Judge questions Apple's commitment to App Store payment alternatives
A federal judge has raised concerns about whether Apple has overly complex barriers that could deter the usage of alternative payment methods in iPhone apps.
Judge questions Apple's commitment to App Store payment alternatives
Judge Yvonne Gonzalez Rogers' injunction requires Apple to allow app developers to embed links to alternate payment systems. Its goal is to diminish the company's stronghold over app transactions, where commissions range from 15% to 30%.
The commission structure is a significant revenue stream for Apple and a focal point of contention regarding market fairness and consumer choice. The company's defense pivots on the grounds of security and maintaining a quality standard within its ecosystem, according to to a report from The Associated Press.
During a four-hour hearing, Judge Gonzalez Rogers frequently expressed frustration and skepticism while questioning Matthew Fischer, the Apple executive responsible for the iPhone app store. Her questions conveyed concerns that Apple's compliance efforts were more focused on protecting its profits than facilitating more accessible access to alternative in-app payment options, as her order intended.
She specifically pressed Fischer on whether Apple had intentionally designed its alternative payment methods to be overly complex and confusing for consumers. "Other than to stifle competition, I can see no other answer," Judge Gonzalez Rogers said.
Fischer asserted that Apple is adhering to the court's directive while also aiming to protect iPhone users from malicious entities online and ensuring that the company benefits from its investments in the app store and mobile software.
He explained that a new commission structure has been implemented, ranging from 12% to 27%, with the expected effective rate for digital transactions via alternative payment methods being around 18%. "We are running a business," Fischer remarked, indicating the financial considerations behind Apple's compliance efforts.
The discourse around Apple's App Store policies isn't confined to the US courts. Similar debates are unfolding globally, with Apple facing legal challenges in South Korea and the European Union over similar issues.
In South Korea, new laws have been enacted forcing Apple to open its App Store to alternative payment methods, reflecting a growing global impetus to regulate dominant tech enterprises more stringently.
Despite the legal challenges, many developers and consumers continue to support Apple's existing model, valuing the security and seamless integration it offers. The support underscores the complex balance between fostering an open competitive landscape and maintaining a controlled environment that ensures security and user trust.
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Comments
The judge is wrong. Fischer is right.
Apple has every right to earn profits, exactly as it has been doing. Some Apple developers are simply wanting judges to take away more profits from Apple so those profits can be handed over to themselves. These loudmouthed developers have been working hard over the past few years to convince judges like this one that Apple isn't deserving of all the profits Apple works so hard for. There's nothing that is overly complex or confusing to the consumer. If anything, intelligent consumers who hold AAPL stock are rewarded every quarter when Apple pays them a dividend. The only confusing thing is why so many in seats of power want to shift profits from Apple to a select few loudmouthed developers. It really doesn't benefit the consumer at all in the end.
One thing rings true. If you work hard to build a successful business, a lot of seedy people will target you. Some in seats of power, like this judge, will harm the business in the name of consumer advocacy. In the end, businesses that survive these never-ending attacks must fight with all their might. But the more they fight, the more cost they incur, and the more consumers end up paying in the end.
As if there were something wrong with profit. 🤦♂️
Nothing wrong with profit but this is a fight among the one percent never forget that.....
The people have already chosen what they want Apple but the other one percent making the argument don't care they want a piece of Apple this fight isn't political.
It funny Apples secret is out in the open right in front make a very good product and people will buy the other one percent just can't believe it. How many times have you heard over the years Apple should go for marketshare not quality or Apple should just release a product early just to be first?
That's why the point you were making is a silly one.
It occurs to me there's a near-psychotic disconnect at play.
-Many of us rail against our government telling us what we can do.
-We would not buy a home that a builder is in control of improving, no other contractor permitted without approval.
-Many of us think it intrusive when a neighbor questions what we do in our home.
-Even renters do not have to allow their landlord to walk into their rental without asking first, and no will mean no.
-We wouldn't entertain buying a vehicle whose manufacturer insists that, legally, we cannot replace the seat covers. or install an aftermarket radio they didn't sell to us.
-Who here would shop at a box store that only permitted us to use their own store card for purchases and no other?
-There's been oh-so-many- complaints about Youtube disabling ad-blockers. I could summarize it with "who do they think they are, telling me what I can do? They think they should be paid? I'll show them!"
Yet here we are as smartphone owners not only accepting but embracing restrictions on what we can do with our expensive devices. In effect the companies say "we don't care how much money you paid or hard you worked for it, your phone is still ours."
Does it make sense that so many of us think it's not only fine but wonderful that we have a benevolent dictator in the form of a megacorporation? Take my money please, I am unworthy.
A dictator of any kind is still a dictator.
Either way, why would you want more than one cash register system?
Cash is an alternative that exists to modem based systems. Obviously cash is a problem for digital online stores.
The problem is where there is only one store you can use. Just one.
That is a nut the EU has just cracked. Albeit still pending final approval of Apple's solutions.
The judge raises her point very clearly:
"Other than to stifle competition, I can see no other answer,"
Apple’s response was laughable:
"We are running a business"
That is irrelevant to the issue.
He might as well have said:
"We are running a business and that business is to abuse our dominant position" but of course that would have played into the judge's 'stifle competition' idea.
Apple seems to be on a similar hook to that of the EU.