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You are here: Home Blogs Community Pumpkins, markets, and one bad Apple

Pumpkins, markets, and one bad Apple

by Zoe Kooyman Contributions Published on Oct 20, 2021 05:59 PM

Imagine your local farmers market: every Saturday the whole town comes together to purchase fresh and homemade goods, enjoy the entertainment, and find that there is always something for everyone. Whatever you need, you can find it here, and anyone can sign up to have their own little stand. It is a wonderful place, or so it seems. Now, imagine starting out as a pumpkin farmer, and you want to sell your pumpkins at this market. The market owner asks 30% of every pumpkin that you sell. It's steep, but the market owner -- we'll call him Mr. Apple -- owns all the markets in your area, so you have little choice.

Let's continue this analogy and imagine that, since it is a little hard for you to make ends meet, you decide to tell your customers that they can come visit you at your farm to purchase pumpkins. Mr. Apple overhears and shuts your stand down. You explain that your business cannot be profitable this way, but the grumpy market owner says that you can either comply or find another place. At the end of your rope, you look for information about starting your own farmers market, but it seems Mr. Apple owns every building in town.

In the midst of Apple announcing its new products, attention is drawn away from its ongoing battle to maintain its subjugation over users globally. The Netherlands’ Authority for Consumers and Markets (ACM) last month informed the U.S. technology giant of its decision that the rules around the in-app payment system are anticompetitive, making it the first antitrust regulator to conclude that the company has abused market power in the App Store. And while Apple is appealing this verdict, the European Union is charging the company with another antitrust claim concerning the App Store.

Globally, about 17% of all mobile phone users have an iPhone, but Apple products and the iOS operating system are more popular in the West, which has a substantial effect on those numbers. To illustrate, in March 2021, 47% of all smartphone users in the United States were iPhone users. Apple holds 56.7% of the United States mobile operating system market share, and in Europe this is 30% (increased from almost 27% last year). It will come as no surprise that Google Play and the Apple App Store are the two main distributors of mobile apps globally. These numbers illustrate further what our pumpkin farmer experiences: You either play the game, follow the rules, and pay the fees arbitrarily determined by Apple, or you lose access to your potential customers. However, you can install a 3rd party application market on Android phones. One of them, called F-Droid, is one that exclusively distributes free software.

As the judge in the recent Epic Games v Apple lawsuit in the United States stated in her nearly 200 page court opinion, "not every business is entitled to have access to what is effectively shelf space if they cannot afford to pay a commission to the platform host." The positions of Apple or Google are hard to fight, because both organizations are extremely powerful and they are financially able to protect this power. Another reason is that court and governments globally lack in-house technical expertise, they have to rely on so-called "experts," who have immense influence on the verdict. But most importantly, legislation on issues pertaining to technology is so far behind that legal conclusions are difficult to draw, and mostly appealed.

Why is it so hard to show that Apple is in the wrong here? Epic Games v Apple sheds some light on this. To prove Apple was monopolizing the market, it had to be established first what market Apple would have this monopoly in. Apple has a hand in many different markets. To name a few, the mobile phone market, iOS apps, and the bigger gaming market. In this instance, it was settled that the market was mobile game payments. In the aforementioned case in the Netherlands, the focus was reduced to primarily dating market apps.

These results affect the verdict greatly, "Epic claimed Apple had abused a monopoly on the iOS app ecosystem; Apple claimed Fortnite was playing in the more competitive overall digital game market." The conclusion bypasses Apple's control over users of mobile phones and the App Store any iOS user is controlled by, because Apple does not have a monopoly in mobile gaming... yet.

Epic Games may have failed to demonstrate conclusively the monopolist position of Apple when it comes to mobile game payments, but according to Judge Yvonne Gonzalez Rogers of the United States District Court for the Northern District of California, "Apple’s anti-steering provisions hide critical information from consumers and illegally stifle consumer choice. When coupled with Apple’s incipient antitrust violations, these anti-steering provisions are anticompetitive and a nationwide remedy to eliminate those provisions is warranted." This is a small victory for developers who would be allowed to link to other in-app purchases and could potentially bypass Apple's cut. The case of Epic Games v Apple is interesting because it shakes the position of Apple, but let's not forget that Epic Games itself has no intention for its users to be any more free than Apple.

Nothing may come of this particular case either, as it will be held up in appeals for the coming years, but countries all over the world have come to realize that the position Apple has ascribed itself violates people's rights, developer or otherwise. In addition to the new charges from the European Committee, a parallel initiative to the Epic Games v Apple court ruling in the US is the Open App Markets Act, proposed by Senators Amy Klobuchar, Richard Blumenthal, and Marsha Blackburn, which would place a variety of restrictions on major app marketplaces in order to protect competition. On August 31, South Korea passed new regulations requiring Apple to accept alternate payments in their respective app stores. Apple has made other concessions in recent months as well, including allowing "reader apps," any app that requires a subscription to use, to direct users to their own Web sites for payments. That specific guideline change came in response to a probe by Japan's Fair Trade Commission.

People, developers, and governments around the world are beginning to rise against Apple's powerful and restrictive position. According to a timeline The Verge put together, "Apple has had to change more App Store policies between August 26, 2021 to September 10, than in any other period in its history." Apple is fighting to hold its grip on the App Store, because it increasingly delivers a large percentage of its annual profits at an immense margin. Apple (and Google) often cite safety and keeping users secure from malicious software as the main reasons why they should have the unbridled right to control how and which software is distributed to millions of users, and often also the main reason for imposing Digital Restrictions Management (DRM), but at a margin estimated at nearly 72%, you would think that they can afford to protect users and their freedom.

Threatening danger, fraud, or malware, are all clever and often used ways of scaring users into agreeing to ever more restricting user terms and conditions. The cost of developing ways to keep users safe is not about finances, but power. Besides limiting developers financially, they can also not distribute free software via Apple. Again, under the guise of "protection," Apple's App Store only allows technologically restricted software. And make no mistake, despite misleading advertising, there is also no freedom for users in the way Apple runs its App Store. We must remember that having freedom is not "insecure," rather, it is a precondition for true privacy. Without access to source code, we can never verify privacy, or safety on Apple's devices.

Every security claim about the benefits of vetting installable software is actually an argument for a world where the user can choose which security vetting entity to trust. This world requires free software. You can think of this as the monopoly Apple has -- a monopoly on who gets to decide what software is installable and usable on iOS devices. There are no significant competitors because Apple threatens them with legal action, and takes extreme technical measures to stop users from trying them out.

Instead of trying to maintain the status quo one court case after the other, it is time to evolve, Apple, move forward with freedom, not against it. As one of the most successful and richest companies in the world, we can not let it tell us that absolute control over our user freedom is a justifiable price to pay to make sure its technology is up to par. Users deserve the freedom to decide what programs they want to install and run on their devices. Developers deserve a market place where they can distribute their work. Apple is trying to hold on to the power they currently have, but we have to rally for change.

If we do, Apple will have no choice but to stop trying to hold users hostage on its platforms. But we also need to keep our eyes on the goal. Just because some parties are fighting to take power away from Apple, we cannot sit back and let power transfer from one proprietary organization to another. Governments need to take measures and proper legislation needs to be established, not to assure financial gain for anyone, but for free software developers to distribute and fund their work, and, and for the freedom for users to control our own devices, to install and to run the software we choose.

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