Apple claps back at UK report it claims would force it to 'redesign the iPhone'

AppleInsider

Apple has fired back at competition regulators in the U.K., stating that an assessment of the iPhone maker's market strength was based on "unsubstantiated allegations and hypothetical concerns."

Credit: Marcin Nowak

Back in late 2021, The U.K. Competition and Markets Authority (CMA) released an interim report claiming that Apple and Google maintained a "vice-like grip" on the mobile industry, limiting competition. On Feb. 7, 2022, Apple issued a long and detailed response that has recently been published by the CMA.

The Cupertino tech giant dismissed the CMA's interim report, stating that the regulator tossed the benefits of Apple's ecosystem "without reasoned basis, either ignoring them entirely or dismissing them on the basis of nothing more than speculation."

It also said that the report was based on "unsubstantiated allegations and hypothetical concerns" raised by "self-serving complaints" from a number of rivals, such as Facebook, Spotify, Match, Epic Games, and Microsoft.

Apple goes on to state that those companies are all seeking to "make deep changes to the iPhone for their own commercial gain."

Additionally, the response claims that Apple is "deeply concerned" about proposed regulations. It states that the real-world inventions could force the company to "redesign the iPhone to benefit a handful of powerful developers."

"The [report] appears to assume that its proposed changes would be relatively simple," Apple wrote. "Yet many would require a complete re-architecting of a product that has existed for 15 years, has been constantly improved by Apple's investment in IP and is valued and trusted by millions of consumers."

For example, Apple again takes aim at potential rules that would allow alternative app marketplaces to side-loading on the iPhone, stating that the changes would destroy the iPhone's holistic approach to security. This would "effectively remove the competitive differentiation between Apple and Android," since many users choose Apple over Android for security or privacy reasons.

Apple highlighted the benefits of its own ecosystem, including customer satisfaction, performance, and easy of use. It also touted its commitment to user privacy and innovation while dismissing the Interim Report entirely.

"As a result, the findings in the IR are, in effect, no more than hypotheses about how Apple's ecosystem 'may' have the 'potential' to harm competition," Apple concluded. "Such hypotheses are insufficient to warrant, never mind support, a discussion of potentially radical remedies at this stage."

So far, the CMA's report indicates Apple and Google meets criteria for a Strategic Market Status (SMS) designation under proposals to make digital markets more competitive in nature. If the proposals become law, the Digital Markets Unit will be created within the CMA to assign such a designation.

SMS companies would then face legally enforceable codes of conduct surrounding their behavior, aimed at preventing future exploitation of dominant positions.

The report offers suggestions for the kind of actions Apple and Google could take to remedy the situation, such as making it easier for users to switch devices without losing data, to allow alternative ways to install apps and the use of "web apps," providing more options for in-app purchases other than the App Store's mechanism, and to offer more default app choices.

The CMA is continuing to investigate the App Store and Google Play over competition concerns, and is welcoming responses on its initial filings until February 7, 2022. A final report is anticipated by June 2022.

Read on AppleInsider

rob53

Let's see. Why isn't the UK going after big oil? It stifles competition but governments don't seem to care. Same with automobile dealerships. These are worse because stupid legislatures have put this monopoly into law. Apple makes a great product, has a very good ecosystem and is something people actually are willing to buy. People make the decision on what products to buy. Forcing Apple to degrade their product in the bogus name of competition is simply a money grab by governments. Apple products cost more than others but people buy them so how is Apple stopping competition? This is all a distraction, especially in the US, to not go after the actual criminals in this country and around the world.

foregoneconclusion

Part of Apple's response reminds me of what a federal judge told Yahoo! when they filed a lawsuit in opposition to a government subpoena for metadata: that conjecture about abuses that "might" occur were not relevant. Yahoo! needed to supply evidence of government abuse...and when they couldn't, their lawsuit was dismissed. Apple is saying that the CMA is making the same mistake by citing conjectural comments from developers about abuse that "might" occur, not providing any evidence of actual abuse. 

edited March 2022

mcdave

They seem to be taking the de facto stance that choice is automatically beneficial with actually qualifying the benefit. This is a problem the world over, people crave choice but when you challenge why, the conversation turns irrational pretty quickly.

foregoneconclusion

rob53 said:

Let's see. Why isn't the UK going after big oil? It stifles competition but governments don't seem to care. Same with automobile dealerships. These are worse because stupid legislatures have put this monopoly into law. Apple makes a great product, has a very good ecosystem and is something people actually are willing to buy. People make the decision on what products to buy. Forcing Apple to degrade their product in the bogus name of competition is simply a money grab by governments. Apple products cost more than others but people buy them so how is Apple stopping competition? This is all a distraction, especially in the US, to not go after the actual criminals in this country and around the world.

