> Companies that monetize user data in exchange for “free” services that abuse your privacy aren’t affected by this [the app store tax], as they don’t process payments through the App Store. However, privacy-first companies that monetize through subscriptions are disproportionately hit by this fee, putting a major barrier toward the adoption of privacy-first business models.
Huh. I’ve never seen it framed this way and it might be the most compelling argument I’ve heard to date. It’s not simply a debate about whether a company should be allowed to be vertically integrated in isolation, but whether that vertical integration allows them to exert unfair distorting pressure on the free markets we are trying to protect.
I have disorganized thoughts about this, but it's not just a debate about vertical isolation vs not.
1. The size of Apple/Alphabet/Samsung makes it difficult to enter the market (see: factories having ridiculous MOQs for small-batch phone manufacturing), pushing everyone else out.
2. The size of the smartphone market makes it impossible to not have to deal with one of the above companies for certification, market penetrance or such. This makes them kingmakers. If a company somehow manages to become Facebook, Netflix, or Amazon, then the phone companies slide them a secret deal under the table. Everyone else gets a market-limiting set of terms that makes sure "tech" stays one of the "top" industries.
Combined, with no entry allowed, and with forces exerted outwards, we see broad social structures orienting /around/ how we use our phones, rather than the other way around, and that includes ad-monetized-absolutely-everything.
Phones and social media, today, are where TVs and broadcasts were in the 1950s/60s. Ubiquity and centralizing forces. If someone told us in the 1950s a TV manufacturer was exerting pressure on our forms of information distribution and was choosing which voices get a seat at the table, we'd rightly call that archaic and wonder why people would accept a technology provider as a market-shaping force. But today we accept it nonetheless. I refuse to believe the argument that the world's largest company can't figure out how to build a secure pipeline without making plenty of my decisions on my behalf...
Exactly. All the free market logic assumes that barriers to entry are low. They are incredibly high and the market is naturally prone to converging on a single solution. There's basically room for two smartphone ecosystems. Microsoft/Nokia couldn't sustain a third. Android-adjacent things like Amazon Fire and Tizen have little market share.
> factories having ridiculous MOQs for small-batch phone manufacturing
Ironically in the contract manufacturing area the market is actually efficient. Small batches just cost more as an intrinsic fact about manufacturing. I guarantee you could get a quote for any quantity of manufacturing above 1, you just wouldn't like it.
Laws need to be revised to make it easier to remix off the shelf components.
I argue, default compulsory license fees should be a feature of copyright and patent. A 'reasonable' cap to the maximum it costs to reuse an existing device / idea. (Also that it should be a LOT tougher to patent things, maybe 1 patentable thing per expert examiner's work week, which would be the cost of filing for a patent. That only individuals should be able to own a patent. That companies could create 'prior art' with academic detail releases.)
I don't think it's so much patent or copyright as iPhone sits on a huge stack of technology which is proprietary by contract as well. It's very, very vertically integrated.
New Android startups appear now and then. The sort of thing that's achievable with a few tens of millions of dollars of funding. But Android as a whole represents a huge pile of work .. sitting on top of Google Play Services and the App Store, as we can see by the relative non-success of Amazon Fire.
(I was actually involved in the development of a phone-like handset device that was built around phone SOMs from Sierra Wireless. The first minimum order for assembly was ten units, scaling to a thousand after alpha test.)
Remixing off the shelf isn't really the issue if you want to compete, it's the fact that you wont even be able to buy the competitive components at all because they wont sell you them even if you ask and have the money.
That’s covered by the compulsory license part of the comment. Say Apple has a patent on the iPhone, Apple must license the iPhone itself to me at a reasonable fee. Then I can go sell jPhones all day to compete.
Hmm. Depends what you're referring to - iPhone is indeed a closed system, by contractual arrangement, but Android isn't, and it absolutely is feasible for third party Android devices to exist. Occasionally someone does a new phone startup.
Not especially a matter of patent, just good old fashioned contract exclusivity.
> the market is naturally prone to converging on a single solution
Not only that it is "naturally prone" to it (with thinks like bulk efficiencies) but also that it is economically prone to it. A free market with no monopolies drives profit towards zero. No company wants this so the logical response is to become a monopoly (or as close as possible) by putting up barriers to entry and competition.
Note: There's room for more smartphone ecosystems, but not mainstream ones. There are a few nonmainstream phones out there, from Linux phones (Pine, Librem, MNT I think now?) to more openish Android phones (Fairphone) to completely different platforms (that I'm pretty sure exist but I don't remember any of).
