Bill targeting App Store will harm consumers & app ecosystems, claims think tank
The "Open App Markets Act" could cause severe trauma to the App Store ecosystem, a think tank warns, with the proposed legislation potentially damaging the value of iOS and Android as platforms for consumers.
Lawmakers in the U.S. House of Representatives and the Senate are attempting to curb the market power of digital storefronts such as Apple's App Store and the Google Play Store. A pair of bills were introduced in April titled the "Open App Markets Act," which included a number of measures that could weaken the tech giants' market control.
These include a ban on app stores requiring developers to use their payment systems, another ban on app stores punishing apps for offering different pricing structures via other platforms, and to ban app stores from using non-public information to compete with third parties.
In a blog post for the American Enterprise Institute, a public policy think tank, non-resident fellow Mark Jamison offers that the legislation is an example of lawmakers "mistaking great products for market power."
Jamison is a director and Gunter Professor of the Public Utility Research Center at the University of Florida's Warrington College of Business. He has also worked with different branches of government, including as a member of an FCC transition team, and a special adviser to the chair of the governor of Florida's Internet task force, among other areas.
The bill sponsors believe Apple and Google are "wielding incredible power" and are denying "startup tech companies a fighting chance" by adopting practices that are "a direct afront to a free and fair marketplace."
According to a working paper Jamison contributed to that looked at how startups chose to use iOS, Android, both, or neither platform, most firms analyzed viewed iOS and Android as "clear substitutes or at least complements" to each other. This implied Apple and Google are in competition for the business of the startups.
Of those who had a clear preference for iOS or Android, they were apparently indifferent on using mobile platforms at all, "also implying no market power," says Jamison.
The working paper also determined that the app economy is "vibrant and robust, in direct contradiction with the senators' claims," with U.S. startup businesses accelerating rapidly after the introduction of the iPhone.
It was also determined the number of app publishers receiving more than $2 million in 2020 was up 25%, while the use of finance-related apps by Americans increased 90%.
"Market power is the ability to raise prices and suppress output without inviting more competition. Apple and Google appear to be encouraging growth, not suppressing it," reasons Jamison. "And their fees appear on par with platforms."
However, Jamison believes the bills would "ironically" damage the value consumers gain from the platforms, because they will "run counter to what consumers want."
One example points out that Google already allows app store sideloading, while Apple does not, with consumers and some developers apparently preferring those choice.
"Google caters to techies, while Apple serves people who love their slick, easy-to-use devices," he adds. "The act would make iOS more like Android and, in doing so, would damage the people-oriented technology leader that Steve Jobs created."
Jamison goes on to refer to the Thomas Sowell "anointed" illusion, in that where the so-called anointed see a system they think is wrong in some way, they "conclude that they should impose their vision on others, not realizing their lack of knowledge will make things worse."
The bills arrive at a time when the App Store faces intense scrutiny. Antitrust bills in the House are intended to reduce the amount of power tech giants wield, following a months-long investigation into market power.
Apple is also waiting for a decision to be made in its legal battle with Epic Games, over its App Store guidelines and commission tiers.
Read on AppleInsider
Lawmakers in the U.S. House of Representatives and the Senate are attempting to curb the market power of digital storefronts such as Apple's App Store and the Google Play Store. A pair of bills were introduced in April titled the "Open App Markets Act," which included a number of measures that could weaken the tech giants' market control.
These include a ban on app stores requiring developers to use their payment systems, another ban on app stores punishing apps for offering different pricing structures via other platforms, and to ban app stores from using non-public information to compete with third parties.
In a blog post for the American Enterprise Institute, a public policy think tank, non-resident fellow Mark Jamison offers that the legislation is an example of lawmakers "mistaking great products for market power."
Jamison is a director and Gunter Professor of the Public Utility Research Center at the University of Florida's Warrington College of Business. He has also worked with different branches of government, including as a member of an FCC transition team, and a special adviser to the chair of the governor of Florida's Internet task force, among other areas.
The bill sponsors believe Apple and Google are "wielding incredible power" and are denying "startup tech companies a fighting chance" by adopting practices that are "a direct afront to a free and fair marketplace."
According to a working paper Jamison contributed to that looked at how startups chose to use iOS, Android, both, or neither platform, most firms analyzed viewed iOS and Android as "clear substitutes or at least complements" to each other. This implied Apple and Google are in competition for the business of the startups.
Of those who had a clear preference for iOS or Android, they were apparently indifferent on using mobile platforms at all, "also implying no market power," says Jamison.
The working paper also determined that the app economy is "vibrant and robust, in direct contradiction with the senators' claims," with U.S. startup businesses accelerating rapidly after the introduction of the iPhone.
It was also determined the number of app publishers receiving more than $2 million in 2020 was up 25%, while the use of finance-related apps by Americans increased 90%.
"Market power is the ability to raise prices and suppress output without inviting more competition. Apple and Google appear to be encouraging growth, not suppressing it," reasons Jamison. "And their fees appear on par with platforms."
However, Jamison believes the bills would "ironically" damage the value consumers gain from the platforms, because they will "run counter to what consumers want."
One example points out that Google already allows app store sideloading, while Apple does not, with consumers and some developers apparently preferring those choice.
"Google caters to techies, while Apple serves people who love their slick, easy-to-use devices," he adds. "The act would make iOS more like Android and, in doing so, would damage the people-oriented technology leader that Steve Jobs created."
Jamison goes on to refer to the Thomas Sowell "anointed" illusion, in that where the so-called anointed see a system they think is wrong in some way, they "conclude that they should impose their vision on others, not realizing their lack of knowledge will make things worse."
The bills arrive at a time when the App Store faces intense scrutiny. Antitrust bills in the House are intended to reduce the amount of power tech giants wield, following a months-long investigation into market power.
