ÖOn June 16, the European Commission launched two antitrust investigations into Apple’s App Store and Apple Pay practices. The first investigation examines whether Apple has violated EU competition rules with its App Store guidelines. The second study looks at whether Apple’s restrictions on near-field communication (NFC) capability for the iPhone and Apple Watch are preventing banks and other financial institutions from offering NFC payment systems with the Apple kit.
The store opened on July 10, 2008 with an initial inventory of 500 apps. As of January this year it was over 2m. As a digital distribution platform, it was a howling success, and I think it worked well for consumers as nothing got into the store without Apple’s thorough review. As a result, the iOS software ecosystem is more secure than its Android counterpart, where there are numerous other app stores besides the dominant Google Play Store, making the Android ecosystem consistently less secure than the iOS ecosystem. This seems to be confirmation of Apple’s iron control over the App Store.
The flip side of this is that the iOS store is a monopoly and a mixed blessing for developers. On the one hand, you can reach a market of consumers who seem less price sensitive than Android users. I remember in the early days the first check that a developer I knew for a best-selling app was £ 250,000. On the other hand, if you want your app to run on iOS, you’ll need to send it to Apple for review and accept the company’s terms and conditions, including the 30% cut. This approach has impressed developers almost from the start, but more recently, complaints have become louder and louder.
Given that Microsoft was the original digital monopolist, it’s the heap of slag that calls the kettle black
The two who triggered the EC investigation came from Spotify, the streaming music service, and Rakuten on behalf of his Kobo daughter, who sells e-books through the App Store. Just to rub salt in Apple’s regulatory wounds Microsoft was there last week when its president Brad Smith said that “it is time for US and European antitrust authorities to discuss tactics that app stores can use to those who want to sell their software.” Given that Microsoft was the original digital monopolist, it’s the heap of slag that calls the kettle black.
Antitrust suits are generally evil and complex, and it will be no different. However, the NFC investigation is somewhat more interesting. When I was physically shopping in supermarkets and other stores before the pandemic, NFC was the technology I could use to pay by simply holding my Apple Watch to the card reader. Not only was this practical, it also generally prevented the £ 30 limit on contactless cards. In the early days, the cashier was overly blinded, so I declined by saying that I had to pay a fortune for the watch to make it happen, so it might not be so wise. Assuming you had the necessary – and expensive – Apple kit, it was still very convenient.
The concern that the investigation appears to have initiated is that Apple has limited access to the NFC features of its iPhone and Apple Watch. This means that banks and other financial service providers cannot offer NFC payments through their own apps. The increase in mobile payments in Europe as a result of the coronavirus pandemic has given Margrethe Vestager, head of the EU cartel department, a reason for her Apple Pay investigation. “It appears that Apple sets the terms for using Apple Pay in retailer apps and websites,” she says. “It also reserves the tap and go functionality of iPhones for Apple Pay. It is important that Apple’s policies do not deny consumers the benefits of new payment technologies, including better choice, quality, innovation and competitive prices.”
She is right. Stay tuned.
What i read
The post-zoom world
A typically insightful and far-sighted essay by Benedict Evans on his blog about what happens when we get used to video conferencing.
A risky undertaking
A nice blog post by Steven Sinofsky on the historical background of people’s reluctance to take reasonable precautions like wearing face masks.
Life after the ban
An immensely thoughtful and far-reaching essay by Anthony Barnett on the openDemocracy website on Covid-19 and the humanization of globalization.