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Businesses The Almighty Buck The Courts Apple

US Top Court Leans Toward Allowing Apple App Store Antitrust Suit (reuters.com) 163

U.S. Supreme Court justices on Monday appeared open to letting a lawsuit proceed against Apple that accused it of breaking federal antitrust laws by monopolizing the market for iPhone software applications and causing consumers to overpay. From a report: The nine justices heard an hour of arguments in an appeal by the Cupertino, California-based technology company of a lower court's decision to revive the proposed class-action lawsuit filed in federal court in California in 2011 by a group of iPhone users seeking monetary damages. The lawsuit said Apple violated federal antitrust laws by requiring apps to be sold through the company's App Store and then taking a 30 percent commission from the purchases. The case may hinge on how the justices will apply one of its past decisions to the claims against Apple. That 1977 ruling limited damages for anti-competitive conduct to those directly overcharged rather than indirect victims who paid an overcharge passed on by others.
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US Top Court Leans Toward Allowing Apple App Store Antitrust Suit

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  • by JBMcB ( 73720 ) on Monday November 26, 2018 @01:13PM (#57702484)

    Every video game console maker has a monopoly on their own game stores. How is this different? Are they being investigated, too?

    • This is not an investigation. This is a class action lawsuit. I am sure that if Apple loses, all these video game consoles will get class action lawsuits against them too.

      Also, the way you write it make it sound like a defense of Apple. You can not use the fact that someone else jay walks to get out of a fine for jay walking. Similar thing here.

    • by Anonymous Coward

      Video games can still be purchased from retailers while apps cannot.

      • Video games can still be purchased from retailers

        Only the larger games get a physical release. Any console game whose scope is not big enough for a physical release is stuck on the console maker's paid download store.

      • That's besides the point. Whether you buy a PS4 game physically from a retailer or digitally via PSN, Sony gets a cut thanks to the licensing fees they charge for the privilege of publishing an officially licensed game for their platform. Likewise with Nintendo and Microsoft. The fact that you can buy a game from a different source doesn't change anything, other than obscuring the fact that the platform creator still gets their cut.

    • You can buy PlayStation 4 games at Walmart, on Amazon, GameStop, EA.com etc. Sony does not have a monopoly on PS4 games.

      • by tepples ( 727027 )

        How does one manufacture a working PlayStation 4 game disc to sell "at Walmart, on Amazon, GameStop" without going through Sony?

        • The relevant docs can be found here:
          https://partners.playstation.n... [playstation.net]

          They do not have a 30% royalty like Apple does.

          If the case against Apple is won by the plaintiffs, someone could try to file suit against Sony, though they'd have a weaker case.

          • without going through Sony?

            The relevant docs can be found here: [Sony Interactive Entertainment's website]

            They do not have a 30% royalty like Apple does.

            That's still going through Sony. According to help [service-now.com] linked from the question mark in the top right corner of the page you linked, this appears to incur more overhead than Apple, even if the overhead is payable to third parties as opposed to Sony or Apple.

            1. Unlike on Apple's platform, you need a corporation or LLC to get started: "(please be aware that we do not license sole proprietorships in the US, Japan, Asia Area)"
            2. Unlike on Apple's platform, you need mail hosting on your own domain, not iCloud or any

            • Yes, to get Sony's help, to have them believe you're actually a game company and not a crakz haxor, you need to have a company. That will cost about $250, you're right.

              Compare with Apple, where you can only buy from Apple's store. With Apple, ONE company can sell apps, Apple. With Sony, ANY company can sell games.

              "Any" is slightly more than "one".

              • by tepples ( 727027 )

                With Sony, ANY company can sell games.

                Are you referring to discs or to downloads? I was under the impression that 1. only PlayStation Store could sell downloads, and 2. Sony stopped manufacturing cartridges for its handheld [kotaku.com], leaving downloads as the only way to get new games onto PlayStation Vita.

                • I wouldn't know about who all makes / made cards for the Vita, but I know the major game companies ditched it a while back because few people use it.

                  In any event, the Vita hardly has a monopoly on handheld gaming, with the Nintendo 3DS series being far more popular, and phone / tablet Gam even more so. If Sony becomes the only company still trying to sell games for their failing handheld, who cares.

