5 ms·

So, why do you think Apple is doing this? Presumably their lawyers aren't stupid and Apple does not want to be fined 10% of their worldwide annual turnover.

whamlastxmas 3y ago
It’s “see what we can get away with” tactics in addition to stalling
- Maxion 3y ago
  Yep, the app store is also very profitable for them so they can afford to have this go to the courts. They want the minimum amount of regulation possible, so they first lobby the regulators to apply as little regulation as possible and that the regulation that is applied is as vague as possible. Then when it comes time for implementation, they make an implementation that isn't exactly 100% in accordance with the regulation and wait to be taken to court. Then they get to argue with a judge related to what is and isn't in accordance with the regulation. If they get lucky, the judge will rule partly to them, which gives them less strict regulation. The EU lawmakers can then re-vamp the law to make it stricter, and the process continues again.
spacebanana7 3y ago
I wonder whether Apple would rather lose the EU or lose the App Store monopoly. The EU might not be worth 10% of annual turnover.
- Wowfunhappy 3y ago
  But Apple would only be losing the monopoly in the EU. The theoretical maximum amount this could cost Apple is 100% of EU app store revenue. If Apple pulls out of the EU, they will definitely lose that EU app store revenue, and will additionally lose all EU hardware revenue.
  - spacebanana7 3y ago
    Apple would be showing weakness by capitulating to European regulators, creating a real risk other countries would follow.
    - hu3 3y ago
      Apple already showed weakness capitulating to China debatable demands in exchange for revenue, multiple times. "Apple tells suppliers to use 'Taiwan, China' or 'Chinese Taipei' to appease Beijing" https://www.theregister.com/2022/08/05/apple_warns_suppliers_in_taiwan/ https://www.theregister.com/2022/08/05/apple_warns_suppliers... "The problem with canceling Jon Stewart: Apple bowed to Chinese government censorship" https://www.usatoday.com/story/opinion/voices/2023/10/26/jon-stewart-apple-tv-show-canceled-china-government-censorship/71298946007/ https://www.usatoday.com/story/opinion/voices/2023/10/26/jon... "Apple pulls Taiwanese flag emoji from iPhones in Hong Kong" https://www.latimes.com/business/story/2019-10-08/apple-taiwan-flag-emoji-iphones-hong-kong https://www.latimes.com/business/story/2019-10-08/apple-taiw... Even Google didn't went that far and withdrew from China. "In early 2010, Google shut down its Chinese website altogether after failing to reach an agreement with Beijing over how much content to censor in search results." https://observer.com/2022/10/alphabet-shut-google-translate-china-big-tech/ https://observer.com/2022/10/alphabet-shut-google-translate-...
      - spacebanana7 3y ago
        I believe giving into China was a mistake for Apple executives ethically, commercially and politically. In the long term they’ll be forced to give up all the commercial surpluses to local mega apps by the government, and the political/ethical problems require no elaboration.
mil22 3y ago
For the same reason Trump has opened so many legal challenges in his trials. It's a stalling tactic. Every year Apple can continue their App Store business monopoly without adequate competition is another year Apple earns $100B (or whatever their profit is - Apple does not disclose the figures [1]). They are trying to delay any threat to that as long as possible. No doubt they have done their cost/benefit calculations very carefully, weighing the potential fines and legal fees against the revenue they will be able to keep earning this way, and they have decided this is the best way forward. [1] https://www.marketwatch.com/story/how-profitable-is-apples-app-store-even-a-landmark-antitrust-trial-couldnt-tell-us-11622224506 https://www.marketwatch.com/story/how-profitable-is-apples-a...
- greedo 3y ago
  Apple's profit is definitely public information since they're a publicly traded company. In 2023, they reported $97B in profit.
  - mil22 3y ago
    If you can find specific numbers on Apple's profit from the App Store, I would be very interested to see them. Of course Apple's total profit is public information, but they don't break it down so specifically. The best I can find is that App Store revenue is on the order of $100B, but the profit margin has not been disclosed (though speculated by Epic to be ~80% [1]). [1] https://www.marketwatch.com/story/how-profitable-is-apples-app-store-even-a-landmark-antitrust-trial-couldnt-tell-us-11622224506 https://www.marketwatch.com/story/how-profitable-is-apples-a...
    - greedo 3y ago
      Considering that the Google bribe to Apple for search is $18B, I can't see the App Store profit margin being 80%. That would imply that Apple makes zero margin on all hardware and other services.
    - Wowfunhappy 3y ago
      Let's assume for the sake of argument that: • Apple makes 100% of its profit from the App Store. • This profit comes equally from the US, EU, China, and the entire rest of the world. (It doesn't, the EU is a smaller market.) • Half of EU users would stop using the App Store entirely if they were allowed to side-load. • Apple's keeps 75% of its revenue as profit. By my calculations, this would mean Apple's EU App Store monopoly is worth 9.375% of the company's worldwide revenue. Please let me know if I made an error in my math. Why is Apple willing to risk 10% of its worldwide revenue to protect 9.375% of its worldwide revenue? Okay, I guess maybe Apple thinks it's unlikely to be fined the maximum amount, and is willing to roll the dice. But I also chose ludicrously favorable numbers here.
wahnfrieden 3y ago
To protect their monopoly
- neither_color 3y ago
  I'm all for opening the app store and getting a new iphone browser but I'm skeptical of calling them a monopoly when they're not even a plurality of market share: https://www.statista.com/statistics/632599/smartphone-market-share-by-vendor-in-europe/ https://www.statista.com/statistics/632599/smartphone-market...
  - arunkumar9t2 3y ago
    How about "gatekeeper"
- kmlx 3y ago
  what monopoly? https://www.counterpointresearch.com/insights/global-smartphone-share/ https://www.counterpointresearch.com/insights/global-smartph...
  - hedora 3y ago
    They and Google have a duopoly on smartphone operating systems. Both use anti-competitive tactics to maintain the duopoly. Anti-trust law probably needs to be updated to take platforms into account. In the past (pre-software), the first sale doctrine provided a decent check valve on this sort of crap. It was the idea that, if you sold a thing to a person, then you no longer owned it. I think the "first-" part of the name is there because anti-resale provisions were commonly tacked onto an agreement between the manufacturer and initial purchaser. For instance, a tractor manufacturer would put a trademarked logo on a copyrighted picture on the side of a patented gear box, and then, as part of the condition of the sale to the farmer, they'd say the trademark, copyright and patent licenses were non-transferrable. The courts correctly ruled that this was bullshit, and banned it. We need to go back to something like that. Then (since the DMCA would be ruled unenforceable, and things like the CFAA would apply to device manufacturers), you'd be able to modify your phone, and the manufacturer would not be allowed to retaliate. At that point, Google and Apple's duopoly would give them a lot less market power. For one thing, once Google "sold" android to phone manufacturers, they couldn't use contracts to prevent the manufacturers from making a mozilla phone, etc, like they do today. Similarly, iPhone parts couldn't contain mechanisms preventing their use in other devices, because hardware DRM would not only be unprotected by the DMCA, but flat-out illegal.

