is presumably responding to complaints from European firms like Spotify, Deezer, and others. In June last year, Sweden's Spotify sent a letter to Apple's general counsel accusing the company of anti-competitive behavior.
EDiMA -- an industry group representing Apple, Amazon, Google and others -- said it was "disappointed and astounded" by the Commission's announcement, claiming that "considering online platforms 'key gatekeepers' deviates greatly from the progressive thoughts put forward by the Commission in its platform communication in 2016."
The Commission's initiative, which isn't Apple-exclusive, should be ready by the end of the year, Reuters said on Wednesday. It will specifically address unfair contract clauses and trading practices between platforms and businesses -- other affected platform holders could include the likes of Amazon, Google, and Facebook.
In early findings from an investigation started in 2016, the Commission said it learned that platforms were limiting access to data, delisting products or services without sufficient notice, or failing to make search results transparent. The new rules will be geared toward establishing fair practice criteria, as well as offering dispute resolution.
Apple has often been criticized for harsh App Store policies, such as kicking out apps it deems political statements or too competitive with its own. It also normally claims a 30 percent cut from all App Store transactions, even subscriptions to outside services, and blocks developers from linking to Web-based workarounds.
As a result, some services have resorted to charging higher fees on the App Store than they do elsewhere. Even when companies are willing to take the hit, that gives Apple an inherent advantage, since it can keep prices low for its own products like Apple Music, without splitting revenues.
The Commission is presumably responding to complaints from European firms like Spotify, Deezer, and others. In June last year, Sweden's Spotify sent a letter to Apple's general counsel accusing the company of anti-competitive behavior.
EDiMA -- an industry group representing Apple, Amazon, Google and others -- said it was "disappointed and astounded" by the Commission's announcement, claiming that "considering online platforms 'key gatekeepers' deviates greatly from the progressive thoughts put forward by the Commission in its platform communication in 2016."
Comments
Witch hunt is exactly the right term.
Apple can easily benefit from this. At the moment they get exactly nothing from my Amazon prime membership, or my fairly frequent amazon orders. As I now go to the website.
Instead of taking 30% of the retail price -- which eliminates most profit - they need to use Apple Pay and charge a reasonable usage fee, similar to the credit card fee.
Although, given what happened in the last couple of years, in no way I would consider it as a compliment.
That is like not allowing a straight A student to use his brain, because that would be anti-competitive in respect to a D grade student.
Umm, Apple does not get a cut of retail goods sold through apps, they only take a cut of digital content and subscriptions purchased via their platform.
You have to remember, and so does everyone else, iOS is not an open platform and never has been. Apple didn't all of sudden make these changes when the platform became popular. Apple shells out a lot of money to keep their platform viable and if others want access to it, they should have to help cover some of those costs.
"A key factor to consider is the role of platforms as gateways to consumers and as competitors to services in downstream markets and their ability to turn into gatekeepers."
So apparently Apple can't market it's own music streaming platform, on their own OS, and on their own hardware. Makes a lot of sense. What's stupid is you don't need to go through Apple to purchase a Spotify plan. I fail to see how Apple is being anti competitive. Having an App Store and their own OS isn't free for Apple. They spend billions on that.
Sounds like this will affect Google a lot more than Apple.
Wouldn't it be better to wait for something to actually happen before spouting off utter nonsense?
Would it be fair to describe the US as a telephone network backwater? An internet infrastructure laggard?
How long did it take for EMV to arrive?
As for competition, would I be wrong in saying that the US tried to stop The EU's Galileo project in its tracks? One of the most ambitious projects ever to come out of the EU.
Would I be wrong in saying that US consumer protection legislation, environmental legislation and food legislation are way behind their counterparts in Europe?
Are you aware of the benefits brought about by the Open Skies policy in the EU? The High speed rail networks? The scientific networks?
Europe may be far from perfect but in spite of all the difficulties, it has achieved so much more as a single unified unit than any single country could have achieved on its own and competion law is taken very seriously.
We will see how things play out and under what terms, but rest assured, if any player feels that EU decisions go too far, they can walk away from the table. However, I feel that walking away from the world's largest trading bloc isn't being considered by many of those players.
The article is very clear. Reasons have been provided. The EU is looking at the complaints. Now it's time to wait and see.
Its sounds like the commission wants to make sure these app stores don't control or restrict in an arbitrary fashion.
App stores are not products, they are effectively media platforms. They throw up lots of complex issues around power, influence and citizen rights. There's been lots of straw man arguments about weaker products etc. - it says nothing about banning gatekeepers from providing products. If anything, it could encourage investment by providing clearer rules for how these entities operate. If you know the rules will be applied fairly or you have the right to reply, you're more likely to invest in that app.
Lastly, if we didn't question market dominance or monopoly behaviour, we'd probably still be using IE. Democracy is eternal vigilance and transparency is good for everyone. If you make a great product, you don't need to act like a monopoly do you? I seem to remember a time when I bought Apple product because they were innovative and great. In addition, I can see a time when a platform will probably not be American (e.g. China) and those rules, especially around political expression are all important.
Apple should try and integrate apple pay with all apps on the app store that sell... anything.
Take 1% for tangible items, 5% for digital items hosted outside apple, 30% for most iaps
At least relate it to an actual fact about Apple, instead all you got is platitudes.
The case against google's app store and apple's app store is very different as I see it however. The only trouble I see Apple having in the EU is their policy about competing apps being banned/removed - Apple would have to provide a fairy convincing argument to explain what detriment would be caused by allowing them. On the other side, I don't doubt for a second that Google would highlight their own or certain chosen content ahead of competitors for financial gain, much like they do on search results, shopping results etc.