                  • by tepples ( 727027 )

                    In any event, the Vita hardly has a monopoly on handheld gaming, with the Nintendo 3DS series being far more popular, and phone / tablet Gam even more so.

                    Only Apple can sell games for iOS. Only Nintendo can sell games in Nintendo 3DS eShop, and only Nintendo can manufacture Nintendo 3DS Game Cards on publishers' behalf for "Walmart, on Amazon, GameStop, EA.com" to sell.

                    • > only Nintendo can sell games in Nintendo 3DS eShop

                      And only you can sell stuff in Tepples' shop. So what?
                      You can sell Nintendo 3DS games in your store. Nintnedo can sell them in their store, and I can sell them in mine. Contrast Apple - ONLY Apple can sell iOS applications. Walmart cannot sell them.

                      > only Nintendo can manufacture Nintendo 3DS Game Cards on publishers' behalf for "Walmart, on Amazon, GameStop, EA.com" to sell.

                      False. You can even easily buy individual blank cards at retail and put you

                    • by tepples ( 727027 )

                      Context for those following along: You are recommending developing and selling homebrew games for Nintendo 3DS as an alternative to developing for Apple iOS or PlayStation Vita.

                      You can even easily buy individual blank [Nintendo 3DS-compatible Game Cards] at retail and put your own game on them. Two popular brands are Gateway 3DS and Sky3DS.

                      I thought Nintendo was having the US International Trade Commission block imports of these adapters and/or issuing Nintendo 3DS system software updates that cause the system not to recognize them.

    • by Solandri ( 704621 ) on Monday November 26, 2018 @01:44PM (#57702646)
      This isn't just about Apple or video game consoles. Do you want a future where the only way to get software onto any device you buy is through the device manufacturer's store, where they charge a 30% tax^h^h^hfee? Or do you want a future where manufacturers only charge a token transaction fee to get software onto your device?

      Google/Android has the right model IMHO. If you don't feel confident in your knowledge about tech to protect yourself, you can stick to the Google Play store and rely on Google to protect you. But if you want you can strike out on your own and get apps from different stores, or side-load them. It is, after all, your phone, not Apple's. When a company completely locks down access to devices like Apple does, they essentially create a monopoly for themselves. Not a monopoly to consumers, but a monopoly to software sellers. The only way to sell stuff to iOS devices owners is via Apple's store. They've set themselves up as an unavoidable middleman, which is something that should never be allowed.

      Because the U.S. legal system operates based on case law, they don't have to go after video game consoles. If the lawsuit against Apple succeeds (and it holds up through appeals), then that sets a binding precedent. Any video game console maker attempting to fight off similar lawsuits would thereafter immediately lose in the first round of court because of the precedent. Or chipped printer ink cartridge manufacturers. Or manufacturers bricking devices repaired with third party screens.
      • Ugh, accidentally hit submit instead of preview.

        Or the biggest fish of them all - cable service monopolies. They argue they're not a monopoly because they don't own 100% of the customer market. But they do own 100% of the market to access the customers they have. Which is why they're able to pull off things like extort money from Netflix for access to those customers.
      • by Kjella ( 173770 )

        This isn't just about Apple or video game consoles. Do you want a future where the only way to get software onto any device you buy is through the device manufacturer's store, where they charge a 30% tax^h^h^hfee? Or do you want a future where manufacturers only charge a token transaction fee to get software onto your device?

        It's not Apple's job to create a better product than Apple, that's what competition is for. Has Apple interfered with the manufacture, distribution or sale of alternative smartphones? Has Apple refused or punished apps for being interoperable with alternatives? Has Apple abused their control over the platform to push out third party software in favor of their own products? If no, then I really don't see the problem because they've not interfered in the creation of a device that "only charge a token transact

        • Apple interfered with the manufacture, distribution or sale of alternative smartphones?

          This lawsuit is about "breaking federal antitrust laws by monopolizing the market for iPhone software applications." So, exactly which alternative I-phone did you have in mind?

      • you can stick to the Google Play store and rely on Google to protect you.