> If someone told us in the 1950s a TV manufacturer was exerting pressure on our forms of information distribution and was choosing which voices get a seat at the table, we'd rightly call that archaic and wonder why people would accept a technology provider as a market-shaping force. But today we accept it nonetheless.
A smartphone from Google or Apple is also pretty much required for certain government apps, banking/financial services, and so forth. I wouldn't call it a stretch to say that in the future it would be mandatory to have these duopoly controlled devices on your person at all times, like how you need to carry an ID card.
Many of those apps don't work on rooted phones or custom ROMs without workarounds and doing so is a TOS violation in many cases as well. Also imagine what it would be like if your Google or Apple account got banned by accident with no human support to sort it out.
That's an excellent point. I use Android LineageOS with no google apps. The amount of bullshit that I, a literal computer science PhD, have to put up with to somewhat avoid the more pernicious parts of the monopoly, is insane. Critical and even mandatory parts of my life (banking, government services) require me to engage with google in one way or another.
I actually put up with Lineage for many years before it got so bad that I had to switch to an iPhone. Before 2020 many apps still worked fine with it. All my computers are Linux and I self host everything, but I just couldn't risk an account lockout or a broken bank app.
Honestly I wish there was a legal requirement for those services to provide full access via a relatively open platform (like a web site), not a mobile app.
The entire business model that monetises user data, where the actual customer is the advertiser, users do not vote with their wallets, and honest competition is impossible because no one can compete with free, should simply not exist and maybe regulated against—especially in social media, where it incentivises algorithms to push aggravating content in the name of engagement and ad views.
Whether Apple should be regulated into reducing the fees they charge for access to their hardware and software ecosystem (the ecosystem they unarguably did a pretty stellar job at) is a debatable matter of its own, but it doesn’t strike me as addressing the issue of ad-supported business and how it messes with the way the market is supposed to work.
It is true that platform fee means this distorted business model is unfairly favoured. However, this is just an extension of the business based on ad/data mining (especially social media) being generally unfair in so many ways, and even with zero platform fees that business won’t stop being unfair and won’t be seriously challenged. To reiterate, no one can honestly compete with free; fee reduction merely tweaks the formula from “free vs. $X” to “free vs. slightly less than $X”.
Furthermore, there is the obvious issue that even if an app or service is paid, it can still be additionally monetising user data. Reducing fees will only favour this doubly shady business.
Perhaps what could actually move the needle a bit and make this model less attractive is if walled gardens somehow found a way charge a big fat fee off the ad/data mining revenue, in conjunction with appropriately reducing fees for regular sales of B2C apps and services. Could this be technically possible without walled gardens additionally owning ad exchanges (which might be a can of worms that shouldn’t be opened)?
I think the fix we need is comprehensive legal privacy protection and (even less achievable) significant restriction on advertisement. That would actually curtail the market for user data and prevalence of ad funding as a model.
What’s weird for me is that users can effectively vote with their wallets - they can refuse to engage with ‘freemium’ or ad-supported media - and they can refuse to consume ads when presented, refuse to engage with calls to action, refuse to pay for products advertised to them in this way.
Have you ever been shown a mobile ad, and thought to yourself, “this is a good thing, this is an honest description of a product that I am eager to spend money on?” No, on the contrary, they’re the subject of universal ridicule… and yet they persist. Why? How? Who is paying for them? How are they generating revenue? How can that be worth anything? Where is the value coming from?
So even though I delete apps that force you to sit through ads, and I refuse to be led by ads towards spending money - even though I am in effect ‘voting’ by doing so - it doesn’t seem to have any impact. The ads keep happening anyway, I can only assume because they do actually work on other less canny consumers.
Is the problem really an inability to vote with our wallets? Or is the problem a complete lack of media/marketing literacy, that leads the credulous to engage with ad slop, against their own best interests?
Some of it is more specific to social media, where it is a vicious circle. I wouldn’t latch to voting with your wallet, it’s merely one symptom of a complex issue.
For social it’s key to communicate with others, so as long as you use it you kind of have to be where everybody is, and everybody is where the free stuff is. If you can’t easily leave and continue communicating, because the platform attracts advertisers by the number of figurative eyeballs so it’s not in their interest to let yours go, then you can’t vote with your wallet unless you make yourself an outcast, which humans—extremely social beings—tend to find extremely stressful, which makes it is not really in their best interest no matter their media and marketing literacy.
