This hearing went really, really poorly for Epic. The judge repeatedly told Epic's lawyers she wasn't particularly persuaded by their arguments with regards to several key aspects of their case. Epic's case hinges on being able to establish that Apple has a "monopoly" in the single-brand market of "iOS app distribution". However, the judge seemed rather unconvinced that a market definition consisting of only iOS devices was actually the correct market to analyze. If Epic can't establish that "iOS app distribution" is in fact a valid antitrust market, they're going to have a lot of problems with their case, as both their section 1 (tying) claim and section 2 (monopoly maintenance) claim rely on that market definition.
As an aside, I've read a number of comments here lamenting that the judge doesn't understand tech, but I think the opposite is true as well: many of the commenters here don't understand the law. The judge needs to work within the framework of existing legal precedent when making her decisions, and unfortunately for Epic, it doesn't really seem like existing precedent is on their side.
As a specific example, many of the comments here point out that smartphones are not like gaming consoles because smartphones are general-purpose computing devices whereas consoles are entertainment devices. Be that as it may, there's nothing in US law that says general-purpose computing devices are supposed to be treated differently than other products for the purposes of antitrust analysis.
I wonder if the existing law is capable of dealing with the current situation. It seems crazy to me that anyone considers the mobile market sane or good for users and developers.
Think about it.
The average person has a smart phone where they only have access to 1 store. The arguments about sideloading on Android are somewhat moot IMO because the severity of warnings and effort to discourage users from sideloading are highly effective and, when combined with no one changing the defaults, the vast majority of people stick to the play store.
On the other side there are the developers who MUST deal with both companies. There is no choice. You can't build an app with a mobile component and ignore 1 of the only 2 distribution platforms. Why would I risk major R&D costs to develop anything novel or disruptive when I have no guarantee I can distribute that product and might even be facing a hostile distributor if my product disrupts them?
Does anyone think having 2 massive incumbents controlling distribution for a mode of computing that's become essential to western life is healthy? How is the market not going to devolve (even more) into a bunch of low effort skinner box IAP trash?
And the game console analogies are dumb. I don't need a game console. I don't have one. However, I NEED a mobile phone to participate in modern society. Try getting and keeping a good paying job if you don't have a mobile phone and are "unresponsive".
> I like that iOS takes a heavy handed approach to the App Store and controls it completely.
This is fine, even good as you say, but the problem is there are no other options.
Apple can arbitrarily kill an app you rely on as a user, and you have no recourse. It'll stay on your device but you won't get updates or be able to reinstall later.
Any friction and costs applied to devs will flow on to costs for the customer.
So that's the harm to users, which is hard to quantify.
> anti trust law is to protect me as a user not you as a developer.
Are you sure? Standard Oil set good prices for consumers. The issue was they drove other businesses out of business. Restraint of trade was a big part of it.
Ah interesting. I don't think I'd agree with that because if all competition is nuked and prices are nice today, it's still a lot harder to rebuild a healthy ecosystem if/when it gets abused down the line. Whether intentionally or through stagnation.
I'm not saying we should look at just one or the other, but both should be weighed and considered.
In Australia we actually have a bit of a problem with a supermarket duopoly, who have apparently coincidentally both decided to sell house brand milk very cheaply (IIRC $1/L). This has upset a lot of farmers and producers as it decides a large amount of their revenue. I'm not sure what our legal landscape dictates, but it certainly seems unfair and anti-competitive even though it is really good for me personally.
> Apple can arbitrarily kill an app you rely on as a user, and you have no recourse. It'll stay on your device but you won't get updates or be able to reinstall later.
This has happened to me with adblockios and several other apps earlier.
What if a competing app store was "Grandma's App Store" and it had extreme moderation plus a huge cash bond that developers had to put up before being allowed on the store so you could install it as the exclusive store on your grandparents' phones and never have to worry about malware or semi-legit data exfiltration like contacts mining?
Or how about a highly moderated local store for my city where you need to be a resident and provide proof of owning a local business before being allowed on the store? That could be highly moderated and provide a ton of local business discovery with almost no risk of bad actors because being kicked off that store would mean a loss of local patrons.
Why is it automatically assumed competing app stores are going to be trash and why does everyone think Apple / Google are doing such an amazing job right now? Neither seem to be the case IMO.
I think your viewpoint focuses a lot on "what's good for me right now today" rather than "what's good for the long term health of these platforms?" Demand aggregation platforms, especially in industries with only a handful of huge players, are going to be bad for both suppliers and consumers.
You can already see it on every huge platform. The platform (aka distributor / allocator) doesn't care at all about either side. They only care about their share of the market as a distributor. Suppliers become a commodity because losing a supplier is minor churn with no real impact. It doesn't matter which 1 million developers you're dealing with as long as you have 1 million developers, so you might as well optimize for the developers that will accept the smallest profits and the most abuse.
On the consumer side it's the same thing. It doesn't matter which 100 million users you have as long as you have 100 million users. Banning 1 million users isn't a big deal because the platform isn't going to suffer as long as new users are coming in. It might be 1 million users that a specific supplier (aka developer, creator, etc.) relied on for their livelihood, but who cares, right? There's another supplier in line to take their place anyway. And so what if 1000 of those users banned were false positives right? That's only .001% of your user base. Tough luck for them if they lose access to an account they might depend on.
It really worries me to see the number of people that can't see beyond their own convenience to recognize the only winners in the current system are the platform owners. They don't care about you, developers, creators, gig-workers, etc. beyond how many of each they have.
I don't think Epic is trying to force their store to be installed by default or to be able to bypass existing iOS sandbox/security mechanisms? So you can continue using the Apple App Store exclusively and reject apps that don't offer Apple Pay?
> Apples policies probably result in developer harm, but anti trust law is to protect me as a user not you as a developer.
Except that it does only as long as Apple decide to "protect the user", which is why antitrust laws are in place. Monopoly are illegal both for good and bad companies, their standard doesn't change that.
> I do not want developers to hav the option to have their own payments. Apple Pay is so easy and convenient.
> I do not want developers to be able to distribute apps without Apple approval.
I wouldn't be against that the App Store require theses, if there was an alternative for the App Store.
This kind of walled garden in the 80s led to apple losing ground to microsoft and a chant for developers, developers, developers.
Microsoft was forced to provide options for multibrowsers and limit it's paint application from competing with photo editing software.
All of your problems are solved with opt-in to secondary app sources. If you want the apple approved walled garden, don't install the alternative and retain all the benefits of percieved security.
What's wrong with letting people install a different app store, and apps? Was firefox worse than internet explorer?
The entire reason there is a walled garden at all is the pre-iPhone landscape.
Pre-iPhone, the phone software landscape that most consumers interacted with was absolutely awful. Carriers loaded phones with all sorts of pre-installed, uninstallable junk. Most third-party software was also not very good. iPhone uptake was so large in 2007 because Apple put its foot down on all the carrier cruft.
> What's wrong with letting people install a different app store, and apps?
You would end up with something similar to downloading games on Windows: Every big company will force you to use their own app store to download their software which has absolutely no benefit to the end user.
I want to install and use an application, not an app store.
This shows so much of a misunderstanding of history it’s hard to know where to start.
The Macintosh was in no way closed in the 80s. How could it be? There was no memory protection, and you could hack at the system and make it do all sorts of things via extensions.
There were plenty of third party compilers. In the early 90s, developers didn’t even use Apple’s toolchain. For the most part they used MetroWorks.
Under Gassee (founder of Be) they went after margins instead of going after market share. Jobs said that himself when he came back.
Microsoft was also never forced to provide options in the US.
> I wonder if the existing law is capable of dealing with the current situation. It seems crazy to me that anyone considers the mobile market sane or good for users and developers.
Think about it.
I see this posted sooooo often and every time I just say "nope, it's exactly what I want and I do not want it to change for iOS".
Very pleased to see Epic starting off poorly here. Hopefully this all goes up in flames for them.
>I don't need a game console. I don't have one. However, I NEED a mobile phone to participate in modern society. Try getting and keeping a good paying job if you don't have a mobile phone and are "unresponsive".
They are not analogies. This case is centered around video game distribution. The comparisons are, in that respect, spot on. What job do you have that requires you to make in app purchases in a video game?
The point is that what applies to Epic applies to all the other apps on iOS too. What applies to consoles applies to everything on consoles, but you don't need a console. You do need a phone.
> What job do you have that requires you to make in app purchases in a video game?
If it were just games on iOS I wouldn't care at all about it. They could do whatever they want.
It's business / productivity apps where I think it's a bad deal for everyone but Apple / Google. About 10-15 years ago I used to get a decent number of referrals for small businesses that wanted to turn part of their business process into an app. At the time mobile wasn't huge, so a single desktop app was the only thing on anyone's mind back then.
At that time, I told everyone it wasn't worth spending their money to have a custom app built for some small back office process they wanted to simplify. However, at the time I believed app development was going to evolve to the point where it would be practical to do that type of thing.
Boy was I wrong. Mobile happened and the rest is history. Now it's even more expensive to develop an app because you actually might need to develop 2-4; iOS, Android, Windows, Mac.
Web apps really took off because of that, but I think it was more of a result of being "un-block-able" than being the best technology. Thinks like Adobe Air and JavaFX come to mind as better technologies. JavaFX especially comes to mind because it was (and still is) possible to set up a pretty nice development process with it. However, it never really went anywhere which is a combination of Oracle sucking and Steve Jobs wanting to "kill" Java.