        But Google don't protect you at all here - there's no review process, and anybody can upload any app to the store and have it globally available in minutes. If you want a store that does actively vet what's available, then you have no choice but to use Apple devices. Added to which, the ecosystem that Apple have created has no competitor. Apple Photos syncs all your edits, across all your (apple) devices, in a non-destructive way. This alone is worth the price of admission.

        Plus, you can install non-apple-ve

    • by tepples ( 727027 )

      Yes. Nintendo in fact got sued by American Video Entertainment [wikipedia.org] over Nintendo's use of lockout on the Nintendo Entertainment System.

    • Every video game console maker has a monopoly on their own game stores. How is this different? Are they being investigated, too?

      Good Point!

    • Indeed. As a minority platform, this behavior isn't any more concerning than that of virtually any other closed platform. We see this or similar behavior all the time (e.g. video game handheld and console manufacturers exact license fees from game publishers, retail stores commonly take a 30% cut on all physical goods, white label goods are sold exclusively at particular retailers for prices of their own choosing). It only becomes something worthy of regulatory consideration when consumers can't reasonably

      • if Sony charged a high licensing fee, that'd be reflected in the price of their games, which would drive people to buy Xbox Ones.

        Sony can get away with it for current PS4 owners by setting its fee just high enough that the difference in fees over the course of owning a PlayStation 4 is less than the cost of the Xbox One hardware.

        When grocery stores take higher cuts, that's reflected in the prices of the items sold in their store, which drives people to competing grocery stores.

        In John Steinbeck's The Grapes of Wrath, suggestions to shop at other than the company's convenience store are routinely shot down with "Gallon a gas."

        Likewise, if Apple is taking too large of a cut with iOS apps, there's really nothing substantiative stopping consumers from jumping ship to its thriving competitor: Android.

        There's a bit of a difference here. It's common to own and regularly use more than one competing console but not more than one competing smartphone. Switching

    • by MobyDisk ( 75490 )

      Market share and ubiquity are different, and that does matter when determining if a company is a monopoly. I really wish game consoles were being investigated: lock-in is bad for business and consumers. It has pissed me off for 30 years that it is so hard to write code for consoles. I was part of the DS hacking community and it was awesome. Back when most people had flip phones, my modded DS was $50 PDA with a web browser, dictionary, organizer, MP3 player, ... Technology was set back years by locking

    • Every video game console maker has a monopoly on their own game stores.

      Whataboutism is not a defence.

  • As part of my campaign to federally regulate the number of fart and note taking apps, I feel it's important to set a precedent that the government has utter control over the composition and the workings of the entire App market across all devices until the (also federally regulated) heat death of the universe.

    In fact in the end they will even oversee the exact number of times that Slashdot guy who goes "appity app app" can (or cannot) post.

    • You can either have the government set the rules, or corporations. There will be no rule-less world.

      So, which would you rather set the rules: a government that may or may not be compelled to do what is best for society at large,

      or,

      a corporation who is only compelled to make itself richer, consequences be damned?

      I'm not a fan of either, but I know which one I'd pick if there was a metaphorical gun to my head...

  • Not a monopoly (Score:4, Interesting)

    by sjbe ( 173966 ) on Monday November 26, 2018 @01:40PM (#57702626)

    The lawsuit said Apple violated federal antitrust laws by requiring apps to be sold through the company's App Store and then taking a 30 percent commission from the purchases.

    I don't get how this is a monopoly without contorting the definition of the word into something utterly useless. If it was such a terrible deal for software vendors then why do they persist in using Apple's platform? There are alternatives which are actually considerably more popular by unit volume and more open to third parties. I don't see the public interest here.

    And if the argument is that Apple is taking too big a cut then the argument is de-facto that the government should engage in price fixing which is almost always a terrible idea. What is the "right" amount? 5%? 20%? 50%? For any number greater than zero they are asking the government to determine a market price and the government is terrible at doing that especially when there is no compelling public interest in doing so.

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      Dude,

      MS got blasted in the 90's for trying to force people to use IE. Thanks to that suit I can actually disable IE on my domain for all my systems. Apple has no right to dictate how I use my hardware- they represent a majority share of the mobile market. And they then isolate software use on their devices to their own pet list.... that they take a cut of... how could this be any more clear.

      The ability to sideload and have additional app stores is one of the reasons why I left Apple. Amazons app store is a

      • MS got blasted in the 90's for trying to force people to use IE.

