Time to share the power
Tech giant’s monopoly over its App Store threatens the future of innovation
Apple’s monopoly over its App Store puts innovation at risk,
When it first arrived in 2008, Apple’s App Store was revolutionary. It can be hard to remember just how much.
Before app stores, finding apps for your computing devices was an arcane process that involved scouring the web, downloading a file, finding where you put that file and then installing it — all the while praying you didn’t get a virus.
Along came Apple and its App Store, which vetted every app to make sure it was safe, and which installed with just a click, no muss, no fuss. It means you can now easily search for an exercise app or a food delivery app or thousands of other things. And for the privilege of that ease and safety, Apple charged app makers who offered paid apps a 30 per cent fee, something that is still true today.
At the time, it felt like free market innovation at its best: Here was a private company with a genuinely innovative offering that made life better for millions and it thus seemed like a win-win for all.
But now, the convenience and product savvy offered by Apple is being challenged because of just how much power it exerts — a turn that highlights that, for all its rosy marketing, Apple may be tech’s most egregious abuser of monopoly power.
Consider: In early August, Microsoft announced it was ending a test of its new xCloud gaming streaming service on Apple devices.
Though Microsoft didn’t explicitly state why, the reason appeared to be that Apple still takes its cut on any purchase made in an app, while also having restrictions on what apps can do. Essentially, Apple prevented a competing gaming service from operating on its platform.
But the issue was truly forced into the spotlight by Epic Games, maker of the wildly popular game “Fortnite.” In a recent update, it introduced a workaround for players to pay for things in the game outside of Apple’s ecosystem. Far from an innocent choice, it was a deliberate ploy to push the issue; Epic had a legal defence and a plan to sue Apple ready to go. Apple acted quickly and first banned “Fortnite” from the App Store and then banned any use of Epic’s Unreal software to develop other games.
Essentially, Apple and its many supporters argue that, as a private company, Apple can do as it pleases with its own ecosystem; as the owner of the App Store, it can both set its pricing and dictate how people who benefit from that delivery system can use it.
As such, Apple is free to, say, ban the email app Hey because users can pay for it outside the App Store, while the company is also free to offer exceptions for services like Netflix or Amazon’s Kindle. In offering a safe, reliable place to get apps, Apple feels it’s in the clear to both charge its 30 per cent cut and dictate terms.
That sounds reasonable enough. But it isn’t 2008 anymore. There are currently over a billion Apple devices that access the App Store around the world. Apple is a $2-trillion company.
And in becoming so mainstream and fundamental to our lives, it is no longer tenable for the company to arbitrarily decide how other people and companies run their businesses or use their smartphones.
It was put into stark relief by Francisco Tolmasky, a former Apple employee who worked on the original iPhone.
On Twitter, he stated, “Apple’s iOS rules would not have allowed for the invention of the web browser … Think of all the other amazing ideas that haven’t gotten a chance to be invented because they aren’t allowed on mobile devices.” That is ultimately what’s at stake.
The point is that at a certain scale things like the iPhone and the App Store cease to just be products and turn into what you might call general purpose computing platforms: tools or technology upon which other things are built.
In that sense, they are like utilities, and the idea that Apple can simply do as it pleases is akin to saying that electricity or telecommunications companies can block certain other products from working with, say, your home internet or electricity simply because that is their right.
But we have strict regulations on those types of companies because we recognize how absurd that would be; instead, we regulate them because we understand that their importance to society and the functioning of other businesses means they must be treated differently.
At root, what the digital revolution is highlighting is that we have allowed private companies to become the backbone of our digital lives and, in doing so, have ceded the idea of public responsibility. The App Store and other digital utilities were revolutionary for their time. It’s time for our reaction to their ever growing power to be similarly innovative and bold.