If iOS was an open platform and Oracle could have put JavaFX onto it, we'd have a _significantly_ different app landscape today. IMO we currently have "lesser" app ecosystems as a result of the locked down platform(s) IMO.
Getting back to my boutique app fantasy, I don't think it'll ever be possible without changes to platform policies. With the locked down app stores I can't _guarantee_ a customer I can deliver an app for them and I can't risk the cost on my own. There's also a perception that you _need_ an app even though something like a PWA would be fine for most LoB apps. A lot of apps are just web apps wrapped in an app bundle, but being on the app store is what's needed to be successful. Apple's not really doing anything for the developer in those cases except giving them permission to have their wrapped app appear on the app store.
Fantrax is a good example of a pretty solid PWA where they had to have "apps" as a result of popular demand even though there's not much difference between their PWA and the "app" AFAIK.
Even with PWAs though you need to (in effect) rely on Apple's blessing because they control the engine on their platform.
> there's nothing in US law that says general-purpose computing devices are supposed to be treated differently than other products for the purposes of antitrust analysis
Other products include Macs and PCs, which allow "sideloading" by default, out of the box. Why are game consoles the relevant comparison? There's nothing in US law that says smartphones are supposed to be treated the same as game consoles.
iPhone was not originally a game console. (Apple itself almost never makes games.) Indeed, iPhone was not originally a store either. Apple argued in court that App Store is not a separate product from iPhone, but that's easily historically refuted: iPhone shipped in 2007 without App Store! App Store was added a year later, so it's obviously not essential to the product. And IAP aren't essential to App Store either, because they weren't added until 2009.
It was developers like Epic who showed iPhone could be a gaming platform. Apple itself has a pretty poor history at gaming, and the Mac has always been subpar compared to Windows.
> iPhone was not originally a game console. (Apple itself almost never makes games.) Indeed, iPhone was not originally a store either. Apple argued in court that App Store is not a separate product from iPhone, but that's easily historically refuted: iPhone shipped in 2007 without App Store! App Store was added a year later, so it's obviously not essential to the product. And IAP aren't essential to App Store either, because they weren't added until 2009.
The failure in your reasoning here is your assertion that the iPhone that was launched in 2007 is the same iPhone that's about to be launched in October.
They are different products.
The iPhone 12 DOES launch with the App Store. If Epic wants to make it so any iPhone(s) that didn't originally launch with the App Store must be able to side load apps, I mean, go ahead.
> Why are game consoles the relevant comparison?
Why aren't they? In fact, I'd argue they are even MORE of a relevant comparison and MORE like a general purpose computer. Sure, Microsoft has not written Office for Xbox, but that's not a limitation of Xbox. You can (and this is encouraged) plug a keyboard and mouse right into an Xbox. It has a GPU, processor, hard drive, RAM, motherboard, etc.. It's literally a computer.
> There's nothing in US law that says smartphones are supposed to be treated the same as game consoles.
There's nothing in US law that says smartphones are supposed to be treated like desktop computers either. I have yet to see a convincing and consistent reason that they should be. I guess if you want to say that all computing devices should be open source and modifiable and all that, sure that's fine, but the distinction here is very much an arbitrary one.
PCs are availble from lots of different brands, you can even build your own from components. Game consoles are developed, built and produced by one and only one company: You can't buy an Xbox compatible console not from MS, neither a Playstation compatible device not from Sony. And you can't build your own. Therefore, the developer has to shoulder all the R&D and associated costs upfront. For game consoles we are accepting that the developer should be able to recoupe that cost by getting a share of all games sold. We even accept the idea that some consoles are sold at a loss.
For PCs, there is no central developer shouldering all the R&D costs. You can choose Windows as an OS, or some Linux or even (not legally, but technical) macOS. Lots of licensing and cross marketing deals going on. ("Intel inside," anyone?) You can build a single PC or a series of 50 or 50.000 without much R&D cost (but you won't have an ecosystem or a loyal user base you can control and monetize).
But you can't build an iPhone or iPad compatible device, nor can you buy one without an Apple logo. So, iPhones are in that regard far more comparable to game consoles than 08/15 PCs built from standard components. And it seems kind of consequential that Apple wants to be able to get their share from everything that uses their R&D (and platform and user base).
Being subpar has nothing to do with it, that's for the customers to vote with their wallets.
> For PCs, there is no central developer shouldering all the R&D costs.
I'm not sure how R&D costs are even relevant, legally. PCs, Macs, iPhones, iPads are all financed by hardware sales. That's how you repay R&D, not skimming money off of 3rd party developers. Somehow PCs and Macs have always paid for their own R&D without taking 3rd party developer revenue.
And the judge didn’t agree with the theory that Epic proffered that how it is financed should be the distinction.
But if that’s the case, who “finances” the extra four or five years worth of support that iOS devices get over Android devices? Maybe it’s that Apple knows by having more people running the same OS it increases the market for apps. Android OEMs don’t have the same incentives.
The argument was that game sales fund consoles that are sold at a loss.
No one would claim that Apple sells at a loss. But, continuing support for six year old phones is solely motivated by service revenue - just like consoles.
The underlying point is that it doesn't really matter (from a legal perspective) whether smartphones are more like PCs or game consoles when answering the question of whether it should be legal to sell "walled garden" devices.
I mean, it kind of is. If Epic's theory is correct and they win their case, that essentially implies that the "walled garden" approach is illegal and will prohibit hardware manufacturers from tightly controlling what software can be distributed on its hardware.
No. This lawsuit would have been thrown out in 2008 or 2009. Size and market power matter. Apple has over 50% of the US smartphone market and most of the smartphone software revenue.
There are over 2 millions apps in the App Store. That's a gigantic market. Game consoles only have ~2000 titles. App Store isn't a "garden", that vastly understates its extent. Apple has dictatorial control over literally millions of third-party products. That's dangerous.
Except Epic's theory of the case is not that Apple has a monopoly over smartphones, rather they have a monopoly over distribution of apps on iOS devices. Which would have been true back in 2008 or 2009 as well. If Epic wins their case based on the reasoning they have presented to the court, the same reasoning will apply to all "walled garden" hardware.
It's important to keep in mind that this was merely a preliminary hearing, not the full trial. It was abbreviated by design. The entire thing was a couple hours at most? The only question at issue here was temporary injunctions. Nobody had time to present their full trial arguments.
Sure, the hearing yesterday was about the preliminary injunction. But Epic's arguments have been made in detail in their extensive filings with the court.
> Other products include Macs and PCs, which allow "sideloading" by default, out of the box. Why are game consoles the relevant comparison? There's nothing in US law that says smartphones are supposed to be treated the same as game consoles.
Both companies are interested in setting precedent. There are procedural advantages to bench trials. For example, bench trials require the presiding judge to stipulate findings of fact while jury trials don't. Jury trials are, therefore, much more difficult to appeal. Additionally, appellate courts are afraid to overturn jury verdicts because the standard to do so is so high.
Most corporate litigators are aware that once it leaves the room with the jury one side is most likely f-u-c-k fucked on appeal.
I support Epic in this fight, but I agree with the Judge that "market" definitions in casual conversation have become so narrow as to be meaningless. I regularly see posters here unironically assert examples such as "general-knowledge search engine ads", "image-based social media", etc.
Anything can be a monopoly if you arbitrarily define its market as congruent with its market share.
> The judge repeatedly told Epic's lawyers she wasn't particularly persuaded by their arguments with regards to several key aspects of their case.
It is a bit more complicated than that. This was the preliminary injunction stage of the trial.
It is more that Epic did not pass the very high bar that it is so very likely to win the case, such that they should be able to force an injuction to happen right now.
That is a very high bar to pass, and it is more that the judge is not willing to effectively declare epic the winning, right now, all on her own.
Instead, the judge has said that she wants this to go to a jury, and that this is no ordinary case. She said that it is an extrordinary case, that is on the bleeding edge of technology monopoly law, and basically, that such an important case should not be decided by a judgement from the bench.
Or at least this was my impression of what she was trying to say, when I was listening to the trial live.
Which I agree with. I expect this to be a landmark technology monopoly case that is going to make its way all the way to the supreme court. As such, it would be inappropriate for the judge to basically decide the winner so early by enforcing an preliminary injunction, even though I ultimately believe that epic will win.
This is a very ballsy decision by Epic, forgoing significant iOS revenue in the hopes of eventually reclaiming some or all of that 30% app store tax.
I wonder how much of this decision was unilaterally made by Tim Sweeney. He is quite vocal about how much he hates the 30% tax (Valve included) because the vast majority is just profit and not for services rendered. It's excellent ammunition for his case to demonstrate that his storefront only charges 12% and is still profitable.
Question, if Apple were to lose the first trial would they be forced to allow Fortnite back on the App Store while the endless series of appeals follow?
1. Epic spent the first hour of the hearing arguing that the relevant antitrust market was the "iOS app distribution" market. The judge pushed back hard on this because there were alternative distribution channels available to Epic, saying: "I know that's how you want to frame the issue... I'm not convinced that you have."
2. With regards to Epic's tying claim, she said she was not particularly persuaded with their section 1 argument. Referring to IAP, she said: "I just don't see this as a separate and distinct product."
Those points imply she is unlikely to conclude that Epic has met the threshold of likelihood to succeed on the merits to win the preliminary injunction, yes. But they will also be considered during the trial itself.
> Instead, the judge has said that she wants this to go to a jury, and that this is no ordinary case. She said that it is an extrordinary case, that is on the bleeding edge of technology monopoly law, and basically, that such an important case should not be decided by a judgement from the bench.
