Apple insists App Store 'not a monopoly,' expects to win in court
Apple held firm on Monday after losing a U.S. Supreme Court ruling over the App Store, maintaining that it's "not a monopoly" despite no third-party sources for iOS apps.
"Today's decision means plaintiffs can proceed with their case in District court," the iPhone maker told CNBC. "We're confident we will prevail when the facts are presented and that the App Store is not a monopoly by any metric."
Earlier today the Supreme Court ruled 5 to 4 in favor of permitting a lower-court lawsuit, Apple v. Pepper, to proceed. The vote was split, but not along party lines. Conservative Justice Brett Kavanaugh agreed with liberal justices that the case should go forward.
"Apple's line-drawing does not make a lot of sense, other than as a way to gerrymander Apple out of this and similar lawsuits," Kavanaugh wrote in his majority opinion.
Beginning in 2011, the plaintiffs have argued that app prices are artificially inflated by the fact Apple will only allow sales through the App Store -- where it takes 15 to 30% from every transaction. Some developers have indeed raised App Store prices higher than elsewhere, such as Spotify, which recently filed a complaint with the European Commission over the same issue.
Apple argues that developers are the ones who set prices, and that it's not in violation of any antitrust laws. It moreover claims that by paying its commission, developers are "buying a package of services which include distribution and software and intellectual property and testing."
"We're proud to have created the safest, most secure and trusted platform for customers and a great business opportunity for all developers around the world," the company continued in Monday's statement. "Developers set the price they want to charge for their app and Apple has no role in that. The vast majority of apps on the App Store are free and Apple gets nothing from them. The only instance where Apple shares in revenue is if the developer chooses to sell digital services through the App Store.
"Developers have a number of platforms to choose from to deliver their software - from other apps stores, to Smart TVs to gaming consoles - and we work hard every day to make sure our store is the best, safest, and most competitive in the world."
Critics have argued however that while people can choose to switch to other platforms, those who already own an iPhone or iPad are stuck with the App Store on it unless they hack their device in a way that invalidates Apple support.
"Today's decision means plaintiffs can proceed with their case in District court," the iPhone maker told CNBC. "We're confident we will prevail when the facts are presented and that the App Store is not a monopoly by any metric."
Earlier today the Supreme Court ruled 5 to 4 in favor of permitting a lower-court lawsuit, Apple v. Pepper, to proceed. The vote was split, but not along party lines. Conservative Justice Brett Kavanaugh agreed with liberal justices that the case should go forward.
"Apple's line-drawing does not make a lot of sense, other than as a way to gerrymander Apple out of this and similar lawsuits," Kavanaugh wrote in his majority opinion.
Beginning in 2011, the plaintiffs have argued that app prices are artificially inflated by the fact Apple will only allow sales through the App Store -- where it takes 15 to 30% from every transaction. Some developers have indeed raised App Store prices higher than elsewhere, such as Spotify, which recently filed a complaint with the European Commission over the same issue.
Apple argues that developers are the ones who set prices, and that it's not in violation of any antitrust laws. It moreover claims that by paying its commission, developers are "buying a package of services which include distribution and software and intellectual property and testing."
"We're proud to have created the safest, most secure and trusted platform for customers and a great business opportunity for all developers around the world," the company continued in Monday's statement. "Developers set the price they want to charge for their app and Apple has no role in that. The vast majority of apps on the App Store are free and Apple gets nothing from them. The only instance where Apple shares in revenue is if the developer chooses to sell digital services through the App Store.
"Developers have a number of platforms to choose from to deliver their software - from other apps stores, to Smart TVs to gaming consoles - and we work hard every day to make sure our store is the best, safest, and most competitive in the world."
Critics have argued however that while people can choose to switch to other platforms, those who already own an iPhone or iPad are stuck with the App Store on it unless they hack their device in a way that invalidates Apple support.
