On Wednesday, Apple refreshed the App Store website with a new page called “Principles and Practices”. The page lists all the good the platform has done for customers and developers using language emphasizing the fairness to Apple’s approach. It seems that this page presents Apple’s defense against recent anti-monopoly lawsuits. The Verge postulates the new page clearly shows how difficult it can be for other app stores and developers to compete against Apple.
Regulatory scrutiny for iOS App Store has been intensifying in recent months, largely due to a formal complaint by rival Spotify to European regulators earlier this year, which alleged that Apple engages in anticompetitive behavior. The fundamental criticism is that Apple derives unfair advantages by competing on its own platform, it undercuts competition by taking a 15% to 30% cut on sale of apps.
As Apple launches more and more services, the list of developers that become rivals is growing too. In a major legal blow earlier this month, the U.S. Supreme Court ruled that consumers can sue Apple for antitrust violations.
In contrast to this the new page for the App Store principles and practices reads, “We’re proud that, to date, developers have earned more than $120 billion worldwide from selling digital goods,” the page says. Eighty-four percent of apps are free, “and developers pay nothing to Apple.”
It also says the App Store “welcomes competition” and the page lists the third-party apps that compete against Apple’s own products, like the iOS Mail app compared to Gmail and the various music-streaming services that compete with Apple Music. But the company fails to mention that none of the third party apps can be chosen as the default messaging app, maps service, email client, web browser, or music player.
Source – Apple website
Additionally Apple claims its control over the iOS ecosystem is both fair for developers and good for the consumer. “We take responsibility for ensuring that apps are held to a high standard for privacy, security, and content because nothing is more important than maintaining the trust of our users,” the page says, noting that Apple carefully reviews all apps to ensure quality before they go up on the store.
The page also mentions Apple’s key argument against the app store antitrust battle. ”The company doesn’t set the prices on the store; the developers do. The business model has worked and helped create more than 1.5 million jobs in the US, and another 1.5 million in Europe, devoted to iOS app design,” the company adds.
Apple also listed other types of apps in the store, some of them are completely free, while few are paid and few are with in-app purchases or monthly subscriptions. Some of the essential apps are classified as “reader” apps because those companies have decided against giving Apple a cut of their in-app purchases and subscriptions.
This category includes Amazon Kindle, Netflix, and Spotify. Apple says customers of these services “enjoy access to that content inside the app on their Apple devices” and that “developers receive all of the revenue they generate from bringing the customer to the app.” Netflix, on the other hand, recently decided to circumvent the 30 percent App Store “tax” by forcing new subscribers to ditch the Apple iTunes payment method and make the purchase on Netflix’s mobile website.
Overall, Apple’s defense is essentially telling the public, “Hey trust us, we’re doing a good job. You don’t want to deal with another iOS app store.” One of the users on Hacker News commented,
“Their comparison of other apps in the store is quite disingenuous.
Yes, you technically have other music players, but they’re not as integrated into the OS as Apple Music is. We picked Apple Music for this reason, even though it’s a rather bad UI.
Same with Maps. Not that I want to give Google more of my location data but others that want to use Google Maps as their default maps app, can’t right now without all kinds of third party hacks.
So yes, the competition does exist, but due to deliberate actions BY APPLE to stifle their APIs to keep them heavily restricted, these apps really aren’t first class citizens on the OS.
I largely favor Apple’s approach of minimizing data sharing, but their apps are often inferior to the third party alternatives. They should use their app store stick to instead have a MFi-like certification program for data. If you want to be a first-party app for Maps, Mail, locations, etc, you have to demonstrate that you won’t abuse that data, and have the right infrastructure to protect it.”
Hence, it is all up to the courts and regulators to determine whether Apple’s arguments against antitrust action hold any sway. But there’s lot of money at stake. Although Apple makes most of its revenue from iPhone sales, the company’s “service” category, which includes fees taken from App Store sales, is its second-largest profit making business for Apple.