It's baffling to me that we have still have this ridiculous idea that a lawsuit that's legally and technically complicated should be decided by people who haven't the first clue about the law or technology.
Civil suits shouldn't be tried by juries. Yeah, I said it, and I'll say it every time I'm in voir dire when I'm drawn into a jury pool for a civil suit. We should reserve it for times when a person's freedom or life are on the line, legally, but people fighting over money in complex legal arguments should be decided by legal and technical experts.
But what would we do if all those legal and technical experts came up with a framework that the general population believed was obviously unfair?
In the current framework, nothing. They're built right into the system. It's a pretty core principal of government operating only by the consent of those governed.
> But what would we do if all those legal and technical experts came up with a framework that the general population believed was obviously unfair?
We have lots of issues in the US that some people feel are unfair, and we've been pretty successful approaching those problems through the democratic process rather than picking some randos off the street to decide them.
>We have lots of issues in the US that some people feel are unfair, and we've been pretty successful approaching those problems through the democratic process rather than picking some randos off the street to decide them.
Err, the democratic process is about giving an equal voice called the vote to all randos off the street. (Not that it's implemented particuraly democratically in the US).
Not to mention that the original Athenian Democracy did just that: used (alongiside voting) the election of random people off the streets as a counter-measure for representiveness.
> Err, the democratic process is about giving an equal voice called the vote to all randos off the street. (Not that it's implemented particuraly democratically in the US).
The US system is designed to make randos off the street feel like they have an equal voice (so they don't revolt and can be blamed for the failings of government) while actually heavily insulating the country from legislating their wishes.
Originally only one half of the bicameral legislature, and no other branches, were directly elected. Even now only one branch is directly elected.
The Athenians were a human rights nightmare and their economy was based on human trafficking. Even if a tiny minority of the population had some say in the rule of law I wouldn't look to them as something to aspire to.
> But what would we do if all those legal and technical experts came up with a framework that the general population believed was obviously unfair?
Vote for new representatives to change the laws.
Technically speaking, as a jurist you aren't supposed to make a decision based on fairness instead of the law, and if you state that you will, you will be removed from the jury or held in contempt. Jury nullification, which you're suggesting as a strategy, isn't intended to be legal, its just unpunishable.
> Jury nullification, which you're suggesting as a strategy, isn't intended to be legal, its just unpunishable.
It's ironic that the whole point of the jury system is to enable jury nullification, and yet those are the magic words that will immediately get you out of jury duty. I wish there was a simple checkmark on the jury summons form that says "I know what jury nullification is and intend to use it," it would save everyone a lot of time.
Unpublishable is a strange description for a concept that was intentionally made the core feature for the system.
Having a jury means that political leaders can’t, on an ongoing basis, have courts make decisions that the general population disagrees with. That’s literally the point.
I believe you misunderstood how the process works. Plus, I saw this as working out as Epic had planned.
Yes, the judge Gonzalez Rogers said that she is not convinced enough by Epic's claims to force an injunction onto Apple, which would require Apple to immediately reinstate Fortnite into the app store and leave it there until the legal proceedings are finished.
But did anyone really expect that Epic can use the fast track to force Apple to continue distributing Fortnite while forfeiting the 30% before even going to the main trial? Sure, Epic requested that, but that doesn't mean that they reasonably expected to get it granted, too. Such a large case will almost never be settled pre-trial without an official jury.
So her rejecting the injunction is kind of how this normally works.
According to CNN, she also said "Fortnite players on iOS have a variety of choices to access the game even if it is no longer available on iOS" as the main reasoning as to why Apple's action is not illegal tying of App distribution to In-App payments. And then she said that she wants to hear what the public thinks.
So effectively, the stage is now set for Epic. They need to manufacture a large enough outcry by regular consumers about Fortnite being absent on iOS. And they need to do so before the trial in 2021. And to me, it looks like Epic has been very effective so far at making people speak out that they would have wanted Fortnite on iOS.
The judge also said "It's hard to ignore the economics of the industry, which is what you're asking me to do." when comparing the iOS app store to other walled gardens like Xbox and PS. I'd treat that as a friendly hint that Epic needs to show that game consoles and smartphones are not comparable industries. That should be easy, because smartphones are essential for everyday life. Game consoles are not.
And lastly, the judge also said "There are a lot of people in the public who consider you guys heroes for what you guys did, [..]". To me, that sounds like an acknowledgement that the general population does not support Apple's reaction, meaning that Epic is on a good path towards showing that iOS consumers in general do NOT have alternative ways for accessing Fortnite.
My observation extends beyond the preliminary injunction itself which was always going to be a long shot. Epic's entire case depends on being able to successfully plead a single-brand market consisting of only iOS devices. Yes, you are correct that whether Epic wins or loses the injunction now won't necessarily affect the outcome of the trial. However, failing to establish a single-brand market will.
So to the extent that the judge is unconvinced of the validity of a single-brand market now, is not good news for Epic's chances during the trial later.
iOS users have already moved on to the next hyped app. There is no “outcry” from iOS users. Epic even admitted that less than 10% of Fortnite players are on iOS.
Are you claiming that all of the articles that quoted the judge are biased?
I assume Epic endgame isn't this trial. Winning would be nice, but loosing might help show the need for new legislations. Also, the US is only one jurisdiction.
> However, the judge seemed rather unconvinced that a market definition consisting of only iOS devices was actually the correct market to analyze... As an aside, I've read a number of comments here lamenting that the judge doesn't understand tech, but I think the opposite is true as well: many of the commenters here don't understand the law.
I mean this is probably a good case of "the law doesn't understand the law" in that the law does not have a particularly useful definition of what constitutes a "market"
How important are the nuances of law exactly? The talk right now is stacking the Supreme Court with 6 conservatives can give a contested elections to conservatives and overturn Roe v Wade etc.
Not to mention how laws impact demographics differently.
Without knowing anything about laws specifically, this makes it seem like it isn’t very concrete. At all.
The Supreme Court may be the endgame of this trial. Maybe that's why they don't care about the jury. It'll doubtless be appealed no matter who wins, so does the outcome even matter?
They do advertise the ipad like that. But that is a ridiculous marketing statement imo. You basically can't install any software. Heck even the web browsers are safari with skins because the actual web browser cannot run on it.
I think you mean "you can't install any software you want" and your parent means "you can install lots of pre-approved software" and you're both right.
At the same time I don't think installing arbitrary software is an essential feature of a laptop. These days most users rely on app stores or package managers.
Apple's iPad has been marketed as a laptop replacement and with its smart keyboard and the amount of apps it doesn't seem a long shot to me.
It's a laptop replacement for some people, some of the time. Which imo doesn't make it a laptop replacement. Because it would make phones from 10 years ago also a laptop replacement for some people, e.g. Teenagers who only use a web browser and some social media.
The key feature of a laptop is that you are guaranteed that it can do what you want. Even if you haven't thought of it beforehand. For example, a photographer buys an ipad pro. She reasons it should be fine since Adobe photoshop has been deemed worthy by Apple. For the first couple of weeks she is happy but then she wants to do some 3D work in bender. Oops blender isn't available on ipad and there is no way to make it work. Her laptop replacement isn't a laptop replacement at all since now she needs a laptop as well to run blender.
For almost every person such a scenario is certain to occur at some point. If Apple markets it as a laptop replacement it should be able to replace a laptop at all times.
Interesting to see the judge bring up the same points that so many have here on HN, myself included. I've read a few articles about this topic, not just this one, but some good points I saw from another article [1]:
> Judge Rogers questioned Epic on when, exactly Apple became a monopoly given that its App Store rules have remained unchanged since the App Store launched, which Epic had no solid answer for, responding only that it was a monopoly when Fortnite came to iOS in 2018. She also said that walled gardens have existed for four decades and that what Apple's doing isn't too different. "They created a platform," she said
> She also reiterated that Epic Games made a "calculated decision" to defy Apple's App Store rules, and the court doesn't provide injunctions for contractual disputes. Epic was "not forthright," she said. "There are people in the public who consider you guys heroes for what you did, but it's not honest.
> Epic Games continued to argue that Apple has an App Store monopoly and charges excessive fees, but the judge pointed out that the 30 percent rate that Apple collects is the "industry rate" collected by PlayStation, Xbox, Nintendo, Amazon, Walmart, Best Buy, Google, and more. "It's all 30 percent and you just want to gloss over it," the judge said to Epic's lawyers.
I don't remember where I read this but someone mentioned that the judge asked Apple why they charge 30%, which I found to be a bit of a strange thing to ask (and probably a bit of a softball). Why not 30%? Why not 40%? Why do companies have margins that they set that the market will bear at all? Etc.
What's illegal is taking advantage of your monopoly position. Microsoft was a monopoly? That was fine. Microsoft forced people towards Internet Explorer? Trouble.
Microsoft at the time owned 90 percent of the entire computer market.
The only thing Apple has a monopoly on is things Apple sells. If it is deemed that you can have a monopoly of a subset of a market, ask yourself how this will be applied to other businesses in the future. Does a mall have a legal (not colloquial) monopoly on stores in the mall?
Edit:
If you make a game that has a store in it, do you have to let others sell thing in your game’s store. You have a monopoly on things sold in your game. Your game is a platform.
As someone who develops on these platforms, the problem is how difficult it is to get true figures for market share.
If you just search "Apple vs Android market share" you get an incredibly false picture of reality.
