Apple defends App Store monopoly in 16-page report ahead of U.S. antitrust bills

The company's justifications don't always entirely hold up.

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Apple published a 16-page report explaining why opening up its mobile devices to competing app stores would be a bad idea. Titled ‘Building a Trusted Ecosystem for Millions of Apps,’ the report is another attempt by Apple to defend a practice that’s come under scrutiny by developers and governments.

Before digging into the report, it’s worth considering the timing. According to CNBC, the report comes as the U.S. government prepares to debate several antitrust bills that seek to reduce the power of ‘Big Tech.’ There are six bills in total, with policies targeting Apple as well as other tech companies like Amazon, Facebook and Google. With Apple, U.S. legislators are focused on the App Store and Apple’s rules about in-app purchases.

Apple currently permits one way for users to install apps on iPhones, iPads, Apple Watches and other mobile devices the company sells: the Apple App Store. Moreover, Apple completely controls the App Store and acts as a gatekeeper — any developers that want to make an app available on Apple mobile devices must gain the company’s approval by adhering to strict rules.

However, developers and competitors have taken issue with some of the rules and the ways Apple enforces them. In particular, Apple’s rules around in-app purchases have caused concerns for both preventing apps from using (or even telling users about) other methods of payments and forcing apps that use Apple’s payment system to give the company a cut of the revenue. Initially, Apple collected a 30 percent cut. The company has since lowered the cut to 15 percent for the first $1 million in sales an app makes before rising back to 30 percent.

Apple reiterates its favourite justifications for keeping the current App Store model

Apple’s 16-page report is like a list of the greatest hits of the company’s justifications for keeping the current App Store model. However, many of the justifications remain flawed, or worse, are just not true.

For example, Apple says that by restricting iPhone users to the App Store, it’s able to better protect them from harmful software. Part of that argument relies on Apple’s ability to vet incoming apps for possible harm, such as scam apps meant to defraud users, or malware meant to steal user information.

However, evidence shows that Apple’s vetting process often misses scam apps. A lengthy piece from The Verge details how Apple’s supposedly rigorous App Store screening misses blatantly obvious scam apps that charge users exceedingly high in-app subscriptions. Worse than failing to quickly catch and remove these apps, the scams use Apple’s in-app payment system, which means the company actually profits off them thanks to its revenue cut.

There’s also the accusation that Apple uses the vetting process to force developers to make changes in their apps that would benefit the company. For example, Apple blocked WordPress developers from updating their iOS update until they added in-app purchases last year. Apple later apologized and allowed the developers to update the app without adding in-app payments.

A similar issue happened with Epic Games and Fortnite on iOS. In an act of protest against Apple’s in-app purchase system, Epic added its own payment processing system to the game. Users were free to use Apple’s system but would get a discount for using Epic’s (the discount was effectively Epic passing on the savings of not having to pay Apple’s 30 percent App Store cut).

Despite violating Apple’s rules, the update passed through the company’s vetting process and made it to users. Apple later removed Fortnite from the App Store for adding the payment system, which kicked off the Epic lawsuit against the iPhone maker (the trial recently wrapped up, but we’re still waiting on the verdict).

Apple compares iOS to Android, takes aim at side-loading

Apple also compared iOS to Android in the report. Most of the comparisons relate to side-loading apps, which refers to the practice of downloading apps from somewhere other than the official app store and then installing them on your device. Apple lists several problems found with side-loaded apps, such as that these apps could bypass certain privacy protections, that they’re not vetted and could contain malware, and that apps could be pirated.

While those claims aren’t necessarily wrong, they’re also not exactly honest. Side-loaded apps aren’t always vetted by an authority — that is an inherent risk with them. But, as already mentioned, existing vetting processes are lacklustre at best and it’s entirely possible for things to slip through and get onto the App Store. In other words, there’s an inherent risk with downloading apps — the App Store is just lower risk.

As for bypassing privacy restrictions, it’s possible but unlikely. Both Android and iOS offer system-level APIs that apps interact with to access certain things. For example, your camera — apps need to interact with the camera API to access the hardware and take a picture. Privacy protections should exist at that level as well. Running with the camera example, users don’t have to worry about an app accessing the camera whenever it wants because the camera API prevents this — that applies to all apps, included side-loaded apps.

That doesn’t mean a malicious actor can’t try to bypass those protections and access a phone camera to spy on users. If someone found a way to bypass those protections, it’d be a problem both for side-loaded apps and apps downloaded from the App Store. The only real argument Apple has here is that its vetting process could catch apps trying to work around protections and keep them out of the App Store. And again, there’s no guarantee Apple would even catch an app trying to do that.

Apple also noted that side-loaded apps could share your information with third parties. But apps on the App Store already do that, unless you enable Apple’s new anti-tracking feature.

None of this addresses Apple’s behaviour

Perhaps the biggest problem with all of the reasons and justifications for not allowing side-loading is that they ignore why the App Store is an issue in the first place — Apple’s behaviour.

People generally don’t want to side-load apps; it’s much easier and more convenient to just open the App Store and download an app. The reason it’s an issue is that Apple wields an incredible amount of power through the App Store and developers have repeatedly accused Apple of mishandling or abusing that power.

I wrote about Apple using the App Store to punish developers that didn’t play by its rules above, but it’s well documented that Apple bends the rules to keep big players happy. For example, a previous U.S. congressional hearing revealed that Apple negotiated a deal with Amazon to get Prime Video on the App Store. The deal involved halving the revenue cut Apple took from in-app subscriptions.

Apple CEO Tim Cook testified before U.S. Congress that Apple “treats every developer the same” and that the deal was available to developers that met the conditions. However, Apple never officially stated what the conditions were. A group of news publishers later petitioned Apple for a similar deal to what it gave Amazon.

More recently, documents from the Epic vs. Apple trial revealed that the iPhone maker made several offers to Netflix to keep using Apple’s in-app subscription payment system. According to the documents, Apple initially considered punishing Netflix for removing in-app payments before deciding to woo the streaming giant with a special deal. Netflix ultimately removed in-app payments in December 2018.

And, of course, there’s the ongoing E.U. antitrust investigation spurred by Spotify. Along with the typical App Store fee complaints, Spotify accused Apple of leveraging the fee to undercut competitors with its own services as well as limiting certain platform features, such as access to the Apple Watch or HomePod, for third-party music apps.

Source: Apple Via: Engadget