On the other hand, even if you do make this difficult near-suicide move and leave, you have hardly anywhere to go: because of this phenomenon, any honest competition where you can pay for better service that works in your interest and has actual customer support (remember when that was a thing?) has no chance. All viable competition remains mostly free to use—we have been conditioned that it’s got to be free, but of course if neither users nor advertisers are paying then no one can really demand things that we take for granted from commercial services (like uptime, availability, well-supported convenient clients and so on), and the amount of resources that goes into development and support of these services is much smaller and much less coordinated.
With non-social ad-supported products it’s not as bad, at least in terms of lock-in. I personally would prefer a paid app from a somewhat reputable developer than risk installing a tracking machine from a shady SDK. However, still, most people default to free, and if platform fee is reduced and that honest app costs slightly less but is still not free, will it make any perceptible difference? I doubt it (maybe you’re right, most people lack media/marketing literacy, they can see that with free their economic utility per dollar approaches infinity and are unaware or not concerned about the intangible damage, including to the ecosystem of developers who try to make an honest living) and so I think ad/data mining based model should be fought on another level.
I think if there ever was an indicator that some function should be owned by the public, it’s when the public has come to expect it exists for free, when the social expectation is this thing is so fundamental and necessary that paying for it is absurd and creates equity of access problems.
Yes, in a way it's a rather good argument. But if you take it to its conclusion, if Apple finds it harder and harder to monetize the App Store through fees, then THEY might eventually decide to switch to privacy violating advertising as their revenue strategy.
At that point consumers would be free to make a choice to switch away from Apple if they value their privacy enough. The problem right now is that Apple is 'abusing' the fact that privacy-aware consumers are drawn to their platform to charge onerous fees to app developers. They're leveraging their (de facto) monopoly on high-end mobile privacy-aware devices to restrict competition in mobile app fee charging. It's that business practice that's wrong - having a monopoly is fine so long as you don't start using your monopoly position to make money from people who are your customers for some other business.
Microsoft fell foul of this in the early 2000s. It wasn't their monopoly on desktop PC OSs that lost them an anti-trust case. It was the fact they used their monopoly on Windows to push users into adopting IE. They abused their monopoly position. That's the problem.
>At that point consumers would be free to make a choice to switch away from Apple if they value their privacy enough.
Consumers who spent hundreds of dollars in Appstore purchases and have 10+ years of photos, movies and data tied to Apple won't just suddenly leave all that and move to Android and start their digital life from scratch.
And the young consumers just starting their digital lives, are jumping in the ecosystem their friends and family already use (iMessage lock-in). It's basically not even your choice at that point, it's more that you're forced to.
No, the world is not either smartphone or no-smarthone, it's not binary. The correct alternative is not having anti consumer vendor lock-in practices in smartphones.
We had PWA even before we had locked in app-stores but then Apple saw the dollar signs of locking people and app devs in their graded and gave up on PWA and doubled down on draconian lock-in.
I don’t think the qualifier was necessary. I think it was used to describe the obvious nature of anyone owning the sole software distribution means on their platform, it gives them a de facto monopoly on that means as opposed to a natural? monopoly where they just got so big they fell into it.
Apple unquestionably monopolizes the App Store. Whether or not you consider it a substantial monopoly is it's own thing, but the App Store itself is segregated from competition.
Nobody will use an iPhone without Uber, their banking and transit apps. Apple used to think all 3rd party services will be accessed via Safari, but boy was that a long time ago.
> if Apple finds it harder and harder to monetize the App Store through fees, then THEY might eventually decide to switch to privacy violating advertising as their revenue strategy.
They already do this right now anyway, with App Store ads. Apple doesn't care about privacy. It cares about money, and it makes money any way it can. Unlike pretty much every other phone or tablet, iOS devices don't let you install apps without telling Apple. That privacy violation exists because it makes Apple money.
> if Apple finds it harder and harder to monetize the App Store through fees, then THEY might eventually decide to switch to privacy violating advertising as their revenue strategy.
Schiller argued that App Store should be free after a billion dollars was earned from it. Apple execs pretend they don't even know how much money App Store makes or loses.
And App Store is already monetized: Apple's hardware pays for everything, and more.
It's a good argument but I'm not sure it'll hold up. Apple went to great lengths to clamp down on privacy-abusing advertising via ATT. I think Facebook have been quite open about the huge revenues it cost them alone.
In the short-term, this happened. Facebook recovered though, as what Apple actually accomplished was destroying all of the smaller providers who didn't have huge first party datasets for modelling.