Android isn't just Android. It's everything from a flagship like a Galaxy S20 to a "Galaxy A2 Core" destined for low-income markets that was never meant to compete with an iPhone, and for which most app's target markets might as well not exist.
I remember a conversation with Jake Wharton where he insisted it was fine for apps to adopt the iOS strategy of dropping older OS versions extremely quickly. His reasoning the devices that have owners who spend the vast majority of money on the platform have newer devices that get updates.
To some degree he was right (not enough to excuse the absymal Android update ecosystem but I digress)
We've reached the point where even things that are comparatively used as "semi-dumb phones" show up under Android figures because of how ubiquitous of an OS it is. There are a ton of Android devices out there that are 3 or 4 major versions behind, leading a lot of developers to support them.
But if you actually look at top app revenues' (of which I've seen a few now), they consistently might as well not exist.
-
For that reason, if we actually shave that down to people who are paying into the app ecosytem (ie. look at the customers of the app developers, not the customers of the phone manufacturers) , suddenly you realize why so many apps and games go iOS-first for development:
It's no contest, Apple dominates the market for actually making money off apps. Because it's not just that Apple is making more gross revenue, it's the fact they're doing it with a third of the installs(!!!)
It's a one-two punch against Android devs since, as installs scale, support and review problems scale, while revenue is not scaling at all with it vs iOS.
It's a reflection of what I mentioned above, just how many Android devices are really not iPhone competitors, and not catering to a demographic that spends money on apps.
The average developer is making many times what their Android equivalent is making per app. You can make money on Android, but if you're blocked off from iOS, you're hurting in a huge way.
Yes but the 30% cut (which is supposedly taking advantage of their monopoly) existed from the very beginning. They didn't eventually become a monopoly and then up prices to extort money from developers. From the very start they charged 30%, and despite of that fee, they still gained a huge market share. I would argue that because they were able to gain a monopoly without changing their fees, that the fees are not taking advantage of monopoly whatsoever.
It is not a monopoly. You are spinned. The answer is key. Can’t be monopoly like this legally. Otherwise you may be charged of monopoly of selling coffee in your backyard as only you can do it.
Not just that, to be honest Apple App do not spill over even. You do not need to run in Apple store unlike in 1990 you basically have to run windows.
> > Epic Games continued to argue that Apple has an App Store monopoly and charges excessive fees, but the judge pointed out that the 30 percent rate that Apple collects is the "industry rate" collected by PlayStation, Xbox, Nintendo, Amazon, Walmart, Best Buy, Google, and more. "It's all 30 percent and you just want to gloss over it," the judge said to Epic's lawyers.
She also glossed over the fact that software can be distributed free with its own payment systems in laptop/desktop OSs like Windows, OS X, Ubuntu etc. When I paid for Sublime I didn't go into an App Store to pay for it.
Smartphone/tablet OSs are logical successors to the laptop/desktop OSs we have not game consoles. They are general purpose computing platforms.
> Smartphone/tablet OSs are logical successors to the laptop/desktop OSs we have not game consoles. They are general purpose computing platforms.
Game consoles are general computing platforms as much as anything. Like Apple's devices they are artificially restricted with a walled garden model.
"I own this device, therefore I should be able to run anything I want" is an argument I can understand. "Company X invented this platform and therefore can choose what to allow to run on it" is also an argument I can understand (though I disagree). What I can't understand is this argument that Apple specifically shouldn't be allowed to restrict software but game consoles should.
> What I can't understand is this argument that Apple specifically shouldn't be allowed to restrict software but game consoles should.
If it was upto me, I would even argue for fairer rules there. Right now, it is Apple and they are sitting on a much more important computing platform for developers in terms of value, so I am fine if companies concentrate their efforts on iOS. If a precedent comes from this that can be applied in other places, I am all for it.
I think you're lumping contractual EULAs with technical limitations and they're not the same thing.
If I bought a system that I am technically able to install anything I want onto, I don't think courts should enforce a EULA that forbids me from doing so.
But that doesn't mean I think the courts should forbid the manufacturer from implementing technical controls to stop unapproved software from being installed.
Those are two very different things, and the courts should treat them differently.
For one, there are consumers who buy iOS devices explicitly because they are hardened against unapproved software. Comparing the amount of malware on Android with what is on iOS proves that this is not an irrational decision.
I don't choose to buy a device like that, but I don't want courts saying that companies are not legally allowed to make such devices.
I can use that screwdriver to try and hammer in a nail, sure. It probably won't work well and I'll likely break the screwdriver or the nail or the other purpose they're both serving.
That's not the fault of the company that designed, manufactured, and sold the screwdriver, though.
But they won't stop me from doing that either. But they did design the Phillips screwdriver to work optimally with Phillips head screws, so that's what I actually bought it for and use it for.
The EULA doesn't prevent you from wiping your iPhone and doing anything with it. It's your hardware. You won't see any warranty help after that, but that's not their problem at that stage. You can even try to use your iPhone as a hammer, but I wouldn't recommend that either. It wasn't designed that way, but you're totally free to do so.
Personally, I bought my phone to use it the way it was designed, because I liked the design—not in spite of it.
> Game consoles are general computing platforms as much as anything. Like Apple's devices they are artificially restricted with a walled garden model.
This is true that game consoles are walled gardens. But the question is, what is the market like for game consoles, when you compare common substitutes, as compared to what the market is like for smartphones.
I would argue that the game console market is much less concentrated than the smart phone market.
Anti-competitive practices are only illegal if a company has significant market power. And, IMO, Apple has much more market power than playstation, given that Apple controls about 50% of the smartphone market, in the USA.
> What I can't understand is this argument that Apple specifically shouldn't be allowed to restrict software but game consoles should.
The reason is because Apple controls half the smartphone market, in the USA, whereas game consoles don't have that much market power, especially, if one were to claim that the PC market competes with game consoles. (Which I say that it would. And I would also not say that smartphones compete with game consoles)
Apple's actions only become illegal, because of the combination of both their actions, and the fact that they have significant market power.
> Game consoles are general computing platforms as much as anything.
By their technical base, yes, but not by their usecase.
Consoles have games and apps for media-consumption, but no apps for working, managing your life or other stuff. They are limited in the category of apps they allow, while smartphones and tablets are free for everything (even though they have some restrictions on the type of content they allow in their own app stores).
Your argument is circular. Game consoles don't have "apps for working, managing your life or other stuff" because they are controlled by a walled garden that prevents that kind of software from being developed. You're essentially saying "they're a walled garden, so they should be a walled garden".
Maybe your attention is circular, when you can't even think outside of a single comments.
The discussion is about smartphones, not consoles. And I explained that the technical base is irrelevant for whether it's a walled garden or not, because the purpose and usecase are different. Smartphones and Consoles are both universal computing platforms, but only consoles are also used as a universal device, while consoles are walled by design/purpose. So consoles being walled gardens has no relation to whether smartphones should or should not be walled gardens.
>Smartphones and Consoles are both universal computing platforms, but only consoles are also used as a universal device, while consoles are walled by design/purpose
This is a very loose concept that you are arguing should be law. Fine, smartphones are "universal computing" platforms. Tablets are mostly used for media consumption - is the iPad exempt? If a manufacturer releases a Windows PC and calls it a "Home Theater PC", are they now exempt from the "universal platform" rule? If Sony allows users to install other OSs on their PlayStation, the PlayStation now a "universal device"? If a developer releases a calendar application or Slack on the PS4, will the PS4 be converted to a "universal" device?
Or now that we have this carve out for "universal platforms" should Epic continue to pay the Apple 30% because it's a "gaming app"?
Everyone knows judges and lawyers are widely respected among fisherman for their deep and nuanced understanding of bodies of water and the organisms that reside within them.
This argument is a fallacy as they all have assistants and do research before making their case/ruling. Replace tech and fishing with any activity you like and the fallacy remains and remains obvious as that.
If you think "a judge said [X] about tech issue [Y] so you should just take their word for it" is a valid way of arguing a point on HN, I don't know what to tell you :-)
That isn’t what I was arguing I’m arguing that it’s the job of judges and lawyers to be as informed as necessary and that they do their due diligence for each case. To pretend modern tech is an example of the one field where the people in charge of creating precedent can’t do that job is a fallacy.
So if you don’t trust the court’s competence to decide legal matters around tech, why would you trust legislatures to pass laws? Are legislators smarter when it comes to tech?
I bet there are people on Law News somewhere who are silently reading HN shaking their heads about how the geeks don’t understand the nuances of the law....
The main selling point of game consoles are uniform hardware specs and knowing that the console can run all games released on it. That isn't true for phones.
Maybe not in the Android case, but in the iPhone case, it is pretty much true and there are clear ways to deal with the variances in capabilities between iPhone models. It's a much more predictable platform than for PCs or even Macs.
It isn't true in the iphone case either, they don't create a new appstore when they release new hardware generations so they don't check if apps works fine on older hardware nor do they guarantee that the software you buy in their appstore continues to work after updates. Instead it is up to the software provider to update things when Apple breaks their product and to inform the user of which phone can run the app.
s/games/software and this could be a quote from 5 years ago about how nice it is to develop for iOS because of its uniform hardware and how long Apple supports their devices.
We can go back and forth naming differences between phones and consoles: phones are smaller and have cellular chips, consoles are usually connected to TVs -- but if you can't say why a difference is so fundamental that they should be treated as entirely different classes of things then it doesn't matter.
