• November 28, 2021

Changes to Apple’s App Store do not satisfy Fortnite regulators, Spotify or Epic Games

Apple, criticized by developers and regulators for the way it runs its powerful App Store, is changing some of its rules, through a proposed court settlement.

Is that a big deal or a hamburger at all?

It depends on who you ask. Apple says it is giving companies like Spotify and Epic Games, the developer behind Fortnite, something they have always asked for. Those companies and other tech critics say it’s not enough.

And some of the early press coverage of the news is all over the place. “Apple will allow developers to accept payments outside of the App Store, in a major concession amid antitrust pressure,” he said. Washington Post incorrectly reported last night. Today’s New Headline: “Apple Relaxes Rules for Developers on Major Concessions Amid Antitrust Pressure.”

And the real answer is … this is somewhere between big trouble and a burger with nothing on it.

But the real thing history It’s that scrutiny on how Apple runs its store, and if it’s preventing companies from offering real competition to both the App Store and Apple-owned services like Apple Music, isn’t going away. If you are an Apple user who only cares how much you have to pay for something like Spotify, this may be of interest to you.

And if you’re someone who cares about the power of big tech companies to set rules that affect millions of people around the world, it’s also worth a look.

Here’s a quick version of the news: On Thursday night, Apple announced a settlement with lawyers in a class action lawsuit filed by software developers, promising to “make the App Store an even better business opportunity for developers, while it keeps the market safe and reliable users love it. ”

There are several elements in the proposed deal, which have yet to be approved by a federal judge, but the most important is that Apple is giving developers the ability to send emails to customers using their apps on Apple’s iOS devices and tell them they do. You can save money by paying for things other than Apple apps.

The reason this is significant is that so far Apple, which is left with a cut of up to 30 percent of the money developers make when they sell something through an Apple app, has not allowed developers to inform customers about cheaper alternatives. Now they can.

So Spotify, for example, could sell a monthly subscription to its streaming service for $ 13 through an Apple app, but then it could immediately email someone who signed up for that service to tell them that they could get the same for $ 10 a month if he signed up. upon Spotify.com.

So now Spotify, which has filed an antitrust complaint against Apple with the European Union, and Epic, which has sued Apple for antitrust violations in the US, are getting something they want: the ability to tell their customers. own customers who can go somewhere. the rest.

But this settlement does not appease any company. They are moving forward with their legal campaigns, for multiple reasons: They both, for example, want to be much more direct about how they tell customers that they can go elsewhere, by telling them on the app.

Right now, for example, if you’re an iPhone user wanting to upgrade your free Spotify service to a paid one, Spotify simply tells you that you can’t do it in your app, with no further instructions on how to do it. that. “We know. It’s not ideal,” shrugs the service.

But Spotify’s problem with Apple goes beyond how it can advertise. A major part of the music service’s complaint is that it has to compete at a significant disadvantage with Apple’s own music streaming service because Apple does not have to pay a tax to the App Store for its own services.

Meanwhile, Epic wants much more than the ability to direct customers to its own site. You say you want to run your own app store within the Apple App Store and then eventually run your own competing app store. And Apple doesn’t want to be a part of that.

Meanwhile, other critics argue that even Apple’s email concession may not be that significant, requiring developers and users to take many additional steps. Just having someone open a promotional email takes a lot of effort these days; Think about your inbox and the amount of clutter you routinely ignore.

In the meantime, if you’re an Apple advocate, you can argue that developers should be happy with whatever concessions Apple offers because it’s Apple’s store and Apple’s devices, and Apple should be able to do whatever it wants on its own property. If you go to a Walmart, for example, you won’t find signs saying you can buy Tide for less at Target or Amazon.

Or, more beneficially: You can argue that Apple’s App Store has provided developers with a large market of iPhone and iPad users – “an economic miracle,” as Apple executive Phil Schiller puts it in the statement. press release from Apple, and has allowed Apple to set the rules. Around your own store it seems like a reasonable trade.

All of this debate underscores how much pressure Apple is now under from both developers and regulators, which is quite new. Apple’s App Store was literally an afterthought, it didn’t appear until a year after the iPhone’s debut in 2007, but it has evolved over the years to become a major distribution funnel for developers and probably a real profit center for Apple. generating $ 15 billion in revenue last year. AND developers have complained on app store rules for at least a decade.

But Apple didn’t feel any pressure to advance any of this until very recently. However, now that regulators and politicians talk about controlling big tech in general, they have spent part of their time concentrating on Apple and its store, and whether the company’s rules are too rigid and anti-competitive.

EU regulators have already said they think Apple is violating antitrust rules, although they have not made a final decision. Sen. Amy Klobuchar has made Apple a top target in her antitrust arguments, she co-sponsored a bill that would limit the way both Apple and Google run their app stores. Through his press office, he says that last night’s changes will not be enough:

“As mobile technologies have become essential to our daily lives, it has become clear that Apple, along with a few other gatekeepers, have immense control over the application market. This power creates serious competition problems and impacts both consumers and application developers. This new action by Apple is a small first step in addressing some of these competition concerns, but more needs to be done to ensure an open and competitive mobile app market, including common sense legislation to establish traffic rules for retail stores. key applications “.

State lawmakers, meanwhile, are increasing their own challenges to Apple’s rules, and the Biden White House seems very keen on rolling back the power of Big Tech in general.

Which means this is unlikely to be the last App Store concession Apple will have to make. Whether you continue to make incremental or big, radical changes, it will tell us a lot about how motivated and effective Big Tech’s critics will be.

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