whamlastxmas 3y ago

It’s “see what we can get away with” tactics in addition to stalling

Maxion 3y ago
Yep, the app store is also very profitable for them so they can afford to have this go to the courts. They want the minimum amount of regulation possible, so they first lobby the regulators to apply as little regulation as possible and that the regulation that is applied is as vague as possible. Then when it comes time for implementation, they make an implementation that isn't exactly 100% in accordance with the regulation and wait to be taken to court. Then they get to argue with a judge related to what is and isn't in accordance with the regulation. If they get lucky, the judge will rule partly to them, which gives them less strict regulation. The EU lawmakers can then re-vamp the law to make it stricter, and the process continues again.

spacebanana7 3y ago

I wonder whether Apple would rather lose the EU or lose the App Store monopoly. The EU might not be worth 10% of annual turnover.

Wowfunhappy 3y ago
But Apple would only be losing the monopoly in the EU. The theoretical maximum amount this could cost Apple is 100% of EU app store revenue. If Apple pulls out of the EU, they will definitely lose that EU app store revenue, and will additionally lose all EU hardware revenue.
- spacebanana7 3y ago
  Apple would be showing weakness by capitulating to European regulators, creating a real risk other countries would follow.
  - hu3 3y ago
    Apple already showed weakness capitulating to China debatable demands in exchange for revenue, multiple times. "Apple tells suppliers to use 'Taiwan, China' or 'Chinese Taipei' to appease Beijing" https://www.theregister.com/2022/08/05/apple_warns_suppliers_in_taiwan/ https://www.theregister.com/2022/08/05/apple_warns_suppliers... "The problem with canceling Jon Stewart: Apple bowed to Chinese government censorship" https://www.usatoday.com/story/opinion/voices/2023/10/26/jon-stewart-apple-tv-show-canceled-china-government-censorship/71298946007/ https://www.usatoday.com/story/opinion/voices/2023/10/26/jon... "Apple pulls Taiwanese flag emoji from iPhones in Hong Kong" https://www.latimes.com/business/story/2019-10-08/apple-taiwan-flag-emoji-iphones-hong-kong https://www.latimes.com/business/story/2019-10-08/apple-taiw... Even Google didn't went that far and withdrew from China. "In early 2010, Google shut down its Chinese website altogether after failing to reach an agreement with Beijing over how much content to censor in search results." https://observer.com/2022/10/alphabet-shut-google-translate-china-big-tech/ https://observer.com/2022/10/alphabet-shut-google-translate-...
    - spacebanana7 3y ago
      I believe giving into China was a mistake for Apple executives ethically, commercially and politically. In the long term they’ll be forced to give up all the commercial surpluses to local mega apps by the government, and the political/ethical problems require no elaboration.

