Apple Says The App Store Is Not a Monopoly

[Lith1um]

. the suit is from some alleged "consumers" who claim that app prices themselves are too high and would be lower with more stores competing ...

Which is just uncontested common sense to most people.

 

[kbrickley]

Which is just uncontested common sense to most people.

Except in this case it is not the store that sets the price but the seller. Why would more than one selling venue affect the price? Couldn't the seller change the price now, if they wanted, even with one store? Angry Birds is priced differently on Apple and Android stores because of the difference in revenue compensation (Apple doesn't have a good model for revenue from advertising while that is the meat and potatoes of the Google system).

Apple also doesn't seem to restrict or encourage placement of apps in their store only. They seem mostly indifferent to the developers as long as they don't violate the terms and conditions for being on the Apple store. Microsoft and Intel got into monopoly troubles because they punished companies that were supporting competing solutions. There doesn't appear to be any of that going on in the App store.

If a group of developers want to bring a suit against Apple, Steam, Amazon, and Google on the percentage cut they take to maintain the stores that might be more valid perhaps but I still fail to see how suing Apple (who doesn't control App prices) affects App prices

 

[TechLarry]

Yep Evil Apple. They should repent considering I can download XBox DLC from anywhere, and of Microsoft doesn't limit the number of free updates that can be issued for a game...

Oh, wait....

 

[dr.stevil]

Exactly, best analogy in the thread. Companies like Apple argue that controlling what software is on their equipment is necessary from the standpoint of providing safety and security to their customers.

But Chevrolet doesn't stop you from installing whatever parts you desire, you can install aftermarket brakes or tires if you want, you just void your warranty on those components and and waive support.

but you CAN do that on iOS already.

it's called Cydia and it will void your warrenty if you're caught jailbreaking. Plenty of developers, that were turned away from the Appstore for various reasons, sell their applications on Cydia since there are no real restrictions put upon developers (emulators are a big one)

So in that sense, there is an alternative to the appstore... Apple just doesn't make it easy to access and will void your warrenty if they catch you using it... very similar to your car analogy

 

[GaryJohnson]

But Chevrolet doesn't stop you from installing whatever parts you desire, you can install aftermarket brakes or tires if you want, you just void your warranty on those components and and waive support.

Chevy does prevent you from installing third party software on your ECU. If you want to do that you have to throw out the whole ECU and get a programmable one.

 

[Revdarian]

I will only say that i'm gonna laugh so hard when the EU finally asks for their piece of the pie.

We all know that it is coming.

 

[Revdarian]

No, that's not true considering there is an android alternative. It isn't apples fault that they created a system that allows developers to flock to them to use apples store front outlet to sell their products. Apple is like a giant shopping mall that lets all kinds of different stores (developers) set up shop with them and charges them 'rent' to be there. It's nothing more than that. However, they aren't the only shopping mall in town.

Of course that it is their fault!

They created the system with a fence in it, and they will be talked about that by the EU at some point in the future, and the settlement will make Microsoft's IE deal seem like a child's allowance.

In MS's case the user could install their own solution, in Apple's case the user can't do anything like that.

 

[Cali3350]

iOS is a luxery commodity, it is not needed in any way (even in the sense of "I cant compete in the modern world without out! Like some used against Microsoft in the 90's - Android and WP8 work just fine here) and there are multiple competitors.

Trying to change what apple does here doesnt sit right with me. They certainly have the right in my mind (though I also think Microsofts stuff in the 90's was total BS).

 

[Cali3350]

Trying to change what apple does here doesnt sit right with me. They certainly have the right in my mind (though I also think Microsofts stuff in the 90's was total BS).

As in I think what Microsoft did with their browser and all was ok. Realized that could be read the other way to insinuate I thought Microsoft did bad.

 

[Revdarian]

Np man, it doesn't have to sit right or wrong, it has to be considered as a possibility for a couple extra billions of euros for the European Union

And yeah, if MS had to pay such a hefty ammount for not saying "pick and choose from these browsers", while the user had the chance to install them by their own hand, just imagine what would happen on this enviroment where the user has no choice at all!...

