Justice Department reportedly launching Apple App Store antitrust probe

Posted:
in General Discussion edited June 2020
The Department of Justice and state attorneys general are reportedly preparing to launch an antitrust investigation into Apple's App Store after developers continue to raise concerns over anticompetitive behavior.




In Europe, Apple's App Store has long been the subject of debate for some time now, with government agencies launching antitrust probes into the company's behavior toward its competitors. Now it seems as though Apple may face the same scrutiny on its home turf.

The Department of Justice and a coalition of state attorneys general have spoken to several companies who believe Apple is engaging in anti-competitive behavior. Many companies take issue with Apple's 30% commission on App Store purchases -- especially if the consumer is subscribing to a service. They say that it has lead to higher costs and fewer choices for customers.

"It's one thing to structure your services in a restrictive way or use exclusive contracts when you're small," Gene Kimmelman, who worked in the DOJ's Antitrust Division during the Obama administration, told Politico. "But the bigger you become, the more dominant you become in a market, the more likely those types of restrictions -- unless they are absolutely essential to benefit consumers -- will be viewed skeptically as harmful to competition."

"In-app purchase is broken," Phillip Shoemaker, a former Apple executive who helped design and run the App Store from 2009 to 2016, told Politico. "As Apple is entering into more and more of these areas and putting out of business more developers, they really have got to think differently."

Hey, an email app by Basecamp, has recently reignited the debate about Apple's App Store policies. The company allowed users to download the app, but it was considered non-functional out of the box. Basecamp had directed users to pay a $99 fee on the Hey website, which bypassed Apple's 30% commission on subscriptions. In response, Apple halted updates and threatened to remove the app from the App Store.

In response, Apple's SVP of Worldwide Marketing Phil Schiller stated that the company has no plans to change App Store policies, even after intense scrutiny. Basecamp later went on to add in a 14-day free trial in-app purchase, which brought it in line with the App Store's terms of service.

In October of 2019, the U.S. House of Representatives Judiciary Committee had asked Spotify to provide information on Apple's alleged anti-competitive behavior, and specifically how it pertains to Spotify's business. Spotify had alleged that Apple "gives themselves unfair advantages at every turn."

Apple has faced antitrust probes in the European Union for some time, now. Not only have they battled with Spotify overseas, but several banks have brought antitrust cases against Apple's Apple Pay system.

Comments

  • Reply 1 of 14
    red oakred oak Posts: 964member
    This is ludicrous.   The App Store has been unbelievably positive for consumers.  

    Apple does not even have 50% market share in the US and has less than 20% share in the EU

    People ten years from now will still be waiting for Spotify to turn a profit 
    bshankviclauyycBeats
  • Reply 2 of 14
    So many problems with the antitrust aspect...developers set their own prices, freemium dominates the pricing schemes, apps can be sold on other software platforms that have larger numbers of users, Apple doesn't have majority control of phone or computer hardware, retail/grocery chains take cuts as a standard practice and also compete with their own store brand products, App Store customers are more likely (not less likely) to spend $$ on apps than other platforms with less controls, etc. 
    edited June 2020 skippingrockbshankviclauyyc
  • Reply 3 of 14
    tundraboytundraboy Posts: 1,844member
    Unbelievable.  First time ever, as far as I can recall, that a company that is not a monopolist, or even a dominant firm, will be investigated for antitrust violations.
    edited June 2020 viclauyyc
  • Reply 4 of 14
    This is purely trying to push an advantage by Microsoft as they know Apple can’t/won’t pursue any counter claim while they transition their architecture. It annoys me that MacOS and iOS devices are crippled when ever they connect to an exchange/Microsoft service in my experience, yet it is Apple who are under investigation. M$ seems to be able to go from bad to worse without being challenged at all. 
    bshank
  • Reply 5 of 14
    As I said in another article comment. The thing that you are getting different is more trust from the end users. Trust that the software has been vetted by a trusted third party to be secure, respect privacy, and consistent and fair in pricing to all users (I want to know I’m getting the same deal that other users are getting). 

    These fees have been enabling Apple to develop many of the hardware and software enhancements in iOS and new iOS devices. New iOS updates for features and security don’t come free, nor does the cost of inspecting, vetting, making downloads available with near 100% uptime and downloaded from a secure source that can’t be hijacked by a man-in-the-middle. These are the very reasons that I’m on this platform and not android and these are not free. 

    The developers are buying all this with the App Store fees. I do not have the same faith between apps downloaded from different app stores like Google Play, even by the same developer. They are not the same and if people are naive enough to think that the Google, Twitter and Facebook apps all have the same attention to privacy and security on both Rios and Android, they have more problems than these. 