Comments
The court's four liberal justices joined Kavanaugh in the 5-4 decision.
https://www.cnn.com/2019/05/13/tech/apple-app-store-supreme-court/index.html
Even if it can be proven that the App Store has a monopoly, which I think will be difficult for obvious reasons, how is Apple abusing that power?
When I first heard about this story earlier today, besides Kavanaugh, I didn't know which side the other judges were on, and now I know.
Apple should ask for a fixed amount for a fixed set of ‘services’ needed to run the store.
As I mentioned before, apps can be signed by Apple (after some sanity and virus checks) and distributed via any digital means. App developers can put the apps on their home page (or whatever) and pay apple a few cents for signing only and skip the hosting fees. This adds the benefit of even better visibility for the app because Google can find it directly.
Actually I would not even care if the monopoly gave equal access to all interested parties, but it don't.
What is much worse is that Apple also upholds a cultural monopoly for their ecosystem, not only in the US but also across the other countries in which they market their products.
Apple tries to police an oddball mix of US CA political correctness, their management's personal political viewpoints (which often is completely irrelevant outside the US), Apple human policies, the typical left leaning slant of Silicon Valley and US legislation, many times at direct odds with legislation and culture in the country they market their product in.
This do not hold water over time for a company wanting to be global, but is unfortunately typical for US companies operating outside the US.
I don't think this particular case with the Supreme Court in the US will change it much. What I do expect is that Apple will have a much harder time in a European court and with the EU on the issue of the App store.
All this is worth the overhead that Apple charges for selling apps through the App Store. Were Apple to open up the system to outside sales and installation of apps, the alternatives would not drive prices down. An entirely independent developer selling their app through their own website would be hard-pressed to generate volume sales, because consumers would have to find them first, and also be convinced that the application isn't loaded with malware. They would also have to develop and maintain a sales and customer service back-end. That won't drive down prices. Without high volume sales, developers would have to charge more just to recoup the cost of development and overhead. That won't drive down prices. The other alternative, selling through a large third-party app store, run by Amazon, or Google, or BestBuy, or whoever, would be subject to the retailer taking a cut to cover their overhead. That won't drive down prices. The truth of all this is borne out by the fact that Android apps aren't any cheaper than iOS apps.
So the argument that the App Store injures consumers by inflating prices is specious. The argument that the App Store is a monopoly is also bogus, because you can bypass the whole thing by buying an Android phone and load it with whatever bloatware and malware apps you care to buy.
That was for security reasons, and that’s the primary reason the App Store is the only means of app distribution.
Some of the people who are fighting Apple’s approach maybe believe they have a noble cause, but all that will happen if they’re successful is to weaken the security of users’ devices and hurt Apple’s image (as nefarious apps end up on unsuspecting users’ devices). And Apple should make their devices less secure so that a small percentage of users can save a few dollars? How asinine.
Apps are so cheap, thanks to Apple. Or are you also too young to know how much software used to cost before the App Store?
Apple makes the developer set the price. That’s little difference from, say Macy’s, marking up the price of their items from their suppliers.
You know, realtors get commissions as a percent of home price.
app store, Samsung, etc.
Same as in brick and mortar.
A "traditional monopoly". It's either a monopoly or not. Owning something does not make you a monopoly it makes you the OWNER of it. It's Apple's platform, they OWN it. It has NEVER been an open development platform nor an open app distribution platform... EVER. Apple owns the developer tools and they own the OS, if they choose to own the distribution model that's absolutely within their right.
No one has to open their operating system to development and it's ludicrous to think that. Could people develop apps for the iPod? No. It was a closed platform. Apple did let a few developers write games for it, but that was it. iOS is NO different than that other than Apple has opened the doors to more developers, but they still have absolute control over the development and distribution of apps for the platform.
Saying Apple can't own and control any part of that is the same as saying Apple cannot tie their hardware and their operating system together, because people want iOS, but don't want to pay Apple's prices for their hardware. Well, tough sh!t. That's the PRODUCT Apple is selling. You don't like it, buy a different product.
There is no way, this is going win, doing so, means any product from any company on the market can be forced into breaking it apart and letting others in.