Ohhh they must be having such W€t Dr€ams right now!

 

[BBA]

this is already the case, the issue is that the phone doesnt actually cost the $200 you are paying for it, it actually costs maybe $700, locking people into carriers is how they get their profit.

The cost of $700 comes from who's figures? Its MSRP or actual production costs? Actual production costs are MUCH less than $700, heck, the last time I read about it, I think the iphone 5 costs like $200ish to produce. I know you can buy them unlocked for $500 online.

Also consider the 'subsidized contracts' cost on average $1400 more over a 2 year term than outright buying the phone and using month to month coverage plans for the same 2 years, this totally blows any $200 figure into wishful thinking la-la land.

My point is: The iphone (and any other high end phone) is already a pure ripoff when it comes to subsidized contracts. But...as this rip-off is not Apple inclusive you have to consider the fact other comparable phones do not have locked app stores, therefore the Apple app store arrangement locking available software is anti-competitive.

 

[ballistic90]

Free market capitalism works fine if done correctly. If the government stops making laws that protect certain market segments and if people abusing the system are caught and fined right away.

What Apple has done is intentionally created a Monopoly. They should be fined and forced to open their products up. Free market capitalism only works when the whole system is open. If any part of it is protected, that's where it gets screwed up. At least in the case of Apple, there are (now) other products that are similar that can be used to avoid their "walled garden".

...Do you know what Free Market Capitalism is? That means no consumer protections at all. No fines. Nothing to prevent a Monopoly. The market itself is supposed to fix itself and it never, EVER does that.

 

[sviola]

Free market capitalism works fine if done correctly. If the government stops making laws that protect certain market segments and if people abusing the system are caught and fined right away.

Not sure you know what Free market capitalism is. There is no regulation, so there is no getting caught and fined. This only happens if there is some form of regulation, to prevent anti-competitive initiatives.

 

[kbrickley]

Although the rules in the EU may be different (and do we REALLY want to become the EU ) there is nothing wrong or illegal with having a Monopoly ... in the US it is only illegal if you use the power of your monopoly in an anti-competitive fashion ... this lawsuit seems very narrow and is focused on App pricing ... since Apple doesn't set the App prices and the 30% fee covers all hosting and payment processing fees (and doesn't apply to free Apps) there don't seem to be any big issues on the pricing side

There have been some instances where apps that competed with Apple functions had issues and there could be some monopoly concerns on that front ... but pricing doesn't seem to be the place to attack Apple Apps

 

[Dekarx]

It is not a monopoly of the product, it is a monopoly of the selling point. Apple forces you to buy every app you put on an idevice from the apple store. If I have a pc or ps3, I can buy my games and programs from a plethora of sellers. If I have an iPhone, I buy every single piece of software directly from Apple. It also IS a safer and hassle-free option, but it is still the only option. The problem isn't that no one bothered to open an alternative store for iprograms, but that they CANNOT since apple forces dev to sell on their store.

 

[kbrickley]

It is not a monopoly of the product, it is a monopoly of the selling point. Apple forces you to buy every app you put on an idevice from the apple store. If I have a pc or ps3, I can buy my games and programs from a plethora of sellers. If I have an iPhone, I buy every single piece of software directly from Apple. It also IS a safer and hassle-free option, but it is still the only option. The problem isn't that no one bothered to open an alternative store for iprograms, but that they CANNOT since apple forces dev to sell on their store.

But a monopoly is not illegal in the USA ... only misusing the monopoly position is illegal ... they have to prove that Apple is preventing competition through their monopoly ... not that Apple has a monopoly

 

[Absentee]

The only monopoly here is the monopoly on selling apps for use on an iPhone.
Don't like it? Don't buy an iPhone.

You can't have your cake and eat it too. You can't have your iPhone and get a more open platform (unless you jailbreak)

There is NO monopoly right now on phone apps. There are at least three other phone app stores out there. They just don't work on your preferred phone. You DO have options though, like moving to a different phone OS, so by definition, Apple doesn't have a monopoly on the market. Only on their (owned and operated) marketplace.

