Apple and Google abuse market dominance, says Japan antitrust regulator

Posted:
in iOS edited February 2023
A Japanese Fair Trade Commission report stops short of directly ordering that Apple must allow a third-party App Store, but its investigation clearly concludes that one is necessary.

Apple Store in Japan
Apple Store in Japan


Apple and Google have been under investigation by the Japanese Fair Trade Commission (JFTC) since October 2021, chiefly regarding their app store dominance. The regulator has now published its findings, which are critical of both firms' "abuse of a superior bargaining position."

The JFTC says that the current business models of both companies is a "problem under the AMA," the country's Antimonopoly Act. This is the same act that led to Apple being accused of violations in its allegedly "anti-consumer" dealings with local cell carriers in 2018.

In a detailed examination of Apple's App Store and the Google Play Store, the JFTC makes many recommendations for changes. It does not explicitly say that the companies must allow alternative app stores, yet complying with its findings would require exactly that.

In a section concerning the "prevention of self-preferencing in the app market," the JFTC report says that an "equal footing regarding App store management" must be ensured.

"[This includes making] it possible to use or select a system other than Google's/Apple's in-app payment system and/or Google's/Apple's in-app payment system," says the report, "and separately setting the commission of using the in-app payment system and the commission of using app store."

Further, "it is desirable for Google and Apple" to continue "to bring about innovation without hindering the creation of new products or services and the construction of new ecosystems centered on such products or services by developers other than Google and Apple."

The report also says that Apple and Google must not take advantage of features that are not also available to developers.

"[They must permit] access to the mobile OS functions at the same timing, scope and level as Google's/Apple's apps, products and services," it continues, "so that other developers' apps, products and services can be interoperable with the mobile OS."

Japan's regulator does allow that this may not always be possible, however. It adds "except when justifications are recognized from the viewpoint of security assurance and privacy protection."

Thursday's report is not an enforcement action. The report must be further evaluated and discussed by the Japan government before action is taken. A timetable for that review and action isn't clear.

Apple has not yet commented on the report from Japan's Fair Trade Commission.

Read on AppleInsider

Comments

  • Reply 1 of 20
    rob53rob53 Posts: 3,269member
    Market dominance. All this means is that people actually want to buy a product from this company. Fair Trade? That's a joke. It simply means companies and countries who can't make things want a piece of the pie from companies and countries that can. Sounds a bit like socialism doesn't it. Of course none of these capitalistic countries would admit they need help surviving so they try forcing a great company to let a weak country and companies get something for nothing. 
    foadmike1darelrexwatto_cobra
  • Reply 2 of 20
    thrangthrang Posts: 1,024member
    "Japan's regulator does allow that this may not always be possible, however. It adds "except when justifications are recognized from the viewpoint of security assurance and privacy protection."

    Well, duh, this is sort of the paramount point and the reason this is a really bad idea.

    To those who say, "well, YOU don't have to use a third party app store, so what are you worried about?", you further miss the point. We share significant amounts of content between friends and family. So my contact information, shared photos, contents of mail and text messages, and more, reside on my wife's, kids, and friends phones (all iOS) There is a greater level of trust to do so given the intrinsic security of the shared ecosystem. So it "someone else" starts using unvetted apps from a third party app store which does a lot of harvesting, you are indirectly harmed even if you yourself do not use a third party store. 

    For those that do, how does Apple address the aforementioned "security assurance and privacy protection" by allowing unvetted apps on the store? Do they allow unfettered access to all API's/tools/data? Do they cut off access to Contacts, Wallet, Messages, Mail, Photos, Files, and more to try and protect the ecosystem? What becomes exploitable by allowing a "front door" into iOS for third party app stores?

    I don't think many people think about the ramifications of this, and more fundamentally, this is product and feature of the Apple's / Google's businesses. To what level do we want governments, including unelected regulators, putting their hands on the wheels of free enterprise, innovation, investment, customer relations, and success? It is a very dangerous manner of thinking. 

    And where is there a vast majority of users even complaining about this? These is no cacophony, not barely a whimper... Most people are fully aware of the ecosystem, enjoy it , and feel well served and protected by it. 

