When “different think” is really conventional think
Taking on another set of poor arguments in favor of State regulation of the App Store.
Macworld recently published a column by Anders Lundberg in its “Different Think” series titled, “Different Think: Apple's App Store monopoly needs to end.” For context, here’s what Macworld says about it’s “Different Think” editorial series:
Different Think is a weekly column, published every Tuesday, in which Macworld writers expose their less mainstream opinions to public scrutiny.
The problem is that what Lundberg has to say in this piece isn’t an example of “different think” at all. It’s the conventional view amongst the members of the corporate tech press. My response to Lundberg’s piece is genuinely “different think,” because my argument is that the State shouldn’t interfere with Apple’s App Store business model, and that there’s nothing fundamentally unethical about how the App Store is run.
Let’s break down the piece:
In recent weeks, it's become clearer than ever that Apple's monopoly over the iOS market needs to end, for the sake of competition and society at large. This has been demonstrated by several revelations about the way Apple treats developers, and the way the company views its users.
(We should stress that Apple itself rejects the idea that it holds a monopoly. But the evidence says something different.)
Lundberg never really substantiates the claim that Apple holds a monopoly. The reality is that Apple doesn’t hold a monopoly in any of the markets in which it competes. There are far more Windows PCs and Android phones sold than Macs and iPhones. Apple TV+ and Apple Music aren’t the leaders in either respective market. Google and Microsoft arguably have more advanced and widely-used cloud services products. And so on.
Apple does control the process by which apps can be installed on its iPhone, iPad, Apple TV, and Apple Watch products. I’ve argued this is akin to the way Walmart has control over what can be sold in its stores, and the terms by which those products are made available for sale, including the commission paid to Walmart for the use of its shelf space. Or perhaps a closer analogy would be the level of control that Nintendo has on the market for games that can be run on the Switch. And just as game developers can make games for other platforms if they find Nintendo’s rules too onerous, app developers can make apps for Android and Windows if they find Apple’s App Store terms too onerous.
You can say that Walmart has a monopoly on what can be sold in its stores or that Nintendo has a monopoly on what games can be sold for the Switch, but you’d be using the word “monopoly” in a very loose sense. You can shop at stores other than Walmart, you can buy games for other game consoles, and you can buy apps for other smartphones. None of these companies has a “monopoly” in any meaningful sense.
"We would have to come up with another system to invoice developers, which I think would be a mess," said Apple CEO Tim Cook. What a shame!
I’ve seen others dismiss this line of thinking from Cook in the past, and Lundberg treats the argument as of no merit, but there is a clear benefit to developers (and especially to App Store customers) to Apple’s single process for handling payments. That’s not to say there wouldn’t also be advantages for developers if Apple were to allow multiple payment services on the App Store. There clearly would be. But to pretend Apple doesn’t have a point here isn’t taking the issue seriously.
"Our commission" is what Cook called it this spring when he was on the witness stand. As if Apple is forever entitled to a tenth of whatever money is made by developers selling apps to iOS users. There are more than a billion iOS users, and it's essentially impossible for a new service to prosper without accessing that market. But Apple will have its way.
This paragraph strikes me as a bit incoherent. I think the implication is that Lundberg favors multiple App Stores for iOS, or at least multiple supported vectors for installing apps, though that isn’t clearly stated in the piece. The only other alternative one could reach from that paragraph is that Lundberg doesn’t think Apple is entitled to any commission whatsoever from the sale of apps and in-app purchases on the App Store. But that’s silly, and I haven’t really seen others making that case. I do frequently see the case being made that Apple’s commission is too high, and that Apple should lower it. I don’t have a dog in that fight. My suspicion is that over time Apple’s commission will come down, and indeed that has happened in the past.
Let’s examine this phrase: “it’s essentially impossible for a new service to prosper without accessing that market.” Remember that not all app transactions in the App Store incur a commission to Apple. Only paid apps, or in-app purchases are subject to Apple getting a cut. Many companies, including some very big companies, simply move the payment for their services out of their apps to avoid paying Apple a commission. This is not ideal for anyone involved, but it is a way that many companies have successfully navigated this issue.
Apple never thinks it's in the wrong. It will continue to stubbornly fight back by any means necessary to keep its golden goose.
This is a lazy use of anthropomorphism. We know that Apple executives have internally debated the percentage of their commission fees over the years, and we know that they have in fact changed their commission fees in the past. Furthermore, there’s absolutely no ethical problem with Apple charging a commission on app sales within its store. Its quite right to defend its business practices, both in courts of law and in the court of public opinion.
As I see it, there is only one way left to safeguard free competition, prevent Apple from charging usurious rents for the privilege of selling software to iPhone users, and ensure that innovative apps and services such as game streaming can reach the world's one-billion-plus iPhone users without being subject to Apple's whims.
This is pretty light on details, to say the least. The use of “rents” is absurd since developers are charged a commission on each sale they make in the App Store, not on being in the App Store. What percentage would fall beneath the “usurious” bar? 10%? 5%? 2%? What does it mean to “ensure that innovative apps and services… can reach the [iPhone users]?” Frankly, the App Store has been an amazing tool for connecting developers and customers over the years.
The App Store monopoly must be ended, and it must be possible to install software on the iPhone from other sources, just like on the Mac.
He’s certainly not explicit about the how, but it’s impossible to read this as anything other than a call for massive State intervention into Apple’s business. We must reject that a) because it’s wrong to use the coercive power of the state to interfere in a company’s business (except in cases of fraud) and b) because there’s a very good chance that the State would render a judgment that makes the situation worse for everyone, and that the precedent set by such State actions would harm other companies in the future.
Macworld, if you’re looking for a real example of “different think,” publish this.