 

[Azhar]

They are right. Is Target supposed to allow Walmart shelf space in their stores? Should Apple be able to sell on the Andoid Marketplace?

Apple product, Apple marketplace.

Bad analogy. Fisher Price, Corning Ware, Black and Decker, are allowed to sell their products in Wal-Mart, Target, K-Mart, or on their own web site.

In this monopoly case, Angry Bird for the iDevices for example would only be available on the Apple App Store - or linked to the App Store from the developer's web site. Developers would not be able to sell their iDevice app on Amazon or anywhere else.

As for the monopoly case, well it's a popular mobile phone. Apple's only trying to make sure their users have the easiest and safest experience possible. Remember how people used to complain that Blackberry apps were all over the place? It never took off because Blackberry didn't have apps - or so everyone thought because nobody knew where to look.

Microsoft's doing the same thing with their Microsoft Store for mobile and RT devices.

 

[jackofalltrades]

Yeah marketing your app from numorous sites wouldn't be profitable right? droid market,never has made money from giving away limited apps in hopes of selling full-featured apps right?
Too many viruses and buggy programs that way.

 

[McFry]

They are right. Is Target supposed to allow Walmart shelf space in their stores? Should Apple be able to sell on the Andoid Marketplace?

Apple product, Apple marketplace.

Terrible example. Do Target and Walmart not both sell coke products? You can get the same thing from either store. Apple has no more to do with the content of their store than Target does with Coke's recipe. Someone provides a product, and Apple provides a place to sell it. FORBIDDING anyone from selling it elsewhere is monopolistic.

 

[wonderfield]

It is not a monopoly of the product, it is a monopoly of the selling point. Apple forces you to buy every app you put on an idevice from the apple store.

That actually depends on how you define "app".

 

[stevejg61]

Honestly, I probably wouldn't want to buy an app other than from the app store UNLESS it was known to be safe, or if it was directly from the creator -- for instance, getting Need for Speed from EA's "store" for a lesser price over the App Store's. Although, Apple product users don't even get the choice of installing something that isn't directly from the App Store. I've installed some software on my Samsung smart phone that was from a website. It's nice to have that ability.

If you break it down, it does sound like a monopoly though. What if Amazon decided you could only buy e-books for the Kindle from their site?

What was unmentioned is that if you buy an app through the "iStore" you are locked into the "iStore" forever for that app. If you buy a magazine reader app and then go to the author's web site, you cannot buy a magazine there. You have to buy it from the "iStore". That is Apple's rules and there is no getting around this. That is where abuse of monopoly comes in and they have been doing that.

 

[kbrickley]

What was unmentioned is that if you buy an app through the "iStore" you are locked into the "iStore" forever for that app. If you buy a magazine reader app and then go to the author's web site, you cannot buy a magazine there. You have to buy it from the "iStore". That is Apple's rules and there is no getting around this. That is where abuse of monopoly comes in and they have been doing that.

What ... that isn't true ... I have the Zinio app on my iPad and I purchase my subscriptions from the Zinio website all the time ...

same with Kindle and Nook apps ... I can buy my books from Amazon and Barnes and Noble stores respectively ...

same with Audible app ... I manage my audiobook purchases through the audible site

 

[OP20]

For those saying capitalism doesn't work, how would you know? We haven't had capitalism... we have had corporatism where BIG government helps BIG business screw the little guy and dump debt on the tax payer.

Free markers give the consumer ALL the power. If the consumer doesn't like what a company has done with its product then they can choose to no longer support the company by purchasing their product. Companies in a free marker will do whatever the consumer lets them do. If you don't like what Apple has done... Stop buying Apple products.

 

[rudy]

this is already the case, the issue is that the phone doesnt actually cost the $200 you are paying for it, it actually costs maybe $700, locking people into carriers is how they get their profit. or are you arguing that phones should stop being subsidized?



but what about the people who harm themselves? have you ever fixed a computer before?
maybe im a phone manufacturer that doesnt want to deal with the thousands of service calls from fucktards who just downloaded fast porn downloader 3000. because it was the number one antivirus on google search!



and then no one would buy this sears house. and the market solves the issue.