That's one of the points that Apple hammers home in this response: that the CMA has chosen to completely disregard customer satisfaction as a form of competition.

cesar battistini maziero

Apple is the ecosystem! That is why it's this big of a company with record setting sales.

Don't turn iOS into an Android mess please!

bloggerblog

So to summarize:
Regulators ignored benefits of Apple's ecosystem and made claims based on unsubstantiated allegations raised by Facebook, Spotify, Match, Epic Games, and Microsoft who want to bring Apple down to their level of success through legislation.

bshank

I am confident that the People trust Apple more than their respective government

viclauyyc

Can MS be sue again because most business and industrial software is only available in Windows?

of course not, because it is the customer and the developer’s choice to us Windows. Same for IOS   

ericthehalfbee

It also said that the report was based on "unsubstantiated allegations and hypothetical concerns" raised by "self-serving complaints" from a number of rivals, such as Facebook, Spotify, Match, Epic Games, and Microsoft.

Truer words were never spoken.

shareef777

I don’t understand how allowing external app stores would impact Apple’s secure image. Simply don’t install the external App Store (simple default switch that prevents external app stores from being installed), users will remain secure.

The only logical reason Apple is against this is the loss of income from said external app stores.

roake

shareef777 said:

I don’t understand how allowing external app stores would impact Apple’s secure image. Simply don’t install the external App Store (simple default switch that prevents external app stores from being installed), users will remain secure.

The only logical reason Apple is against this is the loss of income from said external app stores.

Let me help you understand.

Alternate stores will have inferior security standards.  Some online “stores” will be run by individuals and include pirated software.  Malware will be introduced that steals information from users.

Sites will start running stories about all these nefarious activities on iPhones.  People don’t understand the nuances.  They just hear “iPhone… stole my data… malware… runs so slow…”.

Apple has spent a decade and a half creating the finely polished, highly secure, seamless experience that the iPhone is known for.  All the news and rumors above destroy that image because, as I said, people don’t understand or care about the nuances.  They just open wide and swallow it whole.

bloggerblog

shareef777 said:

I don’t understand how allowing external app stores would impact Apple’s secure image. Simply don’t install the external App Store (simple default switch that prevents external app stores from being installed), users will remain secure.

The only logical reason Apple is against this is the loss of income from said external app stores.

Major corporations that don’t agree with Apple’s privacy standards and nutrition labels will start offering more features if they download outside the AppStore. Most users don’t know any better they just want Facebook, Spotify, Epic games. Those corporations will collude on make the AppStore inferior, devaluing the entire ecosystem.

guymanchester

The UK and everyone else for that matter need to leave Apple alone. It’s their eco system and they have built it. People have a choice not to use their products as many android and windows users will attest. Go after a corrupt company that are doing underhanded business where no one has a choice but to use them. 

gatorguy

bloggerblog said:

shareef777 said:

I don’t understand how allowing external app stores would impact Apple’s secure image. Simply don’t install the external App Store (simple default switch that prevents external app stores from being installed), users will remain secure.

The only logical reason Apple is against this is the loss of income from said external app stores.

Major corporations that don’t agree with Apple’s privacy standards and nutrition labels will start offering more features if they download outside the AppStore. Most users don’t know any better they just want Facebook, Spotify, Epic games. Those corporations will collude on make the AppStore inferior, devaluing the entire ecosystem.

Do they collude now to make the Google Play Store inferior? So much handwringing over, in my opinion, an imaginary issue. Apple's objection is primarily economic and not security/privacy.

Perception of course means something. I do understand Apple wanting to avoid any stories that might question the security and safety of their ecosystem, which could potentially affect sales. Blogs love to promote scareware stories with little basis in fact.  But that still doesn't make it an actual security problem. Yup, economic again, and with Apple's whole reason to exist being profit, then of course they'll blame their resistance on everything other than the money which doesn't make for a great excuse in the eyes of many users. But "OMG, Security!!" makes it sound like it's all about protecting us.

Now I may be leaving the impression I endorse third-party stores. I do not.  Apple has a right to restrict their store until the law says they do not. If Google got a do-over I'm not sure they'd still make the same choice regarding side-loading. 

edited March 2022

thedba

gatorguy said:

bloggerblog said:

shareef777 said:

I don’t understand how allowing external app stores would impact Apple’s secure image. Simply don’t install the external App Store (simple default switch that prevents external app stores from being installed), users will remain secure.

The only logical reason Apple is against this is the loss of income from said external app stores.

Major corporations that don’t agree with Apple’s privacy standards and nutrition labels will start offering more features if they download outside the AppStore. Most users don’t know any better they just want Facebook, Spotify, Epic games. Those corporations will collude on make the AppStore inferior, devaluing the entire ecosystem.