mil22 3y ago

For the same reason Trump has opened so many legal challenges in his trials. It's a stalling tactic. Every year Apple can continue their App Store business monopoly without adequate competition is another year Apple earns $100B (or whatever their profit is - Apple does not disclose the figures [1]). They are trying to delay any threat to that as long as possible. No doubt they have done their cost/benefit calculations very carefully, weighing the potential fines and legal fees against the revenue they will be able to keep earning this way, and they have decided this is the best way forward. [1] https://www.marketwatch.com/story/how-profitable-is-apples-app-store-even-a-landmark-antitrust-trial-couldnt-tell-us-11622224506 https://www.marketwatch.com/story/how-profitable-is-apples-a...

greedo 3y ago
Apple's profit is definitely public information since they're a publicly traded company. In 2023, they reported $97B in profit.
- mil22 3y ago
  If you can find specific numbers on Apple's profit from the App Store, I would be very interested to see them. Of course Apple's total profit is public information, but they don't break it down so specifically. The best I can find is that App Store revenue is on the order of $100B, but the profit margin has not been disclosed (though speculated by Epic to be ~80% [1]). [1] https://www.marketwatch.com/story/how-profitable-is-apples-app-store-even-a-landmark-antitrust-trial-couldnt-tell-us-11622224506 https://www.marketwatch.com/story/how-profitable-is-apples-a...
  - greedo 3y ago
    Considering that the Google bribe to Apple for search is $18B, I can't see the App Store profit margin being 80%. That would imply that Apple makes zero margin on all hardware and other services.
  - Wowfunhappy 3y ago
    Let's assume for the sake of argument that: • Apple makes 100% of its profit from the App Store. • This profit comes equally from the US, EU, China, and the entire rest of the world. (It doesn't, the EU is a smaller market.) • Half of EU users would stop using the App Store entirely if they were allowed to side-load. • Apple's keeps 75% of its revenue as profit. By my calculations, this would mean Apple's EU App Store monopoly is worth 9.375% of the company's worldwide revenue. Please let me know if I made an error in my math. Why is Apple willing to risk 10% of its worldwide revenue to protect 9.375% of its worldwide revenue? Okay, I guess maybe Apple thinks it's unlikely to be fined the maximum amount, and is willing to roll the dice. But I also chose ludicrously favorable numbers here.

wahnfrieden 3y ago

To protect their monopoly

neither_color 3y ago
I'm all for opening the app store and getting a new iphone browser but I'm skeptical of calling them a monopoly when they're not even a plurality of market share: https://www.statista.com/statistics/632599/smartphone-market-share-by-vendor-in-europe/ https://www.statista.com/statistics/632599/smartphone-market...
- arunkumar9t2 3y ago
  How about "gatekeeper"
kmlx 3y ago
what monopoly? https://www.counterpointresearch.com/insights/global-smartphone-share/ https://www.counterpointresearch.com/insights/global-smartph...
- hedora 3y ago
  They and Google have a duopoly on smartphone operating systems. Both use anti-competitive tactics to maintain the duopoly. Anti-trust law probably needs to be updated to take platforms into account. In the past (pre-software), the first sale doctrine provided a decent check valve on this sort of crap. It was the idea that, if you sold a thing to a person, then you no longer owned it. I think the "first-" part of the name is there because anti-resale provisions were commonly tacked onto an agreement between the manufacturer and initial purchaser. For instance, a tractor manufacturer would put a trademarked logo on a copyrighted picture on the side of a patented gear box, and then, as part of the condition of the sale to the farmer, they'd say the trademark, copyright and patent licenses were non-transferrable. The courts correctly ruled that this was bullshit, and banned it. We need to go back to something like that. Then (since the DMCA would be ruled unenforceable, and things like the CFAA would apply to device manufacturers), you'd be able to modify your phone, and the manufacturer would not be allowed to retaliate. At that point, Google and Apple's duopoly would give them a lot less market power. For one thing, once Google "sold" android to phone manufacturers, they couldn't use contracts to prevent the manufacturers from making a mozilla phone, etc, like they do today. Similarly, iPhone parts couldn't contain mechanisms preventing their use in other devices, because hardware DRM would not only be unprotected by the DMCA, but flat-out illegal.