Coalition for App Fairness profile reveals organizational efforts against Apple
The Coalition for App Fairness is keen not to be viewed as a litigation vehicle for Epic Games, a profile reveals, one that details some of the key figures behind the group's creation and workings.
Apple's intense antitrust scrutiny over its App Store policies were exacerbated by the Epic Games lawsuit, with Apple only getting a reprieve from an order over anti-steering measures on December 8. Despite the stay on the order, Apple continues to be under pressure from critics on the matter.
One of its main opponents is the Coalition for App Fairness, a group formed by Tile, Spotify, Epic, and others wanting to take Apple down a peg or two. In a profile by Protocol, the various members of the Coalition are said to work with a difference of opinion on how the group should operate.
The beginnings of the group involved Tile general counsel Kirsten Daru briefing the House antitrust subcommittee about Apple's pushback on Tile's hardware permissions. Daru was advised by the panel to go public, which led to a field hearing with CEO CJ Prober calling for Congress to make "a level playing field" for developers.
The hearing caused more developers to go public, along with causing more bipartisan pressure on Apple, with Daru encouraging other firms to join the Coalition for App Fairness in September 2020. Since then, the group has grown to 60 members.
"There was one thing that really unified us. We all were completely dependent on the App Store," said Proton public policy and government affairs lead Jurgita Miseviciute. "This was really our gateway to customers, and Apple, with pretty much one click, could really destroy our business."
Epic planned spending "$80K - $100K" on the Coalition's launch, in what was considered an attempt to remove its image as a "not sympathetic" player by working with smaller firms.
The Coalition, however, believes it isn't a litigation vehicle for Epic during its lawsuit. Report sources say the founding members were keen to avoid that appearance, and that its answer to that problem was to lay out its principles on competition and fairness.
Since its founding, the group has occasionally suffered a split in opinion on how the Coalition should proceed. A person familiar with the internal workings said some members wanted to be more aggressive, while others preferred a softer approach.
In terms of how the group operates, it is said to split roles up to specific companies based on their expertise. For example, some used their relations with international governments, while others handled strategy and communications.
Lobbying has become the Coalition's main tactic, working with state representatives on bills to require third-party payment systems to be used by Apple and other big platforms. Lobbyists included one who ran one of Sen. John McCain's reelection campaigns, while others had ties to former Gov. Andrew Cuomo.
So far, states have failed to pass any bills targeting the App Store, but it has also had an impact in other countries. The Coalition worked in November to create a conference in South Korea, one that was attended by the speaker of the Korean National Assembly, months after a bill was passed over app store regulation.
The state-based lobbying is thought to be a weak spot for Apple, with the iPhone maker declining to make significant financial contributions to political parties or candidates. Despite spending some $7 million in 2020 on federal lobbying, it is thought by Washington insiders that Apple would jump to support existing issues it has an affinity with, but would be less likely to organize its own effort.
While report sources believe Apple's lack of political donations is a vulnerability, those within the Coalition still feel Apple is a tough and well-resourced foe. In one example given, Apple reportedly threatened to give up on economic development plans to combat one bill in Georgia, and even managed to get the state attorney general's office on its side.
Read on AppleInsider
Apple's intense antitrust scrutiny over its App Store policies were exacerbated by the Epic Games lawsuit, with Apple only getting a reprieve from an order over anti-steering measures on December 8. Despite the stay on the order, Apple continues to be under pressure from critics on the matter.
One of its main opponents is the Coalition for App Fairness, a group formed by Tile, Spotify, Epic, and others wanting to take Apple down a peg or two. In a profile by Protocol, the various members of the Coalition are said to work with a difference of opinion on how the group should operate.
The beginnings of the group involved Tile general counsel Kirsten Daru briefing the House antitrust subcommittee about Apple's pushback on Tile's hardware permissions. Daru was advised by the panel to go public, which led to a field hearing with CEO CJ Prober calling for Congress to make "a level playing field" for developers.
The hearing caused more developers to go public, along with causing more bipartisan pressure on Apple, with Daru encouraging other firms to join the Coalition for App Fairness in September 2020. Since then, the group has grown to 60 members.
"There was one thing that really unified us. We all were completely dependent on the App Store," said Proton public policy and government affairs lead Jurgita Miseviciute. "This was really our gateway to customers, and Apple, with pretty much one click, could really destroy our business."
Epic planned spending "$80K - $100K" on the Coalition's launch, in what was considered an attempt to remove its image as a "not sympathetic" player by working with smaller firms.
The Coalition, however, believes it isn't a litigation vehicle for Epic during its lawsuit. Report sources say the founding members were keen to avoid that appearance, and that its answer to that problem was to lay out its principles on competition and fairness.
Since its founding, the group has occasionally suffered a split in opinion on how the Coalition should proceed. A person familiar with the internal workings said some members wanted to be more aggressive, while others preferred a softer approach.
