App Store May Violate Japanese Antitrust Law

[JapanApple]

"A report released by the antitrust watchdog found that the two tech giants hold a duopoly in mobile operating systems here, with the market share of Apple's iOS at 46.6% and Google's Android at 53.4%. They also dominate the app store market, where the FTC said there is "not enough competitive pressure."

Well, as the article elaborates in the story, there aren't more objections from users and the government of Japan. It seems telling us to believe. Those watch groups (well more like problem-mongers) crying about this. Not our fault there are only 2 apple/google stores offering apps to consumers.

 

[AppliedMicro]

Yes, it’s amazing that it seems to be. Few lawmakers of the same side that are bent on dismantling big tech.

Nobody is „bent on dismantling“ big tech“. Lawmakers aren’t even splitting up OS developers, App Store operators and hardware vendors. It‘s just about limiting the unilateral power to set prices, terms and conditions of a very software-based

But there is an agenda by a few people.

…in developed economies around the world.

Why do you think it is that is - when it supposedly just a „few people“? Who are these „few people“ and why do regulators and governments around the world and across different law systems seem to agree?

My thoughts exactly. App stores and smartphones have been very important in people’s lives for most of that time. Why is it suddenly a problem now?

Do you agree that smartphones and their apps are more important than five, ten or fifteen years ago for consumers to access businesses‘ services and products?

Also, what is your argument here? The fact that governments may (have been) slow to regulate new industries or technology isn’t any argument that they shouldn’t, is it?

But why aren’t governments regulating what actually needs regulating then? Leave the app stores alone, regulate to create an environment where more operating systems and ecosystems can exists.

I‘ve told you before, as regulatory authorities have too: Page 10 in the trade commission summary nicely sums it up: ver strong network effects, economies of scale and customer lock-in.

You can’t regulate competitors to develop their own competing systems - and history has shown, in the sufficiently similar desktop operating system space, that there doesn’t seem to be room or demand for more than two or three competing OS. And there may be economic benefits in having fewer operating systems.

 

[mrochester]

Nobody is „bent on dismantling“ big tech“. Lawmakers aren’t even splitting up OS developers, App Store operators and hardware vendors. It‘s just about limiting the unilateral power to set prices, terms and conditions of a very software-based

…in developed economies around the world.

Why do you think it is that is - when it supposedly just a „few people“? Who are these „few people“ and why do regulators and governments around the world and across different law systems seem to agree?

Do you agree that smartphones and their apps are more important than five, ten or fifteen years ago for consumers to access businesses‘ services and products?

Also, what is your argument here? The fact that governments may (have been) slow to regulate new industries or technology isn’t any argument that they shouldn’t, is it?

I‘ve told you before, as regulatory authorities have too: Page 10 in the trade commission summary nicely sums it up: ver strong network effects, economies of scale and customer lock-in.

You can’t regulate competitors to develop their own competing systems - and history has shown, in the sufficiently similar desktop operating system space, that there doesn’t seem to be room or demand for more than two or three competing OS. And there may be economic benefits in having fewer operating systems.

That is such a weak argument; 'it's not ok for this market to have 2 competitors as that is anti-competitive' and then with the same breath say 'it's ok for this market to have 2 competititors'.

As it happens, it's usually the case that you need 3 or more competitors in a market for it to remain competitive. And what do you know? If you had a 3rd operating system, you'd also have a 3rd app store market too. Problem solved.

Have you also considered that the reason there are only 2 app stores is because history has showed that there is neither room, nor demand, for more? If there was demand for more, why is the play store so dominant?

 

[AppliedMicro]

Have you also considered that the reason there are only 2 app stores is because history has showed that there is neither room, nor demand, for more?

That is exactly my point

That is such a weak argument; 'it's not ok for this market to have 2 competitors as that is anti-competitive'

That‘s not the argument. The argument is that because there are only two dominant competitors, that is detrimental to other businesses (developers) and consumers. And that’s why and where new laws come in:

Unilateral power to review and allow or deny apps for a mobile OS? 👉 Make it mandatory to allow sideloading.

