The App Store is Ruled by Anti-Competitive Policies
Apple uses its control of the iOS operating system to favor itself by controlling the products and features that are available to consumers. Apple requires equipment manufacturers to limit options, forces developers to sell through its App Store, and even steals ideas from competitors. Below outlines two case studies from Tile and Kindle that illustrate these monopolist behaviors.
Case Study: Tile
Apple has manipulated its rules and policies to disadvantage Tile, a popular Bluetooth finding hardware and app developer, in favor of its competing Find My App.
In a scenario that harkens back to the browser wars of the 90s, Apple pre-installs Find My by default on all iOS devices and renders it impossible to delete. In addition, as reported by The Washington Post, Apple made changes to its Find My app to compete more directly with Tile. At the exact same time, Apple made changes to iOS that made it harder for consumers to access the location data needed for Tile to work, while leaving Find My’s streamlined data access intact. Apple also simultaneously began serving disarmingly frequent prompts to Tile customers to disable Tile location data access, leaving the consumer with no clear explanation of how to accurately assess and control their location data settings. Of course, no similar prompts were served to turn off Find My.
Around the same time, credible reports began surfacing that Apple was planning to launch Tile-like Bluetooth finding hardware that would leverage ultra-wideband (UWB) chips in iPhone 11 devices. UWB is a non-proprietary technology that enhances the finding experience. Yet, Apple is prohibiting competing apps like Tile from using UWB — ultimately denying equitable technology access to customers.
In its usual refrain against similar complaints, Apple responded that its anticompetitive behavior is justified by a concern for consumer privacy. However, it’s widely known that Apple pays close attention to privacy when it serves its competitive interest to do so. And not so much when it doesn’t.
A perfect example of Apple’s abuse of its market dominance to eliminate competition is its new Find My Network. Couched as a pro-competitive concession, Apple recently announced it will allow companies to access Find My Network data to the same extent as Apple. Yet again, the details prove that Apple has ulterior motives.
Buried within the Find My Network rules is the requirement that access to Find My Network data requires the use of the Find My app to the exclusion of competing apps like Tile. Apple will also own the relationship with the Tile or competing app customer. Clearly the Find My Network move was aimed at eradicating competition at the app level while simultaneously bolstering Find My.
Worse yet, with the Find My Network, consumers lose the ability to use the Tile service across iOS and Android. This means if you use a Tile on the Find My Network to keep track of the family car keys, but one spouse uses an iPhone and the other an Android, only one of them is allowed to locate their keys. Apple shouldn’t have this much power over personal experiences and activities — no one gave them the power and regulators need to ensure the anti-competitive behavior is kept in check.
Case Study: Kindle
The Kindle’s popularity for ebook reading is well recognized, so too is Amazon’s virtual warehouse of reading material. It makes sense that Amazon allows its customers to read ebooks via Kindle hardware or the Kindle app. After all, customers pay for the content and should be able to use it wherever, whenever they choose.
However, if a Kindle customer wants to purchase an ebook from the Kindle iPhone app, they’re met with a confusing situation: consumers can search for books, even read samples, but there’s no option to purchase. In fact there are no instructions at all in the Kindle iPhone app informing consumers about how they can purchase ebook reading material. Is this just an odd oversight by Amazon, one of the most sophisticated companies in the world? Or is there something more nefarious happening here?
Unfortunately, this is another example of Apple stifling consumer choice and control to advantage its own ecosystem. It’s the latter. Apple prevents Amazon from both selling books through the Kindle app available on iOS and doesn’t allow Amazon to inform consumers on how to make the purchase. Yet, it’s likely the very same books are available for purchase directly through the iBooks app. Consumers are well aware these ebook shenanigans have existed for years and have accepted the clunky process to get ebooks on an iPhone.
Unfortunately, this egregious anti-competitive behavior doesn’t stop with ebooks. Apple’s control of the iOS operating system gives the company the unfair ability to favor itself as it approves the products and features that are available to consumers and go as far as manipulating search results to suppress competition. This requires equipment manufacturers to limit their own distribution options and forces developers to sell through the iOS app store.
Apple’s tight grip on the app stores extends beyond self-favoritism. It allows Apple to outright steal developers’ ideas and make them its own. Not only did Apple steal BlueMail’s pioneering anonymous messaging capabilities—days later, Apple removed BlueMail from the Mac App Store to prevent BlueMail from readily reaching consumers and competing with Apple’s own products. Apple’s misappropriation of BlueMail’s ideas is part of a long and well-documented pattern of theft by Apple. Steve Jobs, Apple’s co-founder, famously admitted, “We have always been shameless about stealing great ideas.”
Apple shouldn’t have this much power over personal experiences, and regulators need to ensure this type of anti-competitive behavior is kept in check.
30% “App Tax” on Creators and Consumers
For most purchases made within its App Store, Apple takes 30% of the purchase price. No other transaction fee — in any industry — comes close. This app tax cuts deeply into consumer purchasing power and developer revenue. This app tax is especially unfair when it is imposed on apps that compete directly with those sold by Apple, driving up their prices and putting them at a distinct competitive disadvantage.