    Apple needs to be telling both users and developers this Intrinsic value they are getting through their App Store purchases. 

    bshankviclauyyc
  • Reply 6 of 14
    gatorguygatorguy Posts: 23,467member
    As I said in another article comment. The thing that you are getting different is more trust from the end users. Trust that the software has been vetted by a trusted third party to be secure, respect privacy, and consistent and fair in pricing to all users (I want to know I’m getting the same deal that other users are getting). 

    New iOS updates for features and security don’t come free, nor does the cost of inspecting, vetting, making downloads available with near 100% uptime and downloaded from a secure source that can’t be hijacked by a man-in-the-middle. These are the very reasons that I’m on this platform and not android and these are not free. 

    I do not have the same faith between apps downloaded from different app stores like Google Play, even by the same developer.

    Apple does a wonderful job vetting apps to make sure they do what they say they do, but they're not infallible. 
    https://threatpost.com/click-fraud-malware-apple-app-store/149496/
    edited June 2020
  • Reply 7 of 14
    mac_dogmac_dog Posts: 1,017member
    Or, Apple waives a portion of their fees and simply charges developers a fee to sell their apps on apple’s storefront/marketplace. The alternative is developers can find their own way to market their apps. Period. Personally, I won’t shop anywhere but the App Store. 
    montrosemacs
  • Reply 8 of 14
    bshankbshank Posts: 248member
    tundraboy said:
    Unbelievable.  First time ever, as far as I can recall, that a company that is not a monopolist, or even a dominant firm, will be investigated for antitrust violations.
    iBooks was in 2013 I believe when Amazon had a strangle hold on ebooks. They raked Apple over the coals and ignored Amazon 
  • Reply 9 of 14
    bshankbshank Posts: 248member
    As I said in another article comment. The thing that you are getting different is more trust from the end users. Trust that the software has been vetted by a trusted third party to be secure, respect privacy, and consistent and fair in pricing to all users (I want to know I’m getting the same deal that other users are getting). 

    These fees have been enabling Apple to develop many of the hardware and software enhancements in iOS and new iOS devices. New iOS updates for features and security don’t come free, nor does the cost of inspecting, vetting, making downloads available with near 100% uptime and downloaded from a secure source that can’t be hijacked by a man-in-the-middle. These are the very reasons that I’m on this platform and not android and these are not free. 

    The developers are buying all this with the App Store fees. I do not have the same faith between apps downloaded from different app stores like Google Play, even by the same developer. They are not the same and if people are naive enough to think that the Google, Twitter and Facebook apps all have the same attention to privacy and security on both Rios and Android, they have more problems than these. 

    Apple needs to be telling both users and developers this Intrinsic value they are getting through their App Store purchases. 

    Most developers will just cry bloody murder anyway to save a buck, even though the 30% fee is a business expense the developer can write off. It’s just very lame, especially Daniel Ek 
    Beats
  • Reply 10 of 14
    bshank said: iBooks was in 2013 I believe when Amazon had a strangle hold on ebooks. They raked Apple over the coals and ignored Amazon 
    The interesting thing about that situation is that Amazon's obvious dominance of the market was given a pass because they were viewed as having lowered prices for consumers who wanted to read ebooks. Has the App Store lowered prices for consumers that want software? Certainly looks like it has, so that's an angle that Apple should be able to bring up in the hearings. 
    bshankBeats
  • Reply 11 of 14
    viclauyycviclauyyc Posts: 837member
    DOJ better sue eBay and Amazon too. Because they are pretty much the same. 

    bshank
  • Reply 12 of 14
    BeatsBeats Posts: 3,073member
    MY Store MY rules, f**k the U.S. government.

    Everything the government does is based on an agenda now. This is one of those moments where I miss Steve. Tim is too nice and they wanna bully him around.
    viclauyyc
  • Reply 13 of 14
    BeatsBeats Posts: 3,073member
    viclauyyc said:
    DOJ better sue eBay and Amazon too. Because they are pretty much the same. 

    Wal-Mart, Epic Games, every mom-and-pop shop.

    Then go after Coca-Cola for not distributing or manufacturing Pepsi, then the news networks(yeah right), Auto-Zone for not selling Lo'Real shampoo, movie theaters for not showing porn, porn sites for not allowing Disney shows, apartment complexes for not allowing pet shelters or vendor space.

    See how ridiculous this is?
    viclauyyc
  • Reply 14 of 14
    k2kwk2kw Posts: 2,073member
    This will teach Apple for giving $100 Million to those liberals.   Our Attorney General is the least corrupt ever. /s
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