35 States Dispute iOS App Store 'Monopoly'

John Lister's picture

Thirty five states have backed a legal challenge to the way Apple runs its app store. The specific case centers on a game but could affect the entire way app stores operate.

Unlike other mobile systems, most users can only install software on iPhones and iPads through the official Apple app store. Apple not only takes a cut of the purchase price of any paid apps, but also requires developers to pass on 30 percent of any in-app purchases such as upgrading an app to remove ads or selling digital content.

Epic Games, maker of the Fortnite game, tried to get round that rule by including a message and link in its iOS game sending players to buy in-game items from its web store. Apple said that breached its rules and removed the game from the app store altogether.

Monopoly Market Disputed

Epic then sued, arguing that Apple was abusing its monopoly power as the only place to distribute games to iOS users. Among other legal debates, that raised the issue of whether market share for apps should be based on iOS devices only or among all mobile operating systems.

The court ruling in the case was somewhat mixed. A judge said Apple must let developers tell app users how to buy digital content through methods other than an in-app purchase. However, the judge also said Apple did not have to reinstate Fortnite in the app store in this case. The ruling also said Apple did not hold a monopoly in the market for "digital mobile gaming transactions."

That's now led to both sides filing appeals: Apple against the ruling on developers giving information to users and Epic on the monopoly issue.

States Weight In

Several organizations and groups have now filed amicus briefs in the case: in effect, statements or legal arguments designed to back up one side (Epic in this case). These include the Department of Justice, Microsoft and the Electronic Frontier Foundation. (Source: bbc.co.uk)

The latest comes from the attorney generals of 35 states, who point out a bizarre legal technicality in the case. The court ruled that Apple's rules for app developers are a "unilateral contract" set out by one side only, which means they don't come under the most serious antitrust rules.

The attorney generals say that because the app developers make a binding agreement to follow the rules, it should be treated as an ordinary mutually-agreed contract. Counter-intuitively that means the stricter antitrust rules apply and the monopoly issue becomes more significant. (Source: theregister.com)

What's Your Opinion?

Do you consider Apple to hold a monopoly in its app store? If so, should it face any limitations in the rules it applies to developers? Should Apple be forced to let users install iOS apps from other sources?

Rate this article: 
Average: 4.8 (6 votes)


efpedro_9865's picture

I disagree with the exorbitant amount of commission that Apple takes 30 %. That is multiples of what the mafia and such other illegal organizations charged and is a crime. It should be illegal to charge SOOO MUCH.

DavidInMississippi's picture

First, a 30% commission is pretty much standard for DISTRIBUTORS of created content. Contrast this with music publishers, who offer a mere 8% to 10% royalty to composers for their works. The people who build the devices, and build the network of customers should be fairly compensated for their work.

Second, creators of apps are always free to NOT agree to Apple's terms. Sure, they'll lose the Apple device market, which is huge, but don't forget, Apple BUILT that market for them. Should that be simply ignored?

Third, and this is a biggie, before any app (or in-app purchase) can be listed on the App store, it must pass a rigorous security evaluation, where Apple software engineers make sure there are no "holes" (such as back doors) into the app that will allow slimeball hackers access to the workings of the device and thereby enable them to steal information or plant malware. This is a HUGE part of the appeal of iPhones and iPads, the fact that they are very secure and you can be as assured as possible that your device won't be hacked. This is part of the reason they charge a 30% commission on sales.

FINALLY, I'm not sure I agree about the terms that prohibit app users from buying "stuff" for their app somewhere other than through Apple. The reason I'm not sure is because I don't know if these out-of-app purchases might be able to be used to install malware or back doors onto the devices. If that IS possible, then there's no way Apple should permit it. If it is NOT possible, such as "buying coins for your account," then they should rethink their position. I'm not enough of a software engineer to say whether this is possible, but I'm sure some out there can say so.

IF it turns out that out-of-app purchases CAN provide a back door enabling someone to hack into a device, then there's no way they should be permitted. Apple's entire reputation and future could hinge on this.

If courts rule that they must allow these purchases, then Apple should pop up a prominent warning each time that app is launched: "WARNING: Making purchases outside the app can make your device vulnerable to hacking. If you decide to proceed with such purchase, all warranties will be voided and you assume all responsibility for the continued good health of your device."

I would be interested if anyone can make a valid counter-argument to these points.