Unilateral pricing power (commissions) and forcing transactions through their own in-app purchase systems? 👉 Mandate that businesses can refer customers to their checkout systems and conduct transactions over them.

 

[mrochester]

That is exactly my point

That‘s not the argument. The argument is that because there are only two dominant competitors, their business will be regulated where it hurts other businesses (developers) and consumers.

But none of this action creates the additional competition that is needed. All the regulations are going to do is rearrange the deckchairs on the Titanic.

 

[AppliedMicro]

As it happens, it's usually the case that you need 3 or more competitors in a market for it to remain competitive

Yes, it’s probably no coincidence that many (most?) countries are structuring their mobile carrier markets to have at least 3 nationwide operators (though rarely more than 4 networks, when excluding MVNO).

All the regulations are going to do is rearrange the deckchairs on the Titanic.

They are merely mitigating or limiting the negative consequences for consumers and other businesses.

You can‘t just regulate a strong third competing operating system platform into existence, when even Microsoft has thrown the towel on that (after having a very decent operating system in Windows Mobile 7/8 and hardware options after the acquisition of Nokia‘s handset business - just to late to the market and therefore lacking in developer support).

Besides, even if they attempted to do it, opponents of regulatory action and new laws would scream even louder and more ardently how that is evil government overreach.

 

[mrochester]

You absolutely could understand what barriers there are to new competitors entering the operating system market and dismantling them. That’s the correct action to take.

 

[Jensend]

Consumers don't buy products based on whether they are 'open' or not so Apple won't gain any new customers from that.

There are people who like Apple hardware but don't like the walled garden.

Plus you have to consider any customers who stop buying Apple products because of the negative consequences of Apple being forced to take this action.

What are they going to buy instead? Are there people who would prefer Android devices but buy Apple devices because side loading isn't possible? I suspect the reverse is more common.

If apps don't have to use Apple IAP then Apple doesn't automatically collect their commission. So they have to design another process to get that commission, which itself will come with downsides (and potentially additional cost, ironically).

I'd actually be fine with letting the Apple App store setting their own terms for their own store if sideloading were available.

I love you think they are going to be happy making less profit though. That's a tad naieve

I never said they'd be happy about it.

You absolutely could understand what barriers there are to new competitors entering the operating system market and dismantling them. That’s the correct action to take.

Even Microsoft couldn't get a foothold in the mobile OS market, and they make the most popular desktop OS. What artificial barriers are so high that even Microsoft can't compete?

 

[mrochester]

There are people who like Apple hardware but don't like the walled garden.

What are they going to buy instead? Are there people who would prefer Android devices but buy Apple devices because side loading isn't possible? I suspect the reverse is more common.

I'd actually be fine with letting the Apple App store setting their own terms for their own store if sideloading were available.

I never said they'd be happy about it.

Even Microsoft couldn't get a foothold in the mobile OS market, and they make the most popular desktop OS. What artificial barriers are so high that even Microsoft can't compete?

So because a few people want Apple hardware without the so-called ‘walled garden’, we should change it for everyone? Selfish much?

The artificial barriers to Microsoft’s success was primarily app developers refusing to make apps for the platform, specifically google and its services. If there were regulation that made them have to make apps, or stop them from deliberately hampering other developers from hooking into the services, that would have gone a long way to helping facilitate a viable 3rd platform.

There should be two options in software development. Either you get the benefit of reach, but no exclusivity (google approach) or you get the benefit of exclusivity, but minimal reach (apple approach).

The problem comes when you get a business that wants the benefit of reach but also wants exclusivity.

 

[deevey]

If 99% of people will still be using the official app store, than what is this gap Apple needs to plug? And if they lose more than 1%, maybe they'll just have to live with a bit less overall profit. But maybe they'll sell more hardware to people who would be more willing to use Apple products if they were more open.

Just ONE single popular game redirecting users away from IAP's lost Apple $12M within less than a 3 month period.

Remember thats only the profit from redirected users - and Apple IAP's were still accessible so probably double that figure for a total of those three months alone.