Any argument about subsidized phones is meaningless, the carriers have always had a way to deal with that, its called the early termination fee and what apps you put on your phone or how you decide to use your phone has nothing to do with that. They have a form of protecting their investment.

As for the sears house, people have already bought the iPhone so you are wrong people do buy into this. And consoles are very popular too. That's the whole point of a subsidized device or trying to lower the buy in price. People have been harming themselves in the computer and phone industry from the start it also does not matter, they work the cost of insurance and support into the product, always have always will. Insurance companies can make reasonable claims too, as long as you don't bother the hardware, nothing on the software side cant be fixed with a hard reset, and that's pretty much all the techs do anyway , so why does it matter if someone installs a virus? Hard reset, its fixed. Its not like any of these companies really look into and try to solve problems with all the apps people download. That's almost always up to the user and if it all fails they bring the phone into a support center and most of the time the center just hard resets it.

 

[raz-0]

Exactly, best analogy in the thread. Companies like Apple argue that controlling what software is on their equipment is necessary from the standpoint of providing safety and security to their customers.

But Chevrolet doesn't stop you from installing whatever parts you desire, you can install aftermarket brakes or tires if you want, you just void your warranty on those components and and waive support.

It's a good analogy, but it is also incomplete.

Apple writes software, they control the app store which is the only legitimate source for software under iOS. They also have a policy of denying and revoking approval of applications that compete with things they sell or bundle with the OS.

They are engaging in abuse of the end users as well as engaging in anti competitive practices against competitors.

 

[Ur_Mom]

Although, Apple product users don't even get the choice of installing something that isn't directly from the App Store. I've installed some software on my Samsung smart phone that was from a website. It's nice to have that ability.

This is my issue with the Apple App Store (and the Microsoft Store on WP8). Maybe I was spoiled with Android and it's openness, but being locked to one single source for applications sucks. Yes, it's more secure in that apps have to go through the approval process, etc., but some great apps are not able to pass the process for one reason or another.

Monopoly? I am not sure. Would it be a monopoly if Ford only allowed parts to be bought at Ford dealerships and any other part store would be sued (NAPA, Autozone, and others)? Bad business practice, but I don't think it's a monopoly. Just a very closed system.

The IE think in the EU is different. I don't agree with that one bit. Microsoft is not forcing you to use their browser one bit. You have the choice to download another one, they aren't saying you can't nor are they putting any limits. By EU standards, the Apple use of the App Store would be a monopoly. Just not by US standards.

 

[nutzo]

They are right. Is Target supposed to allow Walmart shelf space in their stores? Should Apple be able to sell on the Andoid Marketplace?

Apple product, Apple marketplace.

Really bad example.

A better example would be if you bought a car from Ford, and they locked the gas cap and the hood, with only Ford dealers having the key.
Everytime you needed gas, you would have to go to a Ford Dealer and pay them to fill up your tank.
Everytime you needed an oil change (or any service) you would have to go back to Ford.

Of course you could "Jailbreak" your car by removing the locks so you could get gas/service elsewhere, but that would void your warranty

 

[kbrickley]

Really bad example.

A better example would be if you bought a car from Ford, and they locked the gas cap and the hood, with only Ford dealers having the key.
Everytime you needed gas, you would have to go to a Ford Dealer and pay them to fill up your tank.
Everytime you needed an oil change (or any service) you would have to go back to Ford.

Of course you could "Jailbreak" your car by removing the locks so you could get gas/service elsewhere, but that would void your warranty

Except that a car does not work if you don't do maintenance or put gas in it ... a tablet or phone is fully functional even if you don't buy a single app ... the one app store practice of Apple that is actually questionable is how they treat Apps that compete with Apps that come preinstalled in their phones/tablets ... they are a little shakey on that ground

The rest of it is all bogus ... Apple doesn't prevent any developer from selling his app on other stores, if he desires (Angry Birds and many others are available on both Google and Apple platforms) ... Apple doesn't require the App Developer to charge for their app and the only restriction on pricing is the limit to $0.99 increments ... For the competing book and magazine vendors they are allowed to sell their product offerings outside the Apple Store so that they are not obligated to pay Apple the 30% surcharge ... except for the few instances where Apple rejected competing Apps I don't see where they have abused their monopoly (since having a monopoly is not illegal in itself)

 

[mope54]

I wish people would quit coming up with these ridiculous car analogies. The people using them must be driving 20+ year old cars or haven't had to do any extensive repairs yet because the automobile industry has been locking both consumers and independent repair shops out of their systems for a very long time now.