In terms of how the group operates, it is said to split roles up to specific companies based on their expertise. For example, some used their relations with international governments, while others handled strategy and communications.
Lobbying has become the Coalition's main tactic, working with state representatives on bills to require third-party payment systems to be used by Apple and other big platforms. Lobbyists included one who ran one of Sen. John McCain's reelection campaigns, while others had ties to former Gov. Andrew Cuomo.
So far, states have failed to pass any bills targeting the App Store, but it has also had an impact in other countries. The Coalition worked in November to create a conference in South Korea, one that was attended by the speaker of the Korean National Assembly, months after a bill was passed over app store regulation.
The state-based lobbying is thought to be a weak spot for Apple, with the iPhone maker declining to make significant financial contributions to political parties or candidates. Despite spending some $7 million in 2020 on federal lobbying, it is thought by Washington insiders that Apple would jump to support existing issues it has an affinity with, but would be less likely to organize its own effort.
While report sources believe Apple's lack of political donations is a vulnerability, those within the Coalition still feel Apple is a tough and well-resourced foe. In one example given, Apple reportedly threatened to give up on economic development plans to combat one bill in Georgia, and even managed to get the state attorney general's office on its side.
Read on AppleInsider
Comments
Short story? Their Twitter account is irrelevant. I can’t imagine their coalition having too much influence (outside of their own delusions).
I get that Epic doesn't like to pay 30% commission to Apple, but Amazon and Netflix didn't want to either and they found a solution that works for them. I'm thinking Epic would be better off negotiating with Google and Apple, not suing them. Make some money while their product is hot. By the time the Epic trial is over, they may not have a product anyone wants. Or more likely they'll get bought out by someone, someone who doesn't want to participate in a multi-year lawsuit.
As for Spotify, I think they have a case. Since Apple competes in music streaming, Spotify should NOT be charged a commission. It gives Apple an unfair advantage. Same with other categories. If the host OS competes, they need to eliminate commissions for competitors in that product category. Probably should do the same for video streaming and audiobooks. Apple's not making money from Netflix and Audible anyway.
The denial suggests that the Ninth Circuit doesn't see the Coalition as a truly independent party in these matters, that it sees the Coalition as just another face that Epic is presenting to support its legal positions.
What about Walmart? Walmart sell dozens of their own brand products, that are often less expensive than the competition. So should all makers of competing products be able to sell their products on Walmart shelves and not compensate Walmart in doing so? This to "level the playing field", so competing product makers can better compete with Walmart, in a Walmart?
You can also say that this is "unfair" to the product makers, but how is this "unfair" to the consumers?
BTW- Apple is probably still making 10"s of millions of dollars a year (if not over $100M) from Netflix subscribers. For sure its not going to be increasing over the years. If you were to do more research, instead of just reading the headlines, Netflix only stopped paying Apple (and Google) a commission with their new subscribers. All the iOS (and Android) subscribers that had Netflix accounts before this change in 2019 and were paying with iTunes, still have the option to pay with iTunes (and Android users with Google Pay) until their subscription lapses. Before Netflix changed their payment policy (in 2019), there were over 300M Netflix users on iOS. Now, not all were paying with iTunes, but enough were to produce over $250M revenue in 2018 for Apple and they all retained the option to pay with iTunes. And Netflix is only paying a 15% commission on all of them by now. Netflix would be stupid to cut off iTunes payment from these older subscribers. With the competition for video streaming services ramping up, paying a 15% commission to retain iOS subscribers make business sense. Every time Netflix raises their subscription price, they lose customers and Wall Street is concern on whether the price increase will make up for the lost subscribers. So NFLX takes a hit until Netflix shows that the loss of subscribers did not significantly affect their earnings. So far, Netflix is not going to gamble that they might lose a significant amount of iOS subscribers if they were to end iTunes (and Google Pay) payment for all subscribers or increase their subscription price when paying with iTunes (or Google Pay).
https://discussions.apple.com/thread/251348140
Spotify is by far the biggest music streaming service. They now have 160M paid subscribers (including free trial) and 200M customers on their free ad supported tier. Apple only have about 65M Apple Music subscribers (including free trials). Spotty been in business since 2006 and is still losing massive amount of money every year. In 2020, the lost amounted to over $500M (and much more depending on who's counting).
https://www.musicbusinessworldwide.com/spotify-lost-the-equivalent-of-2-2m-every-day-in-2020-as-it-spent-over-1bn-on-sales-and-marketing-for-the-first-time/
To me, Spotify shouldn't be too concern about any commission they are paying to Apple (and Google). At least those are paying customers. They should be more concern that Apple do not ever have to raise the price of an Apple Music subscription. Apple can even offer a free year subscription with each iDevice purchase, to increase iDevice sales. Apple can easily handle any Apple Music revenue loss that would probably result in no more than a rounding error on their bottom line. But keeping Apple Music subscription price the same (or non existent) prevents Spotify from raising their subscription price, unless they can justify it to their customers by offering more features than Apple Music. And adding more features will cost Spotify even more money as Apple can easily do the same to keep up. That's the competition than Spotify should be concern about. But the consumers will benefit from that competition, no matter how "unfair" Spotify and other thinks it would be.