>We can go back and forth naming differences between phones and consoles: phones are smaller and have cellular chips, consoles are usually connected to TVs -- but if you can't say why a difference is so fundamental that they should be treated as entirely different classes of things then it doesn't matter.
Here's the fundamental bit:
For the vast majority, it's the primary (often only) way to connect with friends, family, colleagues, employers, news, government services, education, wayfinding, banking, emergency services, the entirety of the worlds information, and the world economy.
It also contains peoples most personal thoughts, search history, intimate conversations/photos, location history, political affiliations, and social graph.
For most of the disabled and/or isolated, it affords them a degree of dignity and inclusion that is life changing.
The above is doubly true in a post Covid world.
So, you can't artificially limit the discussion to technical similarities. The societal implications (the real fundamentals) should matter more than anything. Do you really want a world where we make our decisions based on what's best for society, or solely on what is technically true (smartphones and consoles are both just computers!)
We already treat things differently solely because of their importance to society, safety, health, and the economy. Yes, that does mean smartphones are, in a way, victims of their own success because they will be treated differently.
But that's not any different from other fundamental inventions in history (the printing press, banking, emergency services, automobiles, communications, etc).
NOTE: I'm not advocating for, or against, any specific policy. I'm only pointing out why equating consoles and smartphones is denying some very basic realties about how much the economy and society relies on smart phones (compared to consoles).
Logical successors or not, the walled garden economic model remains actively in-use and viable on gaming platforms, and has not been found to be legally unacceptable to date. What basis exists for the walled garden economic model to be decreed unlawful, whether for video games or applications or any other digital content? How would that basis be legally distinctive from the walled gardens of physical retail stores?
The judge’s point is that this - “walled gardens” - is an economically sound and widely-used practice that has not previously been found to be unlawful, and therefore (likely) no basis exists to find in favor of Epic’s claims at this stage of the proceedings.
(Usual disclaimer applies: I am not your lawyer, I will not prepare additional citations, please seek legal counsel before taking action based on anything written above.)
> is an economically sound and widely-used practice that has not previously been found to be unlawful
Not unlawful maybe, but unfair? I think the answer is yes.
It's already happened.
Being politically influential, vertically integrated, well organized, and able to negotiate cohesively as a cartel, the Seven Sisters were initially able to exert considerable power
I'm not sure I understand your argument or your views, as there is only the assertion about Apple ("Apple is more powerful...") provided without any of your own views explaining how that assertion has any bearing on this matter. If you can offer any further explanation of how to connect your comment with the case under discussion, I'd love to consider it in more detail. Anyways, proceeding with the best I can offer —
Do you believe that a US judge can issue a summary judgment against a defendant based solely on fairness, when based solely on case law they are not guilty of any crime? (Apple is the defendant, and US law is biased in favor of defendants in various respects.) I believe that such a finding, whether by a judge or a jury, usually results in the judgment being overturned by the appellate court.
In the context of the Seven Sisters example, then, the simple-test question for finding a judicial bridge for the connection between the Seven Sisters and Apple is below. I use "without basis in law" as a superset of "unfair but not unlawful". I would hazard a guess that the answer to this question is "No." but I haven't researched it further.
"In cases where the US member(s) of the Seven Sisters were defendants, did a judge or jury ever find against them without basis in law, and in such cases, were any of those judgments allowed to stand by the appellate court?"
> Smartphone/tablet OSs are logical successors to the laptop/desktop OSs we have not game consoles.
I think that's a case a person could make in a court of law, but there are also compelling cases for "It's more like a console than not" and for "It's its own thing, a separate category of computing device, which should be beholden to a separate set of rules."
The App Store was one of the value-adds Apple brought to the smartphone ecosystem. In a system of heterogeneous methods to put apps on phones (if the app suite was configurable at all and not pre-loaded onto the device), Apple provided a system where they would do quality curation of the apps that were loaded on the device they made and a clean, obvious method to track the apps a person wanted on their device and install them. No complex configuration, no different-installers-for-different-apps, none of that PC-ecosystem nonsense. Along with the iPhone API (that erred on the side of performance over flexibility), it brought a strong product to market.
It's possible what is offered now isn't the same thing, but I think a case could be made by a competent lawyer that the store is part of the entire product offering and makes for a better consumer product, which is what US antitrust law often hinges on (consumer harm).
> Based on existing law, why is the laptop/desktop model inherently superior to the game console model?
Superior for developers because their margins improve. For low margin ones like Spotify that is make or break, especially when you take into account that they are fighting with preinstalled and OS promoted incumbents in both the platforms like Apple Music which are not subjected to the same.
>Superior for developers because their margins improve.
First, this is debatable itself, walled gardens bring their own advantages for developers too. But second, why exactly should developers be the primary concern? There are three parties involved after all: the platform creator/maintainer, the developers, and the users. Why should users not have the choice to essentially collaborate with the platform creator to promote their interests, even at the expense of the developers?
I mean, I know this is HN, and a lot of us wear developer hats. But we tend to wear user hats too, and even in many cases family (or business) support hats. Switching to one of those, developers on open platforms are often jackasses and can develop their own power imbalance vs users. Sometimes (often even!) a single particular piece software can become so vital and represent so much investment that it's much harder to substitute than even the platform itself. At that point any single user faces big hurdles vs the developer. The likes of Adobe and others have repeatedly been able to force very user hostile choices on their customer base because their customers couldn't really coordinate collective action.
One thing Apple offers is a way to buy into a collective action system against developers. For many people that's not a bug, that's a feature, so complaining about how developers are "hurt" or "make less money" isn't going to sway them one bit, quite the contrary. They're generally glad when Apple tells devs their way or the highway[Android/Linux/Mac/Windows]. Of course, this concentration of power also has negative implications too in terms of censorship, inability to do some very useful creative development and utilities, potential for major harm if/when Apple goes bad, etc.
But too many on HN have refused to recognize the strengths and the reasons why it's been popular and to try to find ways to incorporate some or all of those while still allowing power users/misfits/hackers to push the envelope. I think our collective disdain for many regular non-tech users is part of why we've ended up in this mess in the first place.
But for a user, especially a non technical one, a walled garden is a superior ux. Updates automatically, single stop to find anything and easy discovery, no worry of viruses/malware except in extreme circumstances, cheap apps (never seen a .99 app in the wild) etc.
Automatic updates, single stop and little worry for malware are all perfectly achievable without a walled garden. It's been a thing on Linux for ages. It even gives you the choice of how high you want your walls, whether you only trust the debian developers or a user-made aur package or anything in-between.
Perfectly achievable, at the expense of being an end user nightmare.
The reason I'm buying an iPhone is I don't have the time to care about how high the walls should be and to ensure every app I use isn't abusing the SDK to suck up data. The reason I'm paying a premium for Apple is I'm choosing to trust them rather than trust every developer.
The day apple, microsoft or google would manage updates of a whole system as well as some linux distribution would actually be the end of many user nightmares.
Unless you don't install any app, you still trust all the developers of the apps you install.
Walled garden is just a nice way to name Authoritarianism applied to a platform.
It might make you feel safe to have apple deciding every bits of what you can do with your phone but it does mean that:
- it's secure
- the apps you are using are
- you still have very low control over your data.
That’s true of all closed source software, not just walled gardens. Any time you don’t have the source, you’re trusting that the developer isn’t screwing you over.
I’d rather trust Apple than the cumulative two dozen developers that have their software running on my phone.
Or to put it another way, Apple provides systems administrator services with every phone. Most medium and large businesses pay a LOT of money for systems administration to ensure that their desktops and laptops work reliably.
And yet the only way it was successful on the mainstream was via ChromeOS and Android, which hide from userspace that they are even using the Linux kernel.
Apparently yes, given the amount of "Linux" developers that rather pay Apple for a UNIX desktop experience instead of making "Year of Desktop Linux" actually turn into a reality beyond the usual 2% from Steam surveys.
Your example seems particularly weird to me since Spotify's business is having extremely broad hardware support. They set up shop on everyone's platform. I'm sure desktop/laptop listening is a sizable chunk of their use but it's probably dwarfed by all the cars, phones, smart speakers, TVs.
In the Spotify analogy, maybe the music artists would play the role of developers here—-get squeezed for the benefit of end users and the platform owner.
Surely you remember the original iPhone announcement: being able to call people was only a very minor point in that presentation even then. I would bet money that the iPhone 12 announcement will not have anybody demonstrating the phone capabilities at all.
You should go back and rewatch that original iPhone announcement. Phone calls were a major highlight. They did a live, on-stage conference call between Jobs, Ive, and Schiller. Jobs phoned in the infamous thousand latte order to Starbucks. Features like Visual Voicemail were heavily promoted.
I brought it up precisely for that phone call. You must remember what prompted it, right? Jobs didn’t go into his phone book and dial the number–he looked it up from maps. And that is precisely how people use iPhone today: they do a bunch of other things and also call sometimes. To be honest, I take more phone calls from my Mac than my iPhone.
Well, yeah. The presentation showed emergent new ways to place calls. Not sure how this contradicts the original point that iPhone was an evolution of the cell phone.
Citation? Last I checked this was only relevant for devices in Developer mode, and required a bunch of hackery. That is little different from installing apps on your iPhone from Xcode, which Apple also allows...
Correct me if I'm wrong, but did not Apple create the first app store and then set it, perhaps somewhat arbitrarily, to 30%? After that, all others simply followed suit and set their cut to 30% too?