    Let others innovate a better solution/ecosytem in the open market. 


    edited February 2023 foadmike1h2pFileMakerFellerdarelrexwatto_cobra
  • Reply 3 of 20
    danoxdanox Posts: 3,098member
    rob53 said:
    Market dominance. All this means is that people actually want to buy a product from this company. Fair Trade? That's a joke. It simply means companies and countries who can't make things want a piece of the pie from companies and countries that can. Sounds a bit like socialism doesn't it. Of course none of these capitalistic countries would admit they need help surviving so they try forcing a great company to let a weak country and companies get something for nothing. 
    Huh? What does socialism have to do with it? The one percent club Google, Firefox, Facebook, Epic, and Spotify are licking their chops and being able to use their own browser and AppStore’s on a Mac, iPhone and iPad by government decree.

    The Apple ecosystem built from the ground up by Apple used for free by their competition with no real oversight by Apple, with equal access given to the OS and the hardware. It’s called the 1% capitalistic, lobbyist reshuffle when things don’t go your way in the marketplace.
    edited February 2023 watto_cobra
  • Reply 4 of 20
    danoxdanox Posts: 3,098member
    thrang said:
    "Japan's regulator does allow that this may not always be possible, however. It adds "except when justifications are recognized from the viewpoint of security assurance and privacy protection."

    Well, duh, this is sort of the paramount point and the reason this is a really bad idea.

    To those who say, "well, YOU don't have to use a third party app store, so what are you worried about?", you further miss the point. We share significant amounts of content between friends and family. So my contact information, shared photos, contents of mail and text messages, and more, reside on my wife's, kids, and friends phones (all iOS) There is a greater level of trust to do so given the intrinsic security of the shared ecosystem. So it "someone else" starts using unvetted apps from a third party app store which does a lot of harvesting, you are indirectly harmed even if you yourself do not use a third party store. 

    For those that do, how does Apple address the aforementioned "security assurance and privacy protection" by allowing unvetted apps on the store? Do they allow unfettered access to all API's/tools/data? Do they cut off access to Contacts, Wallet, Messages, Mail, Photos, Files, and more to try and protect the ecosystem? What becomes exploitable by allowing a "front door" into iOS for third party app stores?

    I don't think many people think about the ramifications of this, and more fundamentally, this is product and feature of the Apple's / Google's businesses. To what level do we want governments, including unelected regulators, putting their hands on the wheels of free enterprise, innovation, investment, customer relations, and success? It is a very dangerous manner of thinking. 

    And where is there a vast majority of users even complaining about this? These is no cacophony, not barely a whimper... Most people are fully aware of the ecosystem, enjoy it , and feel well served and protected by it. 

    Let others innovate a better solution/ecosytem in the open market. 



    What lobbying has Apple done other than leave us alone? Google, Firefox, Facebook, Epic, Microsoft, Adobe, and Spotify and other big one percent capitalistic, lobbyist, infested companies, are squealing to various governments around the world we want a re-shuffle. 

    Apple is too big and too profitable with their vertical business structure, however, Apple isn’t marketshare leader in any area in modern computing nor are they the marketshare leader in smartphones, computers Internet, browsers, or messaging systems not even close.

    Apple is unique however, in that are last man standing in modern computing with a vertical structure in that they make their own OS and they make their own hardware to go with it, the rest of the industry is built differently, and they politely through government lobbying would like Apple to drop down to that same level of mediocrity.
    edited February 2023 h2pwatto_cobra
  • Reply 5 of 20
    The main issue that every government is running into is whether or not the OS is considered to be private intellectual property or some form of quasi-public utility. They seem to be leaning towards the latter and it's becoming fairly confusing as to what that's supposed to mean in terms of control. If app developers have different priorities for what they want to see in an OS does that mean that it's anticompetitive for the OS owner not to support them? That's essentially what it's starting to sound like. Companies like Epic, Spotify and Microsoft all complained about features/functions that they personally preferred to see in iOS and Apple wasn't giving them exactly what they wanted. 
    FileMakerFellerwatto_cobra
  • Reply 6 of 20
    Maybe force Sony Playstation and Xbox to allow sideloading as well?
    pulseimagesStrangeDayswatto_cobra
  • Reply 7 of 20
    If Apple is forced to crack open its tight and secure system, concessions must be made to Apple, such as:

    1) legal protections against being sued or such like for problems generated by third parties - the lawsuits will be automatically directed to the third parties. 
    2) the third parties pay an extra amount to use Apple’s servers and bandwidth
    3) the third party software is not installed by default from the factory
    4) Third parties must provide Apple approved tech support for issues arising in the OS, the apps, or the store itself due to third party store usage. 
    5) third parties must maintain an Apple App Store listing in addition to their own store with a link to the Apple App Store product, regardless if the third party one is cheaper, giving the obvious option to use an Apple approved version of the app. If Apple is forced to provide a link to their store, this is only fair and equitable. 
    5) third party stores must abide by Apple security and privacy restrictions and guidelines. 

    Just giving free reign to competitors, allowing them to run amok all over someone else’s success cartel Blanche is the antithesis of reward for success and crushes motivation to build great things. Who wants to craft the perfect thing if anyone and everyone is allowed to crap all over it when you’ve finished the masterpiece? 

    If these countries think it’s “fair” to allow everyone else to profit off Apple’s hard work, the it’s “fair” for them to do their share in cleaning up their messes and protecting Apple from others’ failures. 

    The only people profiting from this move are third party grifters. Both the the company that actually gave blood, sweat and tears to build this thing and Apple’s customers suffer. You have a lot of people with Macs who get tricked into downloading stuff onto their Mac that ruins everything. And they want that on iPhone too? Sheesh. The sheer intellectual and common sense limitations of people who are supposed to be smart and watching out for citizens is Staggering. 
    edited February 2023 h2pFileMakerFellerdanoxwatto_cobra
  • Reply 8 of 20

    Makes you appreciate freedom in America when other countries tell the private sector how to micromanage their businesses. Oh wait…
    edited February 2023 h2pFileMakerFellerwatto_cobra
  • Reply 9 of 20
    JinTechJinTech Posts: 1,042member
    So, soon enough will we be forced to use a platform and product we do not choose to use? I buy an iPhone because I know full well what I am getting, and I am happy with that choice. If I wanted something more convoluted, unsecured, bloated, etc then I would go with one of the many Android products. Most of those who buy Apple products are also fully aware of what they are getting and that's why they choose this platform.
    danoxwatto_cobra
  • Reply 10 of 20
    pwrmac said:
    Maybe force Sony Playstation and Xbox to allow sideloading as well?
    Exactly! And Nintendo. And you know that won’t happen any time soon!
    StrangeDaysdanoxwatto_cobra
  • Reply 11 of 20
    mjtomlinmjtomlin Posts: 2,681member
    Apple could still open the market while keeping the platform "closed". They could allow 3rd party app stores and even allow side loading while still maintaining control over what apps run on their devices. Any app that a developer wanted to distribute (from anywhere) could still have to be submitted, vetted and signed by Apple.

    And if they wanted to make up revenue from lost App Store sales, they could start jacking up developer account fees and even start charging for the developer tools.
    danoxwatto_cobra
  • Reply 12 of 20
    Will the CEOs be required to commit seppuku if the companies are found guilty in order to preserve their honor?
    watto_cobra
  • Reply 13 of 20
    JinTechJinTech Posts: 1,042member
    mjtomlin said:
    And if they wanted to make up revenue from lost App Store sales, they could start jacking up developer account fees and even start charging for the developer tools.
    How would jacking up fees and charging for developer tools retain developers from their platform over a free platform?

    Apple should be able to charge these third party stores “rent” for being on iOS. But then, I’m sure there would be an outcry that Apple is charging. 

    How dare Apple charge a third party store being on a platform that Apple made! /s
    watto_cobra
  • Reply 14 of 20
    KTRKTR Posts: 280member
    I hope it works in apples favor and it makes them a bigger company to the point where people say something like the government dai you a favor.  Apple response is .”  Well we didn’t ask for it”, then the government does about fave and wants to re negotiate lol.
    watto_cobra
  • Reply 15 of 20
    The report also says that Apple and Google must not take advantage of features that are not also available to developers.