Do they collude now to make the Google Play Store inferior? So much handwringing over, in my opinion, an imaginary issue. Apple's objection is primarily economic and not security/privacy.

Perception of course means something. I do understand Apple wanting to avoid any stories that might question the security and safety of their ecosystem, which could potentially affect sales. Blogs love to promote scareware stories with little basis in fact.  But that still doesn't make it an actual security problem. Yup, economic again, and with Apple's whole reason to exist being profit, then of course they'll blame their resistance on everything other than the money which doesn't make for a great excuse in the eyes of many users. But "OMG, Security!!" makes it sound like it's all about protecting us.

Now I may be leaving the impression I endorse third-party stores. I do not.  Apple has a right to restrict their store until the law says they do not. If Google got a do-over I'm not sure they'd still make the same choice regarding side-loading. 

While you are right that Apple’s no. 1 concern is their revenue stream with the App Store, there definitely is a benefit to users to have one place shopping for everything. 
Imagine a world where 
1) You want to play Fortnite, well it’s only available at the Epic App Store for iOS.
2) You want Candy Crush? That’s available only at the Meta App Store for iOS.
3) Outlook, only available at the MS App Store for iOS.

You get the point. Then apps don’t comply anymore with Apple’s privacy policies, or different apps have different policies.

Then how does Apple implement that inside iOS? Allow’s other apps to take control of settings?

While one may argue that Apple’s App Store revenue sharing policies may be stingy or what have you, in the end it’s a handful of billion/trillion dollar companies fighting each other for who gets control of what.

larryjw

Methinks the UK should eat their vegetables instead of electing them. 

slow n easy

I feel like pulling my hair out when I read these type of stories. It is absolutely not in any way Apple and Google’s fault that almost all of the phones on the market are either iOS or Android. The reason why you don’t see Microsoft OS phones or Samsung OS phones is because that is not what the people want. There is no law preventing any company from coming out with their own OS. It is so ridiculous to punish successful companies for giving customers what they want. Before Google, Yahoo was the dominate search engine. Before Facebook, MySpace was the dominate social media platform. If you think you have a better product or service then then release it and if people like it then it will catch on. I tried Google+ and I thought it was a good concept at first but the way they implemented Google+ was really horrible and I really hated it. I’m not at all surprised that it never caught on. The answer is not to hobble successful companies, but to come up with better business models instead.

naiyas

Some of the items mentioned in the article are very much pro-consumer, for instance:

AppleInsider said:

... easier for users to switch devices without losing data ...

Developers have made this much easier than it used to be without the need for regulatory intervention, and it's not as if Apple / Google are blocking this on their platforms. So whilst this is a good observation that needs more work, I'm not sure forcing it on Apple or Google will have any market effect.

AppleInsider said:

... the use of "web apps," ... and to offer more default app choices.

Again, nothing inherently wrong with this statement other than "web apps" already being supported - they were the pre-App Store choice if anyone remembers - and having the ability to change default apps is similar to the precedence set against Microsoft in the late 1990's.

The other items, IMO, are where the crux of the issue is. I already side load on iOS but that's because I'm a developer and I knowingly take on the risk of screwing up my iOS devices, but I don't believe it should be forced on everyone by default, which is exactly what would happen if multiple stores were allowed on iOS. You can argue all you want, but it is plainly obvious that many apps would be shifted from the "one stop shop" iOS App Store to developer only stores, meaning you end up with multiple App Stores depending on the app in question. It WILL fundamentally undermine the entire principle of simplicity for end users and is not in any way pro-consumer.

The other issue is the IAP model. Many of the big developers argue they are forced to pay that 30% "Apple Tax" but offer no meaningful solution to how access to the platform and the platform's development can be funded. The big developers will be in favour of paying huge sums for developer tools / platform access but this will price out the small developers. We can argue that 30% is too much, but what rate is fair? If it was 15% many would say that was also too high. At the end of the day the big developers pay more "monetary wise" to subsidise the little developers - no different to our national tax systems. If you don't like the model, come up with your own as a proposal, but the lack of alternative offerings is the real problem in my view. There is nothing in this report that will resolve that simple truth.

freeassociate2

thedba said:

gatorguy said:

bloggerblog said:

shareef777 said:

I don’t understand how allowing external app stores would impact Apple’s secure image. Simply don’t install the external App Store (simple default switch that prevents external app stores from being installed), users will remain secure.

The only logical reason Apple is against this is the loss of income from said external app stores.

