{"id":29224,"date":"2020-06-16T15:57:15","date_gmt":"2020-06-16T19:57:15","guid":{"rendered":"https:\/\/mjtsai.com\/blog\/?p=29224"},"modified":"2021-06-18T07:10:31","modified_gmt":"2021-06-18T11:10:31","slug":"european-app-store-antitrust-investigation","status":"publish","type":"post","link":"https:\/\/mjtsai.com\/blog\/2020\/06\/16\/european-app-store-antitrust-investigation\/","title":{"rendered":"European App Store Antitrust Investigation"},"content":{"rendered":"

Will Oremus<\/a> (tweet<\/a>):<\/p>\n

It’s a function of Apple policy. With some exceptions, the company doesn’t let users pay app makers directly for their apps or digital services. They can only pay Apple, which takes a 30% cut of all revenue and then passes 70% to the developer. (For subscription services, which account for the majority of App Store revenues, that 30% cut drops to 15% after the first year.) To tighten its grip, Apple prohibits the affected apps from even telling users how they can pay their creators directly.<\/p><\/blockquote>\n\n

European Commission<\/a> (via Tom Warren<\/a>, Hacker News<\/a>, MacRumors<\/a>):<\/p>\n

The European Commission has opened formal antitrust investigations to assess whether Apple’s rules for app developers on the distribution of apps via the App Store violate EU competition rules. The investigations concern in particular the mandatory use of Apple’s own proprietary in-app purchase system and restrictions on the ability of developers to inform iPhone and iPad users of alternative cheaper purchasing possibilities outside of apps.<\/p>\n

The investigations concern the application of these rules to all apps, which compete with Apple’s own apps and services in the European Economic Area (EEA). The investigations follow-up on separate complaints by Spotify and by an e-book\/audiobook distributor on the impact of the App Store rules on competition in music streaming and e-books\/audiobooks.<\/p><\/blockquote>\n\n

Apple<\/a> (via MacRumors<\/a>):<\/p>\n

Apple today announced the App Store<\/a> ecosystem supported $519 billion in billings and sales globally in 2019 alone. The new study<\/a>, conducted by independent economists at Analysis Group, found that the highest value categories were mobile commerce (m-commerce) apps, digital goods and services apps, and in-app advertising. The results encapsulate the full sweep of the dynamic, competitive, and flourishing app economy, which has unleashed a torrent of innovation across 175 countries and revolutionized the way the world learns, works, and connects.<\/p><\/blockquote>\n

Note that, as it says on the first page, the study was funded by Apple.<\/p>\n\n

Nick Heer<\/a>:<\/p>\n

The key words in the study and the way Apple describes it are “facilitated” and “supported”. That means that dinners ordered through DoorDash, goods bought through the Amazon app, and transactions made through Venmo or WeChat are all estimated in this study as being commerce facilitated by the App Store.<\/p>\n<\/blockquote>\n\n

Next, let’s study the commerce facilitated by HTTP. Of course, there’s no way to study the opportunity cost customers and developers have been paying for the App Store being run in this way.<\/p>\n\n

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Did you catch that? “Selling physical goods” is, apparently, just another way of monetizing an app. While you might consider apps from DoorDash or Amazon just native front-ends for their business, this study reverses that logic and suggests that the apps’ existence is facilitated by the goods and services sold through them.<\/p><\/blockquote>\n\n

Apple<\/a>:<\/p>\n

It’s disappointing the European Commission is advancing baseless complaints from a handful of companies who simply want a free ride, and don’t want to play by the same rules as everyone else… We don’t think that’s right — we want to maintain a level playing field where anyone with determination and a great idea can succeed.<\/p><\/blockquote>\n\n

Manton Reece<\/a>:<\/p>\n

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This is the worst, most insulting statement from Apple that I’ve ever seen. Everything in it is backwards.<\/p>\n<\/blockquote>\n\n

See also: Ryan Jones<\/a>, Michael Love<\/a>.<\/p>\n\n

Previously:<\/p>\n