Game IAP's make up almost 70% of the App store's revenue of almost 100B (Yes thats a "B") While profit from iphones waw less than that in 2021.

Based on (admittadly old revenue reports) 1% of Apps make up 94% of the App stores profit - the majority being games. 1% is not an insignifigant number. The developers likely to leave Apple IAP's behind first are the ones with the most financially to gain.

Try making up that kind of shortfall with additional device sales in an already saturated market to a couple of people who want more open Apple hardware ... simply put: It ain't gonna happen.

 

[Jensend]

Just ONE single popular game redirecting users away from IAP's lost Apple $12M within less than a 3 month period.

Remember thats only the profit from redirected users - and Apple IAP's were still accessible so probably double that figure for a total of those three months alone.

Game IAP's make up almost 70% of the App store's revenue of almost 100B (Yes thats a "B") While profit from iphones waw less than that in 2021.

Based on (admittadly old revenue reports) 1% of Apps make up 94% of the App stores profit - the majority being games. 1% is not an insignifigant number. The developers likely to leave Apple IAP's behind first are the ones with the most financially to gain.

I was replying to a poster who claimed that 99% of users would continue to use the App Store. That's different than 99% of apps being available on the App Store. The question isn't about how many apps would leave, it's how many people would use those apps that are no longer available on the App Store.

Try making up that kind of shortfall with additional device sales in an already saturated market to a couple of people who want more open Apple hardware ... simply put: It ain't gonna happen.

I'm not making the argument that this is a strategy that Apple should take.

 

[Jensend]

So because a few people want Apple hardware without the so-called ‘walled garden’, we should change it for everyone? Selfish much?

I don't understand what's selfish about that? Is it selfish that I also want to be continue to run apps on MacOS and Windows that I didn't acquire through their respective app stores?

 

[mrochester]

It comes across as wanting things done your way and go hell with anyone else or what others want.

 

[unrigestered]

It comes across as wanting things done your way and go hell with anyone else or what others want.

but doesn't this go both ways?

 

[mrochester]

but doesn't this go both ways?

I’m not demanding anything be forcibly changed against consumer interests.

 

[unrigestered]

I’m not demanding anything be forcibly changed against consumer interests.

So because a few people want Apple hardware without the so-called ‘walled garden’, we should change it for everyone? Selfish much?

 

[mrochester]

Exactly, just leave things as they are.

 

[tehabe]

So because a few people want Apple hardware without the so-called ‘walled garden’, we should change it for everyone? Selfish much?

This is a very weird idea, because if you like the walled garden you can stay there, it won't be gone. Consumers will just get more choices and Developers will get a fairer market place.

For me the most important thing is, that Google and Apple must follow their own rules on their app stores. For example, if others are forbidden to track users without permission so are Google and Apple, if others are prohibited from using notification for ads, so are Google and Apple.

It is really odd that so many on here are fine with limiting their choice. And than they are coming with weird arguments straight out of the libertarian dystopia. And believe me, most of you won't be able to afford to live in a libertarian world. You would be living in a cardboard box and have to be grateful when Elon Musk throws you a piece of mouldy bread.

 

[Jensend]

This is a very weird idea, because if you like the walled garden you can stay there, it won't be gone. Consumers will just get more choices and Developers will get a fairer market place.

For me the most important thing is, that Google and Apple must follow their own rules on their app stores. For example, if others are forbidden to track users without permission so are Google and Apple, if others are prohibited from using notification for ads, so are Google and Apple.

It is really odd that so many on here are fine with limiting their choice. And than they are coming with weird arguments straight out of the libertarian dystopia. And believe me, most of you won't be able to afford to live in a libertarian world. You would be living in a cardboard box and have to be grateful when Elon Musk throws you a piece of mouldy bread.

The argument some were making is that some developers would leave the App Store if they could sell apps independently, so consumers who refused to buy elsewhere would have fewer choices within the official App Store.

But that seems like a sense of entitlement to limit developer freedom because you don’t want to buy elsewhere.
Am I acting entitled when I want Apple to be forced to run their business a certain way? Perhaps, but the argument there is that Apple is abusing their near-monopoly status.

