App Store News: Antitrust Updates
Fortnite publisher Epic Games has once again appealed the decision set forth by the District Court of the Northern District of California on September 10th this year. Apple and Google are also facing increased regulations tied to the American Innovation and Choice Online Act that was approved to move to the Senate. While reforms to these giant tech companies will be landscape changing if implemented in the U.S., other countries are already taking measures to limit the powers of the mobile tech duopoly.
Epic Games is seeking to overturn September's ruling that Apple does not qualify as having a monopoly on the iOS App Store. Judge Gonzalez Rogers stated in her ruling "The evidence does suggest that Apple is near the precipice of substantial market power, or monopoly power, with its considerable market share." She stated that perhaps Apple was only saved because Epic did not focus on this topic.
It is over this ambiguity that Epic has based its appeals to vacate that prior ruling. Epic claims that judge Gonzalez Rogers’s decision was in error and that Apple's conduct and market power in the iOS App Store break federal antitrust laws.
On the other side of the aisle, Apple requested a stay be put on the injunction resulting from September's ruling, which would have allowed developers to place links to other payment options aside from IAPs. The stay was eventually granted and developers will not yet be able to place these external links. The aspect of the ruling which allows developers to communicate other pricing options via email will remain.
It is yet unknown if the courts will be persuaded to take this case back up considering. So far the District Court for the Northern District of California has been more sympathetic to Apple in this case. The federal government seems to have a different view of big tech companies' antitrust practices though.
American Innovation and Choice Online Act
Senator Amy Klobuchar introduced the American Innovation and Online Choice Act on October 18th of last year. Senator Klobuchar is backed by a bipartisan committee in pursuit of limiting the immense sway that big tech companies currently exert on many markets. In particular, this bill is concerned with self-preferential treatment by large platforms that have other, smaller companies fully dependent on them.
From the American Innovation and Choice Online Act, SEC. 2. UNLAWFUL CONDUCT. (b) Unlawful Conduct:
“(3) use non-public data that are obtained from or generated on the covered platform by the activities of a business user or by the interaction of a covered platform user with the products or services of a business user to offer, or support the offering of, the covered platform operator’s own products or services that compete or would compete with products or services offered by business users on the covered platform;”
What does this mean for developers? Since the inception of the iTunes Store, there have been instances of publishers blatantly copying app ideas from competitors. This can be infuriating for the innovative developers who are being copied, but it becomes a much larger issue when the copycat is the multi-billion dollar company on whose platform their very livelihoods rely.
The bill goes on to state that these large tech companies may not restrict users to a single ecosystem for their accounts nor give preferential treatment to users who have purchased other devices from them. This reads particularly geared towards Apple and their "walled garden" ecosystem.
Another proposal in this section that has historically been poorly received by these tech companies in question regards default or stock applications. The bill reads:
“(5) unless necessary for the security or functioning of the covered platform, materially restrict or impede covered platform users from un-installing software applications that have been preinstalled on the covered platform or changing default settings that direct or steer covered platform users to products or services offered by the covered platform operator;”
Apple and Google have both made statements pleading with lawmakers to vote against the bill. Apple CEO Tim Cook called Senator Ted Cruz on Wednesday, where they discussed the bill's supposed impact for 40 minutes. Google Chief Officer Kent Walker released a blog entitled 'The harmful consequences of Congress's anti-tech bills' which stresses that there will be, according to Google, unintended harmful consequences if the bill is passed into law.
Apple, Google, and a handful of other impacted tech companies cite an increased risk of security vulnerabilities that could result from the proposed policy changes. While there is still a long way to go, if this bill passes into law it will have an enormous impact on the global tech landscape.
Apple has been the center of antitrust litigation, investigation, and regulations worldwide. The Netherlands Authority for Consumers and Markets (ACM) joined many worldwide governments in finding Apple guilty of violating national competition law. Apple’s IAP policy was deemed illegal by the ACM, and the Dutch court ordered Apple to reform its policy by January 15th of this year.
Apple agreed to allow dating app developers in the Netherlands to offer non-IAP payment methods for users. Originally the Cupertino tech Giant sought an injunction against the order in December. The Dutch court largely rejected Apple's arguments which led to Apple finally giving ground in their in-app purchasing policy.
The growing success of new regulations across the world, along with the unusually bipartisan support of the same proposed laws in the US, seems a bellwether for impending changes in the global tech industry.
- Epic Games approached the Ninth-Circuit Court on Thursday to appeal Judge Yvonne Gonzalez Rogers’s September verdict
- The American Innovation and Choice Online Act was approved to move to Senate in a 16 - 6 majority vote with bipartisan support
- Apple has been forced to allow dating apps in the Netherlands to offer alternative payment methods to Apple's In-App Purchase
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