If so, I would argue that it's high time to revisit the 30% charge. Whatever happened, competition among platforms did not reduce the 30% fee. I'm not sure why, but even if we cannot prove that there was price fixing, the Apple app store and other platforms have become so powerful that individuals and small companies cannot negotiate with any of the stores for a fair price.
The revenue model was very different for Nokia software, carriers were involved and revenue distribution was somewhat byzantine, if i remember correctly. One of the reasons developers jumped on the AppStore was that it simplified things pretty dramatically from the previous status-quo: they only had to deal with Apple. One of the reasons Nokia struggled to relaunch was that they couldn’t wiggle themselves out of these relationships with carriers, this albatross around their neck. In that sense, the AppStore was undoubtedly a step forward. That doesn’t mean it’s an eternally-perfect solution.
Like in many other issues involving Apple, what looked like a positive change in immediately-pragmatic terms ended up being a faustian bargain in the long run. Maybe we should just discuss this in terms of “10+ years have passed, things have changed, what was good before might be bad today”. Stuff like the single non-negotiable browser engine was a curiosity and a small impediment 13 years ago, but now it’s a real threat to the health of the web ecosystem. Same for the single-appstore model, which effectively enables a rent-seeking cartel (Apple and Google) which any serious antitrust scholar should find abhorrent.
The list of companies:
PlayStation, Xbox, Nintendo, Amazon, Walmart, Best Buy, Google, and more
Include many (hint - the first 3) that were taking huge chunks of game publishers' money long before the iOS App Store ever existed. There were also many app stores for palmOS, WinCE, etc. some of which collected far more than 30%.
There was ClubNokia where you could pay by SMS for ringtones and on certain phones - games. Many 3rd s60 app stores were just credit card collection places and malware distribution centers. None of the stores were preloaded on the phone.
Steam probably had first "app store", but it has to be installed separately and usually you don't have to use it for the most part - you often could buy it online directly from the publisher or on CD/DVD.
PS Store launched in 2006. That's closest to what Apple did. Actually, exactly the same for most part until Apple added in-app, subscriptions etc. Difference was that to get listed on App Store you just had to pay $100 and make application that follows guidelines.
Here is where there are lot differences:
- Legally you can't sell any software for PlayStation without Sony getting a cut.
- That includes physical media
- Steam can only get it cut from sales on its store
- Publishers/developers can either sell directly to you without anyone getting a cut
- Or they can sell you a steam code and then steam doesn't get a cut
This is why I'm saying that Apple is closer to Sony than Steam.
I don't know where 30% cut came from, but I know steam has the same cut.
> I don't remember where I read this but someone mentioned that the judge asked Apple why they charge 30%, which I found to be a bit of a strange thing to ask (and probably a bit of a softball). Why not 30%? Why not 40%? Why do companies have margins that they set that the market will bear at all? Etc.
Presumably, if they’d said “because that’s what Google is/was charging”, it could be pursued as price fixing.
The number probably came from looking at what brick and mortar stores do. Typically stores "mark up" products by 40% from their distributors. And if you think about it, that's effectively what Apple does, but in this case, the distributor (aka app developer) has to "mark-up" the price to cover the cost incurred by selling in the app store. In general this practice is pretty common in retail.
The fact that there even is an "industry rate" is evidence of price fixing, if not by the legal definition (which may require explicit collusion) then by the layperson's definition.
IIRC, the 30% was chosen so Apple would roughly break even on credit card processing for $1 apps.
So Apple effectively only gets revenue from apps $2+, which then subsidizes the costs of reviewing and distributing the plethora of apps that are free.
In a way, it's a similar principle to progressive taxation. If your paid app is a hit on the App Store, then it's helping support the existence of all the free ones too.
> the judge pointed out that the 30 percent rate that Apple collects is the "industry rate" collected by PlayStation, Xbox, Nintendo, Amazon, Walmart, Best Buy, Google, and more. "It's all 30 percent and you just want to gloss over it," the judge said to Epic's lawyers.
Justifying lax antitrust with the fact that other, similar market-power abuses, have also been permitted in the current lax antitrust atmosphere... as close to circular logic as it gets.
So you think Apple is abusing its extraordinary monopoly power by... charging what everyone else is charging?
I think legally it makes a pretty big difference: abusing a monopoly is considered a social bad because and to the extent that it results in higher prices for consumers.
If they had a monopoly, they should do better than 30% though? Chums like Google who don’t have the monopoly charge 30%. Hell, Twitch takes 50%, right?
If Apple is the only game in town they should charge like 99%. Developers have no choice, right?
"Everyone else" being other middle-men with enormous market power?
> higher prices for consumers.
Monopoly and market power can also kill companies that "should have" prospered, depriving consumers of choice. Like the supermarket that gives preferential treatment to products owned by the same conglomerate, or the search giant that prioritizes its own services [1]. I would consider that a social bad as well.
No walled gardens should be beyond reproach IMO. I think Epic has it's work laid out for it, and they would definitely have a shot with a jury trial, and likely at the Supreme Court given Apple vs Pepper.
It's sometimes interesting to look at the history of walled gardens and how they came to be. Nintendo's console model, for example, was a direct reaction to previous failed no-walled-gardens models where consumer confidence that they weren't burning money buying a lemon console that only supported crappy games cracked.
On phones, Symbian and Blackberry were about as open as Android is currently (though signing apps was partially required IIRC). iOS/iPhones has always been closed except for the web browser.
I think there are completely valid cases for having a locked down phone, but it should be up to the user, not the device/OS maker. In this case, I don't think a phone developer can negotiate fair terms until the users have choice.
Single purpose locked-down devices are all around us from ereaders to TV streaming boxes to game consoles, and here I think it's important to distinguish by purpose from the more general purpose of a phone.
In the sense that nobody is obligated to buy an iPhone (and can jailbreak one after buying it, for that matter), it is up to the user. For the consumer, they have more choice if Android-style "app store but also side-loading," phones that lack an app store altogether, and iPhone-style walled garden coexist.
If you have a company phone you have a different type of walled garden than even what the iPhone provides through some MDM layer. Apple could offer such a separate MDM-based consumer product and also allow side loading.
Microsoft was forced to open up browsing/programming/AV APIs, on which future innovation was built. What Epic is asking for is no different IMO. I just don't think the benefits of multiple open platforms can be understated similar to Windows vs. Linux over the last twenty years.
Both Linux and Windows represent terrible user experiences for many users. Windows, until recent improvements, had a very rocky relationship with being online (primary attack target for viruses, rootkits, and botnets). The Linux ecosystem's user-hostility to the average computer user is the stuff of legend, although things have obviously improved greatly (this is still not the year that Linux on the desktop gains mainstream acceptance).
They could, but what's the benefit? Apple is currently innovating by being closed.
(Android is a more complicated story; if you mean "The Android ecosystem tied to Google Play Services and controlled by Google," I can agree. There's a whole chunk of Android not meeting that criteria, and by many people's estimates, it's behind the 'closed' one for features and reliability).
Let's define innovation here, for iOS it would be the A13 and widgets, while for Android it would be folding screens and a modular Android that's easier to update. But you know, this thread is about Fortnite not being on iOS, and Apple weaponizing technologies like Metal and Safari. Apple innovation is lock-in, while Android is not.
If jailbreaking could be done the same way I can unlock the bootloader for my Android device, you would have a point. Unfortunately it requires using security exploits, which Apple is doing its best to plug.
Symbian apps were sold by mobile operators with margins up to 80%.
You could only install apps outside the store via the SDK.
Later on, during the Ovi Store days it was possible to buy applications and install them via the phone management software, which only technical inclined users did.
Why do you think that case is relevant to this discussion? The only issue that has been resolved in that case so far is a question about standing. The actual anti-trust questions are still unresolved.
I don't need to be a lawyer to see that a case which determined that users can sue Apple because Apple is the direct seller, and in the dissent said developers would have an even better standing to sue Apple leads us to where we are. It's precedent.
B) Why didn't the Judge ask what kind of 'margin' Apple or MS gets for desktop versions of their apps? Because it's not 30%.
C) Asking 'when did Apple become a monopoly because they were not 15 years ago' is irrelevant: when did Standard Oil become a monopoly? AT&T? Certainly not the day they started out. These issues are shades of grey.
I'm tired of judges ruling on issues they don't understand, we need more expertise, just as they have in medicine.
Perhaps the most fundamental issue here with respect to 'Nintendo' comparisons - is that Gaming Consoles are purchased for Playing Games. That's it. All market participants know the stakes.
A mobile phone is an entry point to every line of business imaginable - it's a very broad platform and Apple has tried to take cuts of incidental businesses for all sorts of things.
The analogue would be AT&T charging you for 'every kind of business you did over your phone'.
Or Verizon charing you 30% for 'any kind of business you do over the internet'.
Or the electricity company for 'anything you use electricity for'.
Apple is leveraging the broader terms of mobile access: voice, browser, basic apps, which gives them a duopoly over mobile devices with Apple - into a crazy monopoly over their own platform.
Many markets are not rational in the way we would like them to be and have to be regulated, this is very common with single points of access: phone, water, electricity, energy, drugs, hospitals.
This looks like a prime opportunity for some creative and thoughtful regulatory response.
What lock in? Nobody is forcing Epic to develop for iOS and Fortnight is available on pretty much every other platform. It's literally the antithesis of lock in, no matter how much you dislike Apple or its perceived unjust influence.
Scale and market power are what makes a monopolist, by definition. It doesn't matter if the terms have changed; what has changed since 2008 is the scale and power of Apple.
Incidentally, the 30% came from the iTunes Music Store, on which the App Store was based 100%.