    "[They must permit] access to the mobile OS functions at the same timing, scope and level as Google's/Apple's apps, products and services," it continues, "so that other developers' apps, products and services can be interoperable with the mobile OS."

    Japan's regulator does allow that this may not always be possible, however. It adds "except when justifications are recognized from the viewpoint of security assurance and privacy protection."
    That's... a tall order. Apple's current process involves getting things working to a certain minimum standard behind the scenes; then, with real-world feedback, adjusting the APIs and documenting what is considered to be the public release once they're sure they've plugged any egregious security holes or mitigated any performance issues (they can be wrong about these, but that's their intention).

    Maybe Apple can just argue that they have to delay APIs' promotion to public status because the APIs haven't been through a full security audit yet.

    Mind you, there have been several developers complaining about the state of Apple's documentation, so maybe it wouldn't be a bad thing to have some government prodding in this area.
  • Reply 16 of 20
    thrang said:
    To those who say, "well, YOU don't have to use a third party app store, so what are you worried about?", you further miss the point. We share significant amounts of content between friends and family. So my contact information, shared photos, contents of mail and text messages, and more, reside on my wife's, kids, and friends phones (all iOS) There is a greater level of trust to do so given the intrinsic security of the shared ecosystem. So it "someone else" starts using unvetted apps from a third party app store which does a lot of harvesting, you are indirectly harmed even if you yourself do not use a third party store.

    Totally agree. Also: What happens when most of your favorite apps (and good new apps) go third-party-store-only because they have to compete with everyone else who's dodging Apple's markup? What happens when your school/university/employer says, "you must obtain this app from a third-party store or sideloading; it's not available any other way." What happens is that all users have to use third-party stores and sideloading whether they like it or not.

    Apple's current system just doesn't allow any of that. And it's been going great for fifteen years. Just like Target's been going great with a strictly curated selection of merchandise, Target-only payment registers, and Target's fat markup (bigger than Apple's, that's for sure). How many Target customers are clamoring for it to be all screwed up by antitrust regulators? The only people who would ever call for that are people who don't like Target, don't even shop there, and want to see it ruined for the people who do.
    edited February 2023 StrangeDayswatto_cobra
  • Reply 17 of 20
    davidwdavidw Posts: 2,081member
    >"[This includes making] it possible to use or select a system other than Google's/Apple's in-app payment system and/or Google's/Apple's in-app payment system," says the report, "and separately setting the commission of using the in-app payment system and the commission of using app store."<

     Maybe the meaning of "commission" loses some of its meaning when translated to Japanese. But neither Apple or Google charges a "commission" for using their app stores. The "commission" is charged on the revenue developers derive from using Apple and Google IP. Which would be the iOS platform and Android platform. Over 90% of the apps in either app stores are free and those app developers are not charged a "commission", even though they are using Apple and Google app stores to distribute their free apps. It wouldn't matter if developers used third party app stores to make money, they would still be using Apple and Google IP. And Apple and Google should have the right to charge for using their IP to make money, even if the app uses a third party app store.

     Don't Japan and other countries (including the EU) that are looking into this "commission" matter, find it ironic that the biggest crybabies complaining about the "commission" (and only on Apple and Google platforms), are the ones that are making millions of dollars a year and had made 100's of millions over the years, (this after paying the commission) with their apps in the app stores? Where are the consumer uprising in any of these countries, protesting the higher cost of apps because the developers have to pass on the "commission" to the consumers? Where are the consumes complaining about having to purchase all the apps they need from one app store, rather than having the privilege to search for them across a half a dozen different app stores, with each of them requiring the customers credit detail for payment?

    Over 95% of total app store revenue (for both Apple and Google) are generated by the biggest most profitable 2% of developers. Over 90% of developers bringing in revenue from the app stores, are paying only a 15% commission (which includes processing of payment) because they generate less than $1M in app revenue/a year. Just exactly who do these governments think will benefit the most, with a lower "commission" or none at all? Do these governments actually think these multi-billion dollar companies with money making apps in the app stores, are looking after the small developer? Or the consumers?