        That's because Microsoft WAS a monopoly. They had over 90% market share in desktop operating systems. There literally weren't any viable alternatives. Apple has something like 30% market share in smartphones. In what universe is that a monopoly.?

        Apple has no right to dictate how I use my hardware- they represent a majority share of the mobile market.

        Entitled much? First off Apple does NOT have a majority share [techspot.com] of the mobile market. Second, Apple isn't telling you how to use your hardware. You can do whatever you want with it and they cannot say shit about it. But the flipside is that Apple isn't under a

        • Apple has something like 30% market share in smartphones. In what universe is that a monopoly.?

          Wrong question. The correct question is, did Apple break federal antitrust laws by monopolizing the market for iPhone software applications and causing consumers to overpay.

          Well, did they?

      • by Anonymous Coward

        MS got blasted in the 90's for trying to force people to use IE. Thanks to that suit I can actually disable IE on my domain for all my systems. Apple has no right to dictate how I use my hardware- they represent a majority share of the mobile market. And they then isolate software use on their devices to their own pet list.... that they take a cut of... how could this be any more clear.

        False equivalence, MS used hooks from the OS to force users to use IE as their browser yet apple allows you to use any software from their app store. You would need to prove that it is prohibitively difficult/expensive to get legitimate software onto their store. Yes they curate their store but unless you can prove that you as a developer were unable to get legitimate software onto their store then you have no case, whining because the app prices are too high is a bullshit reason for a class action lawsuit

      • The ability to sideload and have additional app stores is one of the reasons why I left Apple. Amazons app store is a good example- there is no reason for apple to prevent users from clicking "I agree this can break my phone" and loading whatever they want on their device.

        1. You can "side load" Apps from Source since iOS 8 (over five years now).

        2. You can "side load" Apps from .ipa files using Cydia Impactor (and a NON-Jailbroken iOS device!) since iOS 8 (over five years now).

        3. If a popular sideloaded App turned out to be a Trojan, ALL the Public would understand was that "iPhone Apps No Longer Safe!", and that perception could NEVER be overcome in the public's mind.

    • The lawsuit said Apple violated federal antitrust laws by requiring apps to be sold through the company's App Store

      Even this is not correct: Distribute in-house apps from a web server [apple.com]

    • I don't get how this is a monopoly without contorting the definition of the word into something utterly useless. If it was such a terrible deal for software vendors then why do they persist in using Apple's platform? There are alternatives which are actually considerably more popular by unit volume and more open to third parties.

      Abuse of monopoly position doesn't require a specific percentage of some market (who would get to define the boundaries of a given market?), it simply requires the ability to use the position in one market to restrict competition in another market. The argument is that Apple uses its position as the hardware manufacturer to eliminate competition in the software sales/distribution (i.e. retail store) market and, to a lesser extent, the software creation market (since it's unreasonably difficult to sell any s

      • Abuse of monopoly position doesn't require a specific percentage of some market (who would get to define the boundaries of a given market?), it simply requires the ability to use the position in one market to restrict competition in another market.

        That is true but the fact remains that Apple does NOT have a monopoly under any reasonable definition of the term. Android smartphones collectively sell more units than Apple does by a pretty substantial margin. The market is for smartphones, not for products made by Apple.

        The argument is that Apple uses its position as the hardware manufacturer to eliminate competition in the software sales/distribution (i.e. retail store) market and, to a lesser extent, the software creation market (since it's unreasonably difficult to sell any software that Apple doesn't approve of).

        Several flaws in that argument. A) Apple is not just a hardware manufacturer and they don't have a monopoly on smartphone hardware. Saying they have a monopoly on Apple products is an idiotic argument. B) Nobody is compelled to sell

    • The lawsuit said Apple violated federal antitrust laws by requiring apps to be sold through the company's App Store and then taking a 30 percent commission from the purchases.

      I don't get how this is a monopoly without contorting the definition of the word into something utterly useless. If it was such a terrible deal for software vendors then why do they persist in using Apple's platform? There are alternatives which are actually considerably more popular by unit volume and more open to third parties. I don't see the public interest here.