The most popular game consoles have 2-3 thousands games total. They are truly "curated". The Apple App Store and Google Play store each have 2-3 million apps each. They're orders of magnitude larger than game consoles. This is the crucial difference in platforms.
Apparently the 30% cut has it's origins in a deal between Nintendo and Hudsonsoft. 10% licensing fee, and 20% manufacturing costs for physical cartridges.
> Rogers has adjudicated various cases against Apple. In 2012, Rogers dismissed a class action lawsuit with prejudice, upholding Apple's defense that the "Illinois Brick doctrine" from the Supreme Court case Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977) applied, as only the developers of apps could be damaged by Apple's policies, and consumers did not have statutory standing to bring suit on the developers' behalf. The Court specifically noted that the 30% fee Apple collects is "a cost passed-on to consumers by independent software developers".[8] The United States Court of Appeals for the Ninth Circuit reversed her decision, and the Court of Appeals was upheld by the Supreme Court in Apple Inc. v. Pepper.[9]
> In December 2014, Rogers presided over a jury trial against Apple, in which plaintiffs claimed DRM on Apple iTunes violated antitrust laws. On December 16, 2014, the jury reached a verdict in favor of Apple.[10]
> The Court specifically noted that the 30% fee Apple collects is "a cost passed-on to consumers by independent software developers".
This is a somewhat shocking conclusion to come to since the independent developers neither set the fee, nor process the payments. I can see why it was overturned.
This is a super literal take. In the 80s/90s the expense-incurring activity was physical cartridge production. Today it’s bandwidth & delivery infrastructure, card processing, any myriad of things.
> This is a super literal take. In the 80s/90s the expense-incurring activity was physical cartridge production. Today it’s bandwidth & delivery infrastructure, card processing, any myriad of things.
Are the current-day costs of those "myriad things" in any way comparable in magnitude to the 80s cost of cartridge production? I highly doubt it. Bandwidth is cheap enough that single webpages are several megabytes each, if you load everything. Card processing fees are 3-4%. My bet the breakdown of Apple's 30% is >25% "licensing" and <5% cost of provided services.
The cartridges are actually kinda a funny story to themselves if memory serves. Nintendo required that they manufacturer the cartridges themselves (and they had minimum orders), which was separate from the licensing side of things. Then you had disk based game systems come along early 90s which were a couple of bucks to manufacturer (on avg). I remember reading about wild deltas depending on your company size & how much you shipped on what you could expect your take to be on a title, which also makes it hard to compare.
Yes, but it's hard to imagine that 30 years of technological progress has not changed the underlying cost structures of these businesses. After all, it's changed the cost structure of almost every other business that has some connection to computing and data delivery by orders of magnitude. Yet, strangely the 30% cut has not changed a bit.
Nintendo console games still cost $50, and seem to outsell $1-$5 games despite the fact that the vast majority of users already own a phone, and consoles cost extra (and there are more than two platforms to choose from.) So I'm going to go out on a limb and suggest that the market does not consider these to be equivalent products.
The still costs $50 is interesting to me, because inflation adjusted this is a pretty steep discount. The 30% stayed the same, but inflation adjusted on something like this the revenue netted is down to what 15% would have previously got you.
All I’m really getting at is that the layers of complication are thick. I feel like one could unwind this with a lot of effort, but I doubt anyone is being utterly fleeced (or is utterly innocent, for that matter).
For which a customer spends hundreds of dollars, comparable to purchasing a game console that took cartridges. Apple doesn't provide that, buyers provide that. Apple is trying use their leverage to dominate every angle of the action. Surprise, surprise, surpriiiiise.
I wouldn’t be so sure. How many man hours go into developing ARKit, Foundation, Swift etc.? How many developer accounts would be required to fund all of that plus the R&D for the ideas that didn’t work out?
I think the $99 is more of a filter, like a captcha, for developers that mean business.
Probably a more accurate analog to the cartridge would be the storage and distribution services. That takes some infrastructure in networking and storage.
It's not really the same because the reason Valve built out all of this infrastructure was so they could take the middleman's cut. Basically, GameStop buys games cheaper wholesale and resells them at a higher retail price. Valve gets all of that by being the direct retailer to the end consumer.
Not even having to manufacture a physical good is a separate cherry on top of that.
Apple actually gives developers 1PB of free storage per app with CloudKit, and it even has some nice privacy features for users. Of course it has limitations, so most developers prefer rolling their own backend.
Consider a game that holds a leaderboard on steam, or any app that stores user progress on its servers.
Not exactly pertinent to your comment but pertinent to the conversation as a whole:
If Apple/Google/Steam stored all app data for developers and also did the marketing for developers, that is closer to what 30% is worth imho. For hosting the platform, yes your grandfather was the first to stab a flag into the digital real-estate, and for that I owe you 30%? Feudalism that manages to shift cost to both consumer and developer at the same time -- impressive, but not very noble.
That's not a good analogue for a cartridge, though. The cartridge or the device itself stored data locally. Modern gaming consoles store their data on HDD's. Anything beyond that is entirely developer's prerogative.
And according to another user, they do offer storage through CloudKit... which it appears they do, included in the dev account/App Store distribution model—1 PB: https://developer.apple.com/icloud/cloudkit/
The is the wrong history though. It only matters if you accept the App Store == console analogy, which I don't. Historically speaking, App Store was not based on game consoles, it was based on the iTunes Music Store. Everything about the App Store design was exactly the same as the iTunes Music Store, right down to being in iTunes itself. App developers even uploaded their apps to iTunes Connect (which has only very recently been renamed to App Store Connect).
That’s a little like saying since the facts of how the people at Apple arrived at the original 30% disagree with your philosophical views on this matter, it seizes to be relevant. A personalized reality, with personalized facts. Alleged fact, much as it may not make sense to some in hindsight, is they used the Nintendo-Hudson Soft price model and it doesn’t change how they decided that because of anyone’s preferences. It’s totally different than to accept, it’s been this way - for too long - it’s time to change for a more equitable price model. But then that’s the crux about bringing this suit to court in a country whose judicial system is based on precedents.
US antitrust law isn't designed to break up platform monopolies, period. Which is unfortunate, because the kind of all-owning combinations it's designed around aren't really possible in tech, post-Internet.
Microsoft of the 90s was much-lamented, but in reality they extracted far less value than they could have. They could have easily asked for 30% of all revenue of all Windows software, and developers would have had to pay it.
I'm hesitant to advocate breaking up of platform monopolies or duopolies, but a lesser-version of antitrust law would substantially benefit consumers in both app stores and ISPs. In both cases, the monopoly stems from monopolized access to the end customer, which is what would be beneficial to attack.
IMHO, a sliding scale of mandates for increasingly-open third party access based on market share (broken down into each user market!) would be appropriate.
If you want 90% market share, go for it. But you'd better believe you're going to have to provide (1) customer access to third parties & (2) any work required to enable them, at cost.
Just a reminder that actually by definition consumer harm is the bedrock standard for antitrust litigation in the US. Scale and market power may be components of an argument for consumer harm, but they are not sufficient in and of themselves.
> consumer harm is the bedrock standard for antitrust litigation in the US.
Which is really dangerous, IMHO, because a lot of the most vile bits of monopoly power can happen without directly causing immediate consumer harm.
You shouldn't need to prove consumer harm to win antitrust litigation. That should be just one of a few different harms, any one of which should be able to win antitrust litigation.
To ask you the same question, restated, that the judge asked Epic, which they had no answer for: if Apple wasn't a monopoly before, but they're a monopoly now, when did they become a monopoly?
While it is an interesting question, what does it matter? When did standard oil become a monopoly? Is there some specific date where they changed from competitive to anti-competitive? More likely they grew over time and the ability for competition to exist was diminished over the entire period.
The reason it matters is because Epic's entire theory of the case involves Apple having a "monopoly" over the specific sub-market of "iOS app distribution". They've intentionally defined this market very narrowly because they know Apple does not have an actual monopoly in the smartphone market.
As the judge pointed out yesterday, Epic has "created a failsafe definition". Because they have defined a single product market, Apple by definition has a monopoly over their own product.
But assuming Epic's theory is true, it would have been true from the very start of the App Store, back when Apple had barely any market share. Of course, it would have been absurd to complain in 2008 that Apple was unlawfully maintaining its monopoly over "iOS app distribution", which is why Epic's lawyer largely dodged the question during the hearing yesterday.
You seem to be asking your second question rhetorically, but its actually an interesting question. The reason we call anti-monopolistic activity "anti-trust" is because Standard Oil organized itself as a series of companies related only through a common trust. That trust controlled 40 different companies, and was the original target of the government's ire. When the trust was ordered dissolved, it eventually was replaced by a holding company.
The history is interesting and informative, and explains a lot about why the US government started to care about issues of corporate governance in the first place. When people talk today about the dangers of "monopoly," they often misunderstand the point entirely.
This question assumes that Standard Oil didn’t engage in anti-competitive practices after they gained a monopoly position which they absolutely did. On the run / don’t have time to send links but this is common knowledge and easy to look up. It’s worth noting that a monopoly alone (a definition for % market share) does not meet the criteria for antitrust. Antitrust carries an extra burden of the company abusing its monopoly position eg what Standard Oil did and arguably, what Apple is not doing.
> Apple doesn’t even have 60% market share in the US.
They have over 50% market share though. They're by far the largest smartphone manufacturer in the US. And they also get the vast majority of app developer revenue, much more than the Google Play Store.
> Android has 86% worldwide.