     Some of these links are a few years old, but things haven't really change that much over the years. If anything, the numbers has gotten more skewed toward the few big developers owning a bigger piece of the pie.

     https://www.pocketgamer.biz/comment-and-opinion/79396/linda-ouyang-overcoming-the-challenges-facing-todays-small-independent-mobile-game-developers/

    https://sensortower.com/blog/app-store-one-percent

    https://www.cnbc.com/2021/03/16/google-apple-giving-up-less-than-5percent-of-revenue-from-apps-with-pay-changes-estimate.html

    https://www.digitalinformationworld.com/2020/12/98-percent-of-apple-app-store-games.html
    edited February 2023 danoxwatto_cobra
  • Reply 18 of 20
    danoxdanox Posts: 3,098member
    JinTech said:
    mjtomlin said:
    And if they wanted to make up revenue from lost App Store sales, they could start jacking up developer account fees and even start charging for the developer tools.
    How would jacking up fees and charging for developer tools retain developers from their platform over a free platform?

    Apple should be able to charge these third party stores “rent” for being on iOS. But then, I’m sure there would be an outcry that Apple is charging. 

    How dare Apple charge a third party store being on a platform that Apple made! /s
    We are going back in time to an era where you had to pay a significant amount of money for the development tools involved in creating a program for a particular piece of hardware in addition to a nice big fat fee for just having access to loading your program on to a particular device. Due to government interference at the insistence (lobbying), of the one percent (large) developers, access will be limited to a few over time.
    watto_cobra
  • Reply 19 of 20
    danoxdanox Posts: 3,098member
    darelrex said:
    thrang said:
    To those who say, "well, YOU don't have to use a third party app store, so what are you worried about?", you further miss the point. We share significant amounts of content between friends and family. So my contact information, shared photos, contents of mail and text messages, and more, reside on my wife's, kids, and friends phones (all iOS) There is a greater level of trust to do so given the intrinsic security of the shared ecosystem. So it "someone else" starts using unvetted apps from a third party app store which does a lot of harvesting, you are indirectly harmed even if you yourself do not use a third party store.

    Totally agree. Also: What happens when most of your favorite apps (and good new apps) go third-party-store-only because they have to compete with everyone else who's dodging Apple's markup? What happens when your school/university/employer says, "you must obtain this app from a third-party store or sideloading; it's not available any other way." What happens is that all users have to use third-party stores and sideloading whether they like it or not.

    Apple's current system just doesn't allow any of that. And it's been going great for fifteen years. Just like Target's been going great with a strictly curated selection of merchandise, Target-only payment registers, and Target's fat markup (bigger than Apple's, that's for sure). How many Target customers are clamoring for it to be all screwed up by antitrust regulators? The only people who would ever call for that are people who don't like Target, don't even shop there, and want to see it ruined for the people who do.
    All governments around the world are happiest when the upper 1% are successful or happy it doesn’t matter how bad it is for the other 99%, success is strictly measured on how the few are doing, that is the measure the bar of success (see Brexit), nothing else seems to matter.

    One thing I’ve noticed over time since the creation of the Apple Store, is that many of the larger developers hate it when they’re sitting side-by-side with programs designed by smaller companies and they don’t get the little party favors that they are used to getting, it just eats them up inside and that is definitely one of the things driving this movement.
    watto_cobramuthuk_vanalingamdarelrex
  • Reply 20 of 20
    JinTechJinTech Posts: 1,042member
    danox said:
    JinTech said:
    mjtomlin said:
    And if they wanted to make up revenue from lost App Store sales, they could start jacking up developer account fees and even start charging for the developer tools.
    How would jacking up fees and charging for developer tools retain developers from their platform over a free platform?

    Apple should be able to charge these third party stores “rent” for being on iOS. But then, I’m sure there would be an outcry that Apple is charging. 

    How dare Apple charge a third party store being on a platform that Apple made! /s
    We are going back in time to an era where you had to pay a significant amount of money for the development tools involved in creating a program for a particular piece of hardware in addition to a nice big fat fee for just having access to loading your program on to a particular device. Due to government interference at the insistence (lobbying), of the one percent (large) developers, access will be limited to a few over time.
    How 1980’s thinking of you. Fortunately Apple currently is against this. Hopefully they will fight this with exactly that kind of methodology. 
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