Ultimately, I think Steve Jobs will eventually be proven right when he said .... "The subscription model of buying music is bankrupt. I think you could make available the Second Coming in a subscription model, and it might not be successful."
https://www.rollingstone.com/culture/culture-news/steve-jobs-rolling-stones-2003-interview-243284/ ;
People use to say that once paying subscribers reaches critical mass, it will be highly profitable. Well, music streaming subscriptions growth is already beginning to slow significantly and music streaming services are still far from being profitable. At least for the music streaming services. It's been very profitable for the music industry. And increasing subscription cost will slow the growth even more. Meanwhile, the iTunes Music Store is still chugging along and profitable for Apple.
https://newatlas.com/spotify-music-stream-doomed-business-model/53638/?utm_source=Gizmag+Subscribers&utm_campaign=6774ded560-UA-2235360-4&utm_medium=email&utm_term=0_65b67362bd-6774ded560-90842045
How much does Apple have to DO? To make a "platform" for developers? I don't care how much money Apple makes, honestly. If they made double, but KEPT giving 20+ years worth of tools and an open platform, that YES, and I have to get approved FINE and there's limits FINE again, IDGet it...
The only thing I see here is money and money, and then the EU on top saying they want "their cut", charging American companies FEES and FINES to pad their pocket book... Apple/Microsoft/Google/etc Are the United States' A+ tech companies, and the EU and Epic, is gonna just ALTER the TOP 2-3 grossing companies? Because they know better? As if our economy was hurting enough, let's lower the bar so the EU and Epic can get a little extra cash!
Look at PlayStation and Xbox. Do they have a FREE or $99 way I can get a Developer Kit? So that I can put my games on their Systems? (Maybe by now), but I gave up on that a long time ago... being able to be a "poor developer/artist" that could "by himself" afford to develop for SonyPS and MSXbox hell no, so get -F out Epic! and any stupid Coalitions.
I mean look at Web3 and all the Decentralized initiatives if you wanna win or beat somebody down, then WRITE CODE/PROGRAM what you want AND DO IT. This whole taking people to court and spending money on Lawyers and Lobbying, to WIN it's so weak! Pathetic!
And here's the thing that people keep missing when they complain about Apple's monopoly. Apple doesn't have a monopoly! If the iPhone was the only game in town, sure some major monopoly abuse could be argued. But there's Android, which sells a lot more smart phones than Apple. Sure, Android does not sell to the same demographic as the iPhone, but there is no such thing as a 'monopoly on the luxury end of a market'.
Spotify et al complaining about the iPhone App Store is like Tide, whose products are sold in both Walmart and Costco, wanting to generate more profit from higher-spending Costco customers so they petition the government to force Costco to make their terms more favorable to Tide. Including banning Costco from selling its own brand of detergent. That is how preposterous and ridiculous the Coalition for App Fairness is. They don't really want fairness, they want a free and highly profitable ride.
I said that whenever a platform owner is also competing on that platform then they create a conflict of interest. The conclusion would then be that they should be mindful of leveraging that advantage competitively if they don't want to receive regulatory attention. Whether they should be allowed to or not is a matter for the competition authorities, and is probably more specific to the industry and particular actors than a general rule.
Any "unfair" competition here? Or conflict of interest? Should Microsoft be banned from promoting Halo (or any of their games) on an Xbox because it would be "unfair" competition? Should Microsoft be not allowed to offer games on their own Xbox because it might draw regulatory attention? Should Microsoft be banned from offering promotional discount coupons for these games or include them for free, when one buy a new Xbox? What about the Microsoft Store commission they charge to Xbox game developers? Is it "unfair" that Microsoft don't have to pay a commission when Xbox players purchase a game owned by Microsoft? Should a developer of an Xbox game that is similar to Halo, be able to sell their game in the Microsoft Store without having to pay the commission because it would be "a conflict of interest" for Microsoft to charge their commission for a game that competes with Halo and the playing field should be leveled? After all, Microsoft has the same single-branded "monopoly" with their Xbox platform as Apple does with their iOS platform. Or are you going to cop out and say that that's up to the regulators to determine because every platform is different?
Platform owners should not be afraid to compete on their own platforms because it might draw regulatory attention. Regulatory authorities shouldn't even be concern of this type of competition, unless the platform is a monopoly in its relevant market. But they should be afraid to compete on their own platforms because they will draw the attention of companies like Epic, Spotify, Tiles and from organizations like the Coalition of App Fairness, who thinks that they are entitled to use any platforms they want, without having to worry about competition from the platform owners or having to compensate them for making money on their platforms. And will cry like spoiled brats to regulatory authorities if they don't get what they want.