Worldwide market share is not necessarily relevant to US law.
> They are no where near a monopoly like Standard Oil or Bell.
Worldwide share could be made to matter during the trial (assuming it reaches that point). It demonstrates that Apple's position in the US is a consequence of consumer choice, as they do have real competition. It's just that their competitors have (for various reasons) failed to take (or in this case failed to hold) a larger share of the US market.
Shows the marketshare of mobile OSes by year from 2012-2019. It's worth noting that Apple's > 50% market share is a recent (2019) phenomenon. It's not like they've held that position for the entire decade, and it's not at all clear that they got that position by any illegal or unethical methods [0]. So consumers have made a clear and (somewhat) informed decision by electing to by iPhones.
[0] I'm sure someone will talk about green bubble/blue bubble, but seriously people: stop using SMS/MMS it's crap. Get your friends onto Signal or, hell, even WhatsApp so you can have real cross-platform, secure (less some metadata) communication.
Hardly anyone buys apps. They either pay for services that work cross platform and the majority of sales are coming from in app consumables for games.
Media? iTunes music you buy has been DRM free for a decade and Apple Music is available on Android.
Movies? Blame that on the studios that don’t participate in Movies Anywhere. Apple is a member along with Amazon, Vudu, and Google. If you buy a movie from a participating studio, it syncs between all of the platforms.
The ASP of an iPhone is $675. An Android phone is less than $300. That doesn’t take into account the ability to sell your phone and/or give it to someone.
What do you mean “data is controlled by your provider”? You just switch the SIM card.
But now are you saying that we need government intervention because of “lock in” when people are using their own free will to buy more expensive products when their are cheaper more “open” products available? Are people too dumb to make their own choices.
Not a direct answer to your question, but somewhat related. When the iPhone was first released (or a year later when the App Store was released) we did have more competition than we do today.
Windows Mobile, Symbian OS, BlackBerry OS (and to some extent Maemo) all had the opportunity to compete with iOS and Android but were either too slow to transition to market demands or did not get a lot of traction to start with.
While not officially a monopoly in my book, I think it's safe to state that we're now down to iOS and Android for 99% of the market with KaiOS Ubuntu Touch (Tizen?) picking up some of the more niche or cheap devices.
If lowering your price doesn't increase demand then you are in a way a monopoly. I don't see any scenario at all where Apple lower their cut from 30% except via government action, so it makes sense to legally force them to either get competition or to lower their cut below 30% to something more sensible.
Either you are a monopoly for that market or lowering prices will let you gain more market share. More market share is an incentive so there is a reason to reduce prices. You could probably find some reasonable exceptions, but nevertheless I think if a company has no incentive to reduce prices then it probably should be regulated.
Having incentives to do something doesn't mean that you will do it. Lowering prices reduces your income per sale, that is a disincentive. If it increases sales then that is an incentive. If there are no incentives then there is a problem since then there will never be a reason to reduce price.
Healthy competition is when the different parts have incentives to reduce prices to steal customers from each other. Then unless they collude they will reduce prices until there is barely any profits left. However if reducing prices doesn't help you get the other persons customer then there isn't healthy competition.
So tell me, what non government action would you say could cause Apple to reduce their 30% fee? I don't see any. Apple reducing their 30% fee wouldn't cause more people to choose Apple over Android and vice versa under current circumstances. Both of those fees are set with no care about competition.
> There is roughly 50% of the US population who wouldn’t buy an Android phone if it cost $1.
Pretty sure many would switch if the highest end android phones were free.
- in the early 80s, Apple //e’s were more expensive than the competition.
- in the mid 80s - 2000, the Macs were and continue to be more expensive than the equivalent PCs
- in the early 2000s, iPods were more expensive than the equivalent media players.
- the iPhones are more expensive than equivalent Android phones.
Apple hasn’t “found a reason” to reduce prices in 4 decades. Did it have a “monopoly” on computers, music players, tablets, watches, monitors, etc all that time?
> Pretty sure many would switch if the highest end android phones were free.
“high end” Android phones are cheaper than iPhones. Yet and still Apple dominates the high end. Maybe every one doesn’t buy solely on price.
Well actually, there is no Android phone that performs as well as the $399 iPhone SE, but that’s another debate....
The person you are responding to basically quoted the definition of a monopoly, as according to the opinions of the US government.
If changing prices does not change demand for your product, then by definition, according to the US government, you have significant market power (IE, you have a monopoly. The definition of a monopoly is merely having significant market power, according to anti-trust law)
That is the definition that judges and the government use for market power.
As usual, it just takes a little observation to see how non sensical this interpretation is.
Do you really think that every company that can raise its prices is automatically defined as a monopoly? What next? Nike has a “monopoly” on sneakers because it can raise its prices on Air Jordan’s and people still buy them?
Should Apple also be regulated as a monopoly because it raised its prices on Mac Pros and people still bought them?
Could it possibly be that a bunch of posters on HN don’t know as much about the law as ... a real judge who didn’t agree with similar arguments.
I'm no expert on frogs or boiling, but I would say the moment the frog is 100c all the way through. There seems to be a defined thing that makes it a boiled frog, but that doesn't seem to be the situation in the Epic v Apple case.
It very much matters if the terms changed, considering that the long shot legal precedent Epic is relying on is Kodak v. Image Technical Services. Terms changing in that case was a key element of why a single brand could be considered a valid antitrust market.
Could you explain this in more detail? I read about this case, and my understanding is that the Independent Service Organizations ("ISOs") didn't actually have a direct contractual relationship with Kodak. They were truly independent, and thus there were no terms to change.
Kodak monopolized the aftermarket for parts and service after their customers were "locked in." The primary market for their equipment was competitive and they didn't have monopoly power, but the Supreme Court still decided against them. This established that a single brand could be a "relevant market" for antitrust purposes under certain circumstances. This is the case that Epic is relying on against Apple. Unfortunately for them plaintiffs almost never win under Kodak antitrust theories.
> Kodak monopolized the aftermarket for parts and service after their customers were "locked in."
It's not clear to me that the timing was essential. Apparently Kodak had a policy since 1975 to only sell parts to direct purchasers of equipment, but the initial case wasn't filed until 1988. So the official terms, which were between Kodak and customers, not Kodak and ISOs, hadn't changed recently.
Clearly Kodak was taking some non-official anticompetitive actions, but that's not the same as changing the official terms.
Subsequent decisions by circuit courts have used the lack of an explicit policy change to find against the plaintiff. This case is at the outer boundaries of antitrust law and lower courts have effectively taken the perspective of the dissent to limit its applicability.
The "terms" in this context are not referring to contractual terms between Kodak and the ISOs, they are the conditions under which Kodak customers could obtain service and repair parts for the copiers they originally purchased.
In Kodak, customers originally purchased Kodak copiers without any aftermarket restrictions, and then several years later Kodak changed their policy and stopped selling repair parts to the ISOs, which left customers locked into buying repair services from Kodak instead.
The key factor in Kodak was that there was change to the conditions under which customers could obtain repair parts that customers could not have reasonably anticipated or planned for when they originally purchased Kodak copiers. The fact that a change in policy occurred is very important to that case, and indeed some subsequent courts have found that absent that change in policy, Kodak does not apply.
Epic's lawyer spent the first part of yesterday's hearing attempting to argue that Kodak applied to this case, but judge seemed very skeptical of this line of argument. As Apple's lawyer correctly pointed out, single-brand markets are a unicorn in anti-trust law and this case does not fit the narrow exceptions created by Kodak (and a related case, Newcal).
As in, to continue with the game console analogy, you must have at least one license to a powerful engine (like Unreal Engine with a 5% fee) to develop efficiently.
Do you actually save 5% (assuming PS is 30%) by developing for the Apple ecosystem? (Assuming Metal is comparable to Unreal)
> Do you actually save 5% (assuming PS is 30%) by developing for the Apple ecosystem?
Probably not - assuming you're being smart and targeting multiple platforms, you're still going to be using Unreal/Unity. And even if you're only targeting the Mac, Unreal/Unity bring a lot more than rendering to the table, so you're probably still using either of them, all with a commercial license.
And unless you're doing distribution yourself, anywhere you put your game will take a percentage, pretty much all around 30%. Some places like itch.io let you define how much they take, but no one really uses itch.io for anything bigger than an indie game.
> And even if you're only targeting the Mac, Unreal/Unity bring a lot more than rendering to the table, so you're probably still using either of them, all with a commercial license.
Depends, plenty of indies are doing alright with Apple's own gaming frameworks.
>Scale and market power are what makes a monopolist, by definition. It doesn't matter if the terms have changed; what has changed since 2008 is the scale and power of Apple.
Anti-trust laws have specific conditions to meet such as predatory pricing, product tying, exclusive dealing, etc. It's not just a matter of market share and market power, they have to have obtained or maintained that market position unfairly. This sets a pretty high bar in a market with 2.5 major app platforms (Apple, Google and Amazon).
As an aside, I've read a number of comments here lamenting that the judge doesn't understand tech, but I think the opposite is true as well: many of the commenters here don't understand the law. The judge needs to work within the framework of existing legal precedent when making her decisions, and unfortunately for Epic, it doesn't really seem like existing precedent is on their side.
As a specific example, many of the comments here point out that smartphones are not like gaming consoles because smartphones are general-purpose computing devices whereas consoles are entertainment devices. Be that as it may, there's nothing in US law that says general-purpose computing devices are supposed to be treated differently than other products for the purposes of antitrust analysis.