It's similar to the notion that killing third party cookies is basically a gift to Facebook and Google.
And lets be honest here, Apple themselves are not subject to ATT and (potentially coincidentally) have a rather large ads business. Many moons ago Apple suddenly started becoming the number 1 provider of installs on Apple as they claimed credit for the click to install which is also bonkers.
One can agree that targeted advertising is bad but also note that Apple made these "privacy focused" decisions for commercial rather than idealistic reasons.
It's really the most interesting thing I read in this screed, the rest of which seemed to be clueless BS like, "changes to App Store policies that will improve the state of the internet."
No. Unlike Google, Meta, and Amazon, Apple is not a gatekeeper to the Internet. They are the gatekeeper to one thing: their own app store. It's tiresome to hear the same anti-"big-tech" hysteria aimed at Apple. They aren't a monopoly, period.
But back to this: "The App Store policies hurt privacy"
No, they don't. The plaintiff bases this admittedly novel whine on the fact that Google and its ilk make money on things other than their software. So by that logic, every company that doesn't conduct business through its app hurts every company that does. Give us a break.
So what? Controlling how many fart apps are available on its platform does not make Apple a gatekeeper to any part of the Internet. Apple does not funnel Web traffic into its properties.
Think it through: Amazon dominates shopping-search results. It easily swamps any other shopping portal or indie vendor. So it is a de facto gatekeeper to a huge portion of online shopping. You're citing Apple's alleged 58% of phone-platform share as making it a gatekeeper to the Internet? Amazon is actually an Internet-based entity with huge dominance in its field.
Meanwhile Meta (Facebook) IS the Internet for a large (less tech-savvy) portion of the public. Akin to when AOL slapped Internet access onto its platform.
Apple controls its app store. Is it douchey as hell to developers? Yep. Has it antagonized governments and flouted legal rulings? Yep. Has it lied about App Store search? Yep.
But it is not an Internet gatekeeper or a monopoly.
The Internet and the Web are not the same thing. Apple absolutely gatekeeps the ability to run non-HTTP internet connected apps. Your statement that Apple is not a “gatekeeper to any part of the Internet” is simply false.
How is that gatekeeping? Does Webkit prevent you from visiting certain sites, or funnel you to others?
No.
And the browser-engine ban is being lifted; something that sounded good at first, until you realize that Chrome is already a cancer on the Web that is only held back to the dominance of Safari on mobile. Cheerleading for a total takeover by Chrome isn't smart if you think it through.
In practice I think he is right unfortunately. Most people would just run Chrome and more websites would require Chrome since they could just tell Apple users to deal with it, making the mono-culture even worse.
If you serve web pages, you likely serve many of your users on their Apple devices. And you can’t support features of the web for those users if Apple doesn’t want them to have those features, and prohibits browsers with other engines that do support them on their App Store, and prohibits other sources of web browsers.
Yes you did: "Try shipping a web browser not based on Apple’s browser functionality on iOS. See how free of gatekeeping the internet is."
And no, it isn't. Not supporting certain browser features does not direct traffic or even deny access. So you obviously don't know what gatekeeping is.
> They are the gatekeeper to one thing: their own app store.
They also control the OS and don't allow side-loading or other app stores (without putting absurd obstacles in the way) So in the end they completely control the devices they sell.
The end user is _NOT_ forced to buy into their ecosystem though.
There are alternatives, and depending on where on this globe you ask, apple is not even the one with the biggest marketshare.
So while I'm not against the general outcry and need for change, it is not just apple. The problem is way way bigger, and it should not be put onto one of the players in my opinion.
Create regulation/platform that sets the limits, then put ALL players into the process not just one
The difference is that we can easily try to pretend that game consoles are not general purpose computers. And doing so is not going to cause issues to the fabric of the society.
I'm not so sure it's the best argument but I get what they're saying. The problem is, the argument basically says all free apps are bad, all paid apps are good. The price of an app isn't a good indicator of its intentions.
No, it doesn't say that. It says free apps are not hurt by this as much as paid apps, so charging a percentage fee to maintain the app store disproportionately hurts paid apps.
It's proton suing. That's their entire case. They are a respecting privacy product that is unduly burdened while privacy abusing products are not. (their argument)
Huh. I’ve never seen it framed this way and it might be the most compelling argument I’ve heard to date. It’s not simply a debate about whether a company should be allowed to be vertically integrated in isolation, but whether that vertical integration allows them to exert unfair distorting pressure on the free markets we are trying to protect.