 

[deevey]

I'm not making the argument that this is a strategy that Apple should take.

It's not a very viable solution though is it?

But that seems like a sense of entitlement to limit developer freedom because you don’t want to buy elsewhere.
Am I acting entitled when I want Apple to be forced to run their business a certain way? Perhaps, but the argument there is that Apple is abusing their near-monopoly status.

Apple could always just charge a hefty % of sales for access to API's and $99+ 15/30% per sales if you are willing to sell via the Apple store.

Would that work?

I don't understand what's selfish about that? Is it selfish that I also want to be continue to run apps on MacOS and Windows that I didn't acquire through their respective app stores?

When you bought the device in full knowledge of the limitations of the platform (and the reason many buy into it), yes.

Would you buy a refrigerator and expect it boil water even if it makes it a worse refrigerator? And then expect the manufacturer to implement that change because a vocal minority also want it to boil water.

 

[mrochester]

This is a very weird idea, because if you like the walled garden you can stay there, it won't be gone. Consumers will just get more choices and Developers will get a fairer market place.

For me the most important thing is, that Google and Apple must follow their own rules on their app stores. For example, if others are forbidden to track users without permission so are Google and Apple, if others are prohibited from using notification for ads, so are Google and Apple.

It is really odd that so many on here are fine with limiting their choice. And than they are coming with weird arguments straight out of the libertarian dystopia. And believe me, most of you won't be able to afford to live in a libertarian world. You would be living in a cardboard box and have to be grateful when Elon Musk throws you a piece of mouldy bread.

The walled garden will be gone.

 

[mrochester]

The argument some were making is that some developers would leave the App Store if they could sell apps independently, so consumers who refused to buy elsewhere would have fewer choices within the official App Store.

But that seems like a sense of entitlement to limit developer freedom because you don’t want to buy elsewhere.
Am I acting entitled when I want Apple to be forced to run their business a certain way? Perhaps, but the argument there is that Apple is abusing their near-monopoly status.

It seems bizarre to me that you’d argue in favour of developer interests vs consumer interests.

 

[webkit]

I think the point is that the regulation is bogus because competition already exists. None of this regulation will create the competition that is *actually* needed (i.e., more operating systems and ecosystems).

Assuming Japan is like many other countries, the existence of competition does not make a company immune to antitrust regulations. There were competitors to Windows in the 1990s yet the DOJ went after Microsoft.

In this situation, we are talking about a duopoly with Apple/iOS (around 67% share of mobile OS) and Google/Android (around 33% share). Antitrust laws and regulations would hardly be bogus here.

The outcome of the regulation is that consumers *don’t* get the additional competition they deserve, and iOS gets spoilt. That’s not an outcome that any consumer should support (unless of course you're a supporter of trump style politics where you cut off your own nose to spite your face).

The outcomes would give consumers more choice regarding app access, payment options, etc., and developers would have more choice in marketing their products and the services/options they can provide their customers. With all of Apple's talent and resources, I am confident they would be able to keep iOS as safe and secure as it is today (which isn't perfect) for those liking the way it is now, while satisfying regulations and business/customer demand for sideloading, alternative app stores, alternative payment systems, etc. Additionally, new competition could push Apple to make the App Store better. All of this would be a GOOD thing.

 

[webkit]

Yes, they are creating new laws to curb the apparent power of app stores because under the old laws at least in the US the justice department may not win a case like this (or maybe they can but at the expense of other more important cases)

Assuming Japan is like many other countries, the laws regarding dominance in a market (which we have here with the iOS/Android duopoly) combined with anticompetitive behavior (which we have here with the restricting of sideloading, alternative app stores, alternative payment systems, etc.) have existed for a long time. Smartphones, app stores, Apple and Google weren't around 50 years ago but the regulations we’re talking about here fall under classic antitrust legislation. This is about applying age old laws to current markets, technologies, etc.

 

[cocky jeremy]

The Cydia Store & the jailbreak community would like a word with you

They wouldn't be making a dime without Apple making the iPhone.