At the very least keep the analogies sensical.
If you compare what happens when one puts gas into a Ford then the analogous behavior would be charging the phone. Does Apple require users to charge their phones in the Apple store?

If you compare what happens when one does an oil change on a Ford then the analogous behavior would be replacing the battery. Does Apple require users to replace the batteries in their Apple store? Only if that person wants to retain the warranty on the device...exactly the same as a Ford vehicle under warranty.


Regarding this nonsense about Target vs. Wal-mart it is not up to anyone other than the vendor whether they sell a product on their shelves. Wal-mart has a standard policy of not allowing adult rated material in its stores (similar to Apple's policy). It is not up to Capital Record whether a particular CD is sold in Wal-mart--it's up to Wal-mart. Additionally, it's up to Wal-mart whether its house brand of toilet paper is sold elsewhere.

 

[Methadras]

Wait a second. Your store analogy sucks.

Rent is a flat rate and has little or nothing to do with amount of stock being moved by the store. What Apple is doing is a form of tax.

I'm simply talking about the financial vehicle of how Apple and the developers it attracts set up shop. If Apple was a shopping mall, the developers would want to set up shop to sell their wares or in this case their apps from there no? It doesn't matter how much inventory they move, as long as Apple get the rent, which in this case is 30% or whatever it is they deem. Only governments can levy taxes.

 

[Methadras]

Holy shit. How can anyone be this fucking brainwashed?

I can't see how fucking stupid you appear to be. I've distilled the system down to that analogy. Clearly it's more complex, but if you can't even understand that simple example, then I can't help you.

 

[Methadras]

Totally missing the point.

Noone is arguing against Apple's right to operate their own store but it becomes an issue when they created a system that prevents iOS developers from selling their products anywhere else but through Apples store. That's when it becomes a monopoly.

So Apple doesn't have the right to create an operating system that prevents iOS developers from selling apps developed for their platform anywhere else? So who made the app developers come to apple by force and forcibly agree under duress to the terms of being able to sell.

 

[mope54]

please don't feed trolls. developers can sell their apps wherever they want

 

[Ocean]

[...]stop all this BS about locking phones[...]

Any argument about subsidized phones is meaningless, the carriers have always had a way to deal with that, its called the early termination fee and what apps you put on your phone or how you decide to use your phone has nothing to do with that. They have a form of protecting their investment.

which is it? should they protect their investment or stop the bullshit locking their phones into one carrier until youve ended your contract via time or an early termination fee that recoups cash up to ~the msrp level?

As for the sears house, people have already bought the iPhone so you are wrong people do buy into this. And consoles are very popular too. That's the whole point of a subsidized device or trying to lower the buy in price. ...

which is exactly my point. it is not comparable to your "sears house can only have sears appliances" because the market forces would destroy that concept. it would be more analogous to "cheap sears house if you only buy sears appliances"
it offers price benefits for the consumer. consumers get more bang for the buck with the trade off that more of their money goes to one company instead of their competitors

 

[dgz]

I'm simply talking about the financial vehicle of how Apple and the developers it attracts set up shop. If Apple was a shopping mall, the developers would want to set up shop to sell their wares or in this case their apps from there no? It doesn't matter how much inventory they move, as long as Apple get the rent, which in this case is 30% or whatever it is they deem. Only governments can levy taxes.

So, it's not a tax, because only governments impose those, yet Apple takes percentage of revenue (stock being moved), even though you're saying that ain't so. I am confused.