Major corporations that don’t agree with Apple’s privacy standards and nutrition labels will start offering more features if they download outside the AppStore. Most users don’t know any better they just want Facebook, Spotify, Epic games. Those corporations will collude on make the AppStore inferior, devaluing the entire ecosystem.

Do they collude now to make the Google Play Store inferior? So much handwringing over, in my opinion, an imaginary issue. Apple's objection is primarily economic and not security/privacy.

Perception of course means something. I do understand Apple wanting to avoid any stories that might question the security and safety of their ecosystem, which could potentially affect sales. Blogs love to promote scareware stories with little basis in fact.  But that still doesn't make it an actual security problem. Yup, economic again, and with Apple's whole reason to exist being profit, then of course they'll blame their resistance on everything other than the money which doesn't make for a great excuse in the eyes of many users. But "OMG, Security!!" makes it sound like it's all about protecting us.

Now I may be leaving the impression I endorse third-party stores. I do not.  Apple has a right to restrict their store until the law says they do not. If Google got a do-over I'm not sure they'd still make the same choice regarding side-loading. 

While you are right that Apple’s no. 1 concern is their revenue stream with the App Store, there definitely is a benefit to users to have one place shopping for everything. 
Imagine a world where 
1) You want to play Fortnite, well it’s only available at the Epic App Store for iOS.
2) You want Candy Crush? That’s available only at the Meta App Store for iOS.
3) Outlook, only available at the MS App Store for iOS.

You get the point. Then apps don’t comply anymore with Apple’s privacy policies, or different apps have different policies.

Then how does Apple implement that inside iOS? Allow’s other apps to take control of settings?

While one may argue that Apple’s App Store revenue sharing policies may be stingy or what have you, in the end it’s a handful of billion/trillion dollar companies fighting each other for who gets control of what.

(Agreeing with thedba) Which is why you don’t see the Steam Store or the EA Store directly in things like game consoles. They’re all intermediated by the console maker, and all you see is effectively just co-branding.

(Disagreeing with shareef777 and gatorguy)
I’m a bit confused by the logic here. Profit seeking and security (a competitive advantage) aren’t mutually exclusive motivations, and guessing what’s prioritized by Apple’s management lands you right back in speculative territory.

If you truly believe that protecting profit centers is greed when competitors and leech entities (IP trolls, political shake-down scams, etc) are trying to bleed you by a thousand cuts every day … then you should be comfortable giving me some of your profit, right? Your existence unfairly competes with mine. Speculatively, of course. Compensate me.

Or here’s a thought — you should be forced, by law, to share every economic opportunity with me because I provide choice in those instances. But I don’t have to reciprocate — it’s perfectly fine for me to have opportunities you aren’t privy to or are locked out of by restrictive agreements that prevent you from competing with me. We’ll also ignore the fact that every other person on the planet provides ample competition, and narrow the case down to only the facts that benefit me. Also, if I screw up, we’ll make sure I don’t take the all the blame, and most of the gossip focuses around you, because you have more money/friends/talent/dedication and none of my motives should be examined because you’re just greedy.

edited March 2022

beats

shareef777 said:

I don’t understand how allowing external app stores would impact Apple’s secure image. Simply don’t install the external App Store (simple default switch that prevents external app stores from being installed), users will remain secure.

The only logical reason Apple is against this is the loss of income from said external app stores.

Apple isn’t allowed to make money??

gatorguy said:

bloggerblog said:

shareef777 said:

I don’t understand how allowing external app stores would impact Apple’s secure image. Simply don’t install the external App Store (simple default switch that prevents external app stores from being installed), users will remain secure.

The only logical reason Apple is against this is the loss of income from said external app stores.

Major corporations that don’t agree with Apple’s privacy standards and nutrition labels will start offering more features if they download outside the AppStore. Most users don’t know any better they just want Facebook, Spotify, Epic games. Those corporations will collude on make the AppStore inferior, devaluing the entire ecosystem.

Do they collude now to make the Google Play Store inferior? So much handwringing over, in my opinion, an imaginary issue. Apple's objection is primarily economic and not security/privacy.

Perception of course means something. I do understand Apple wanting to avoid any stories that might question the security and safety of their ecosystem, which could potentially affect sales. Blogs love to promote scareware stories with little basis in fact.  But that still doesn't make it an actual security problem. Yup, economic again, and with Apple's whole reason to exist being profit, then of course they'll blame their resistance on everything other than the money which doesn't make for a great excuse in the eyes of many users. But "OMG, Security!!" makes it sound like it's all about protecting us.

Now I may be leaving the impression I endorse third-party stores. I do not.  Apple has a right to restrict their store until the law says they do not. If Google got a do-over I'm not sure they'd still make the same choice regarding side-loading. 

Apple isn’t allowed to make money?