      And if the argument is that Apple is taking too big a cut then the argument is de-facto that the government should engage in price fixing which is almost always a terrible idea. What is the "right" amount? 5%? 20%? 50%? For any number greater than zero they are asking the government to determine a market price and the government is terrible at doing that especially when there is no compelling public interest in doing so.

      This. This. A THOUSAND TIMES THIS!!!

    • by MobyDisk ( 75490 )

      You answered your own question:

      I don't get how this is a monopoly...If it was such a terrible deal for software vendors then why do they persist in using Apple's platform?

      They are a monopoly because software vendors persist in using the platform even if they don't want to. They feel they have no choice. If an entire industry (software development) surrenders to one company's absurd demands, then that company is holding a loooot of power. Enough to be considered a monopoly. That's how Microsoft was branded a monopoly in the 90's: Clearly there were dozens of other options. It's just that Microsoft had so much dominance they were effectively

  • by Anonymous Coward

    This is a suit by the customers, not the developers. The apple users claim that by not allowing them to install apps from anywhere else is a monopoly. They are too dumb to see that this is part of the superior quality and security that they are constantly praising apple for and removing that walled garden will just reduce the reputation of their beloved products. They also don't seem to realize that they could always just use android phones if they want those features, you cannot keep your cake and eat it t

  • by TheFakeTimCook ( 4641057 ) on Monday November 26, 2018 @02:21PM (#57702838)

    It is OBVIOUS from the FACTS that people do NOT buy Apps directly from Apple; but rather THROUGH Apple.

    The simplest fact which proves this is: App Developers (Publishers) are free to set the PRICE of the App (including FREE). Obviously, if the Publisher of the App is setting the Selling Price, AND the Publisher of the App is writing the "Ad Copy" for the App's Listing in the App Store, AND the Publisher of the App is deciding on the Category(ies) that the App is Listed-Under, then it is the Publisher that is simply listing his wares in Apple's Store Catalog, for which Apple charges a 30% commission for hosting, payment processing, indexing, etc.

    Since Users purchase their Apple mobile products with the understanding that the main source (but not the ONLY Source! *) of Apps is the Apple App Store, and since Apple certainly doesn't hold a "monopoly" position in ANY market, there simply is no question of anti-trust here.

    * Since iOS 8, Apple has allowed Users to install Apps from Source Code Projects using XCode, and from .ipa files using Cydia Impactor (which runs on MacOs, Windows and Linux).

  • by nehumanuscrede ( 624750 ) on Monday November 26, 2018 @02:54PM (#57703026)

    That being the " Service " department at your local car dealership.

    If I'm not mistaken, the courts basically told dealerships to f*** right off when they demanded folks bring their cars into a " certified $brand_name dealer " or use only " certified $brand_name parts " for all service and warranty related issues lest you void your warranty. All at a considerable markup on parts of course. . . . . .

    I would suspect the end ruling on this will flow along similar lines.

    • That being the " Service " department at your local car dealership.

      If I'm not mistaken, the courts basically told dealerships to f*** right off when they demanded folks bring their cars into a " certified $brand_name dealer " or use only " certified $brand_name parts " for all service and warranty related issues lest you void your warranty. All at a considerable markup on parts of course. . . . . .

      I would suspect the end ruling on this will flow along similar lines.

      Then you suspect wrongly.

    • by MobyDisk ( 75490 )

      That's because there was a law that specifically forbade the companies from doing this. There is no law requiring side-loading of applications. And of course, the car manufacturers still keep information secret to make repairs difficult.

  • There is no doubt they are overcharging by huge factor. Amazon would create a store, like they did for Android, where they charge a much smaller fee to developers but they simply can't. It's hard enough competing on Android for another "store" app besides being completely excluded on Apple or forced to take 30% from your store app's sales.
    • Apple has a monopoly

      As others have pointed out, saying that "Apple has a monopoly on selling iOS software" is like saying that "Sony has a monopoly on selling PlayStation software". It's very unclear that there's anything monopolistic (in the legal sense) going on here. I personally don't love the direction that this kind of thing is moving, but that doesn't automatically make it illegal.

      There is no doubt they are overcharging by huge factor.

      I don't really agree. Sure, 30% seems like a big number - but then you need to consider what you get for that 30%:

      * QA resources. This isn't

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