 

[rudy]

which is it? should they protect their investment or stop the bullshit locking their phones into one carrier until youve ended your contract via time or an early termination fee that recoups cash up to ~the msrp level?





which is exactly my point. it is not comparable to your "sears house can only have sears appliances" because the market forces would destroy that concept. it would be more analogous to "cheap sears house if you only buy sears appliances"
it offers price benefits for the consumer. consumers get more bang for the buck with the trade off that more of their money goes to one company instead of their competitors

They should stop all the bull shit because it is totally unneeded. Locking phones, preventing rooting / jail breaking, and limiting people to single sources of apps. The industry argues these things are needed in total bullshit ways. If you leave the carrier and move to another one you pay an early termination fee that covers the difference in cost for your phone.

My point is they are already protecting their investment with an ETF, locking the phone has nothing to do with protecting their investment. Its bullshit to keep ignorant consumers tied to a carrier. Everything in the industry is about making more money and hooking people into platforms or services. None of it has to do with security, or subsidizing. Those are just excuses to reap more profits and hinder competition.

 

[Ocean]

The cost of $700 comes from who's figures? Its MSRP or actual production costs? Actual production costs are MUCH less than $700, heck, the last time I read about it, I think the iphone 5 costs like $200ish to produce. I know you can buy them unlocked for $500 online.

yeah but then factor in engineering, design, software, support, shipping, advertising, supply vs demand, things like icloud and siri, and a profit motive required for creating the phone in the first place.
its not just materials and labor.
but yeah, cheap up front = equals more expensive in the long run, and that is what the vast majority wants.

Also consider the 'subsidized contracts' cost on average $1400 more over a 2 year term than outright buying the phone and using month to month coverage plans for the same 2 years, this totally blows any $200 figure into wishful thinking la-la land.

My point is: The iphone (and any other high end phone) is already a pure ripoff when it comes to subsidized contracts. But...as this rip-off is not Apple inclusive you have to consider the fact other comparable phones do not have locked app stores, therefore the Apple app store arrangement locking available software is anti-competitive.

would love to get an unsubsidized contract, but i live in america and americans suck at financial management. they too, want cheap! powerful! now! even though itll be more expensive by bunches starting a mere 3 months later.

 

[Ocean]

They should stop all the bull shit because it is totally unneeded. Locking phones, preventing rooting / jail breaking, and limiting people to single sources of apps. The industry argues these things are needed in total bullshit ways. If you leave the carrier and move to another one you pay an early termination fee that covers the difference in cost for your phone.

My point is they are already protecting their investment with an ETF, locking the phone has nothing to do with protecting their investment. Its bullshit to keep ignorant consumers tied to a carrier. Everything in the industry is about making more money and hooking people into platforms or services. None of it has to do with security, or subsidizing. Those are just excuses to reap more profits and hinder competition.

oh my bad, im in america,
neither my hardware manufacturer, apple, or my phone carrier at&t, nor the law, gives a fuck whether or not i jailbrake my phone, download apps from cydia, or take it to another carrier.

 

[Azhar]

Except that a car does not work if you don't do maintenance or put gas in it ... a tablet or phone is fully functional even if you don't buy a single app ... the one app store practice of Apple that is actually questionable is how they treat Apps that compete with Apps that come preinstalled in their phones/tablets ... they are a little shakey on that ground

The rest of it is all bogus ... Apple doesn't prevent any developer from selling his app on other stores, if he desires (Angry Birds and many others are available on both Google and Apple platforms) ... Apple doesn't require the App Developer to charge for their app and the only restriction on pricing is the limit to $0.99 increments ... For the competing book and magazine vendors they are allowed to sell their product offerings outside the Apple Store so that they are not obligated to pay Apple the 30% surcharge ... except for the few instances where Apple rejected competing Apps I don't see where they have abused their monopoly (since having a monopoly is not illegal in itself)

Sorry but this is also a bad analogy. Since you use gas as an example to keep your car running, you also need electricity to keep your iPhone running.

An apt car and App Store analogy would be that you don't need to subscribe to satellite radio or Onstar to drive your car, just as you don't need to purchase apps to use your iPhone.