Apple’s App Store changes don’t satisfy regulators, Spotify, or Fortnite’s Epic Games
Apple, under fire from developers and regulators over how it runs its powerful App Store, is changing some of its rules, via a proposed lawsuit settlement.
Is it a big problem or nothing?
Depends on who you ask. Apple says it’s giving companies like Spotify and Epic Games, the developer behind Fortnite, something they’ve always been asking for. These companies and other tech critics say that is not enough.
And some of the first news media coverage is ubiquitous. “Apple will allow developers to accept payments outside of the App Store, as part of a major concession amid antitrust pressure,” the Washington Post incorrectly reported last night. New Headline Today: “Apple Loosens Developer Rules in Major Concession Amid Antitrust Pressure.”
And the real answer is … it’s somewhere between a big deal and nothing.
But the real one story is that this scrutiny of how Apple runs its store, and if it prevents companies from offering real competition to both the App Store and Apple-owned services like Apple Music, will not go away. If you are an Apple user who only cares about how much you have to pay for something like Spotify, this might be of interest to you.
And if you’re someone who cares about the power of big tech companies to make rules that affect millions of people around the world, it’s also worth a watch.
Here’s a quick version of the news: Late Thursday night, Apple announced a deal with lawyers in a class action lawsuit filed by software developers, promising to “make the App Store an even better business opportunity.” for developers, while maintaining a secure and reliable market. users love it.
There are several elements in the proposed deal – which has yet to be approved by a federal judge – but the most important is that Apple gives developers the ability to send emails to customers who use their apps on the devices. Apple’s iOS, and tell them they can save money by paying for things other than Apple apps.
The reason this is significant is that so far Apple, which takes up to 30% of the money developers make when they sell something through an Apple app, has not allowed developers to talk to customers about cheaper alternatives. Now they can.
So Spotify, for example, could sell a monthly subscription to its streaming service for $ 13 through an Apple app – but could then immediately email someone who signed up for that service to tell them that ‘he could get the same for $ 10 a month if he signed up on Spotify.com.
So now Spotify, which filed an antitrust complaint against Apple with the European Union, and Epic, which sued Apple for antitrust violations in the United States, get some of what they want: the ability to tell their own customers that they can go somewhere. other.
But this regulation does not improve That is business. They continue with their legal campaigns, for multiple reasons: both, for example, want to be much more direct about how they tell clients they can go elsewhere, by telling them in the app.
Right now, for example, if you are an iPhone user who wants to upgrade your free Spotify service to a paid service, Spotify just tells you that you cannot do it on your app, without any further instruction. on how to actually accomplish this. “We know. It’s not ideal,” the serve shrugs.
But Spotify’s beef with Apple goes beyond how it can advertise. Much of the music service’s complaint is that it has to compete significantly with Apple’s own music streaming service because Apple doesn’t have to pay an App Store tax on its own services.
Epic, meanwhile, wants more than the ability to direct customers to its own site. He says he wants to run his own app store within Apple’s App Store, and then eventually run his own competing app store. And Apple doesn’t want it.
Meanwhile, other critics argue that even Apple’s email franchise may not be so significant as it requires developers and users to take so many additional steps. Nowadays, just getting someone to open a promotional email takes a lot of effort; Think about your inbox and the clutter you regularly ignore.
If you are an Apple advocate, you can argue that the developers should be happy with any concession that Apple offers as it is about the Apple store and Apple devices and Apple should be able to do whatever it wants on its own. property. If you go to a Walmart, for example, you won’t find signs that say you can buy Tide for less at Target or Amazon.
Or, more charitably: you can say that the Apple App Store has provided developers with a huge market for iPhone and iPad users – “an economic miracle”, as Phil Schiller, Apple CEO, puts it. in Apple’s press release – and let Apple make the rules. around his own store seems to be a reasonable trade.
This whole debate underscores how Apple is now under pressure from developers and regulators, which is pretty new. Apple’s App Store was an afterthought – it only appeared a year after the iPhone debuted in 2007 – but over the years has grown into a major distribution funnel for developers and a true profit center for Apple, generating probably $ 15 billion in revenue last year. And developers have been complaining about App Store rules for at least a decade.
But Apple didn’t feel any pressure to move on until very recently. Now, however, as regulators and politicians talk about taming big tech in general, they’ve spent some of their time focusing on Apple and its store, and whether the company rules are too rigid. and anti-competitive.
EU regulators have previously said they believe Apple is violating antitrust rules, although they have not made a final ruling. Senator Amy Klobuchar has made Apple a prime target in her antitrust arguments – she co-sponsored a bill that would limit the way Apple and Google run their app stores. Via her press service, she says last night’s changes won’t be enough:
“As mobile technologies have become essential to our daily lives, it has become clear that Apple, along with a few other gatekeepers, has immense control in the app market. This power raises serious competition concerns and impacts consumers and app developers. This new move from Apple is a small first step towards addressing some of these competition concerns, but more needs to be done to ensure an open and competitive mobile app market, including common sense legislation to set the rules. route to the dominant app stores. “
State lawmakers, meanwhile, are stepping up their own challenges to Apple’s rules, and White House Biden seems very interested in pushing back the power of Big Tech in general.
Which means this is unlikely to be the last App Store concession Apple has to make. Whether he continues to make incremental changes or makes big ones, will tell us a lot about the motivation and effectiveness of Big Tech critics.