Apple is also waiting for a decision to be made in its legal battle with Epic Games, over its App Store guidelines and commission tiers.
Read on AppleInsider
Comments
Do I agree with forcing companies to allow other payment methods inside of their App Store? Absolutely not.
Do I think developers should be able to publish software outside of the App Store that Apple deems unsuitable for it? Absolutely, yes!
Customers having a side-channel will allow developers to publish software that Apple doesn't want on the App Store, it will allow apps like emulators, game streaming, Kodi, "adult" apps, and any software that Apple may decide they don't want available to iOS users in the future.
Them blocking game streaming is anti-trust and I don't know how they haven't been sued for it.
Them blocking emulators serves no purpose for the consumer other than to encourage them to buy new games on the App Store, possibly ports of the old games they already own copies of.
https://www.govtrack.us/congress/bills/117/s2710/comment
I'm personally for this bill mostly... I don't like the part about forcing store owners to allow alternative payment methods, but I absolutely agree on the aspect of them being required to allow app distribution outside of their store.
Google and Apple are both guilty here, Google blocks device manufacturers from bundling stores that weren't made by the manufacturer, Apple has the power to block any app from the majority of the US mobile market and have abused this power recently with game streaming and most recently by removing iDOS2 from the App Store after having been available since 2014.
On the Apple side, requiring a side channel for users to install software would take care of those issues.
On the Google side, they absolutely shouldn't be able to prevent device manufacturers from making deals with other companies to include their software inside the OS image.
The difference is you have that choice with retail, but with iOS your only choice is the App Store.
Native apps are the only option for most things that are blocked from the App Store... even game streaming suffers as a web app because they can't use their proprietary codec optimized for low latency and are instead forced to use whatever codec Apple feels like supporting...
Web apps quite frankly suck for anything beyond the absolute simplest things.
You wouldn't be able to write an emulator that even comes close to the performance of native...
There's also things like Kodi that require access to local devices on your network in order to access your media to actually play, web apps don't give you anything that could be used for that.
Make a survey —aka the one on broadband or better—.
1- Telcos will send all users a lint to a site —they surely know all their users!—.
2- In the site, your cellphone number will be used ONLY to check that you judy vote once and to know your cellphones’ OS/model.
3- Based on the OS option, you'll be asked about things like app store, privacy, etc. —if you use Android you won't be able to answer on iOS' questions and viceversa—.
4- The survey can also be used to ask customers about the tracking ad systems —Facebooks, Instagrams, etc.—
And we will know what customers… who put their money on the device… want.
Probably all apps will continue to be available from Apple's App Store – so the customer can choose to trust only Apple.
Choice is a good thing – Apple has just to make sure that apps from all sources run in the sandboxed environment for security.
Another scenario, closer to home: our family has 3 iPhones under the same Apple ID. We're all adults, but some of us (i.e. my daughter) are a lot more 'relaxed' about security than I am. What if she ends up side-loading a malicious app - and it ends up siphoning off private information from our shared iCloud account?
The fact is that many of us bought iPhones in the belief (whether it's a wrong belief is an entirely separate discussion) that iPhones were more secure because with respect to applications, they only had one entry point. One could argue that Apple designed its entire ecosystem with that single "weak point" assumed. If, suddenly, unchecked applications ran in this ecosystem, who knows what the security implications would be. Apple's ecosystem certainly would no longer provide the security many of us depended on.
To counter that, there were computer stores which partially catered to the Mac - though to a small degree since PCs were such a larger market - where you could find apps in physical boxes but no one there could tell you much about them, and magazines you could go to who would do more comprehensive comparisons of products in a category ticking off features and quality against price.
At the stores you had bigger software publishers and always suspected that the store clerks pushing a product were doing it because their profit margins were higher and the software publishers were rewarding the sales staff. Smaller indie stuff you could only count on finding out from the magazines and their product category comparisons, though you might find a box with an old version of the software on a store shelf.
Those magazines either no longer exist, or stopped doing comprehensive comparisons years ago as their profit margins and circulation dwindled.
I remember when I could go to a Mac magazine and read a comprehensive comparison of printers and pick the one which satisfied my feature list and budget - now all you get are reviews of single printers spread willy nilly through dozens of articles. It's amazing to me how much time I had to take to select a replacement for my Brother MFC-L8850CDW multifunction printer whose Work Center software had been obsoleted by 64-bit-only, and it was only through my own research that I was able to find the HP M479fdw to replace it with something like the same feature set.
Say what you will, but the app stores have largely replaced the information infrastructure which existed in the past, and Apple does a relatively good job of keeping vendor loaded reviews under control - unlike say the Amazon store where Chinese counterfeit products supplant original products and reviews are loaded with fraudulent recommendations.
Do I want the kind of wild wild west you seem to be advocating - but in actuality may not know what you're asking for?
Nyet.
Be careful what you ask for: you just may get it.
The media and Twitter would not make a distinction between App Store apps and side loaded apps.
If the government passes a law to allow other stores, that mean Apple will have to reduce their security or provide the credential to other stores load software on the phone. Once this happen than in theory the government could also gain access, either going to one of those stores or creating their own store.
Apple’s platform. Apple’s devices. There’s no reason they should be restricted from producing products they want to make. People who have a problem with what features are available and how those features work, have a CHOICE to use a different product. There are many alternatives to iPhones and iPads.
There is a time when it becomes necessary to monitor a company’s behavior… that’s when they have a monopoly and have the leverage to control markets and coerce competitors.
The real concern here has NOTHING to do with consumers - IT IS ALL ABOUT money. Apple is making a lot of money and a lot of people have an issue with that. They want their cut.