My Amicus Brief

The Supreme Court is going to start hearing arguments today in a case where consumers are challenging Apple’s distribution monopoly on iPhone apps. These consumers are represented by the attorney generals of 30 states including California, Texas, Florida and New York.

I just heard about this case today and it is too late to file an amicus brief, so I am simply going to share my thoughts on this case here.

1/ Apple argues that consumers cannot bring suit against them as it is the app developers who are the harmed party if there is one at all. I don’t agree with that for two reasons. First, developers pass the increased costs on to the consumer. Second, the developers are not going to attack Apple because they are their only way to get to market.

2/ Apple argues that a decision against them will harm the broader e-commerce market. I don’t agree with that either. If anything, opening up the distribution system for mobile applications would massively increase the e-commerce market which is artificially constrained by Apple and Google’s mobile app store monopolies. I wrote a bit about that earlier this year.

3/ The US Chamber of Commerce did write a brief in support of Apple in which they argued that “The increased risk and cost of litigation will chill innovation, discourage commerce, and hurt developers, retailers and consumers alike.” I cannot disagree with that statement more. Innovation flourishes when there is an open market where no one party can control what can be sold. Apple routinely prevents innovative new apps from being sold in their app stores. A good example of that right now are crypto-based games and other applications that threaten Apple’s 30% take rate on digital goods business model.

Apple and Google have constrained the distribution system for mobile apps in many parts of the world and the result is higher costs for consumers, less choice, and ultimately less innovation. None of this is good for the economy. It is high time for the courts to weigh in here and open up the opportunity for third party app stores to exist on Apple and Google phones. I encourage the Supreme Court to rule in favor of the consumers in this case in hopes that it will lead to that.


Comments (Archived):

  1. William Mougayar

    The day Google Play and Apple’s App Store’s monopolies end will be a good day for mobile users and developers.

    1. obarthelemy

      Google’s PlayStore is not a monopoly, all Android phones can sideload apps and 3rd-party stores. Google’s PlayStore is only about 50% of Android apps’ total revenues.

      1. William Mougayar

        yes, but 50% of Apps are getting taxed at the 30% rate which is arbitrarily high, given the large market share Google Play enjoys. It could be considerably lower.

        1. obarthelemy

          Indeed. But contrary to the iOS app market which is 100% locked down by Apple, the Android app market is free. If devs and users find that 30% too high, on the iOS side they have no choice, on the Android side they have the choice to, respectively, release their apps to other markets or directly; and get their apps from other markets or directly. Fortnite and Android did just that, it hasn’t been released on the PlayStore but as a direct download from EA.More broadly, if Apple wants to ban an iOS app, it can utterly ban it from being installed on any iDevice, cf China where Apple is acting as a proxy for the government. Google can’t ban an Android app, they can only remove it from the PlayStore, not prevent people from installing it from other sources. https://uploads.disquscdn.c

    2. jason wright

      Google’s effective monopoly is in search, not app stores.

      1. William Mougayar

        You could argue it is in both.

        1. jason wright

          I could, but do i want to? 🙂

        2. obarthelemy

          Google has a monopoly in appstores in the West the same way MySpace had a monopoly on Social: because people aren’t clicking on the several other options they have.There are no switching costs. There’s no incompatibility, no exclusivity, no lock-in, no friction to add another, no monetary nor skill nor time nor proprietary-data-format barriers. Appstores aren’t even incompatible with one another, I’ve got 3 on my phone running together smoothly.

    3. JLM

      .Monopolies are only forbidden when it can be proven that they “restrain” trade.Restraint of trade damages can be priced as money damages or be broken by behaviorial directives (“stop” doing that).As a consumer, I freely admit that I like having everything for my phone in one single place so I access it easily. Even if the entire Apple/Google fee is “monopolistic” it feels like a bargain to me.A lot of this is class action lawyers looking for a pay day.Point of order — I don’t think the Google Play Store is even remotely monopolistic because it simply doesn’t operate like the Apple store.JLMwww.themusingsofthebigredca…

      1. William Mougayar

        But the point is their take rate (30%) is high. It’s not in line with what it could be if they didn’t have such a concentration of power around it.

        1. JLM

          .High compared to what? High as defined by whom?Apple has sold 1,000,000,000 smartphones. [Apps can be installed on smartphones, tablets, laptops, desktops.]The Apple Store had 500,000,000 visitors last year.So, what is that worth to an app developer?Hard to see how 30% is “high.”If 30% is too high, what is fair?JLMwww.themusingsofthebigredca…

          1. Lawrence Brass

            Apple created and provided access to markets that didn’t exist, 10 years ago. Google followed.Mobile apps before the App Store were like TV remotes.Being zealous curators of their platform is a crime, amicus Jeff ?

          2. obarthelemy

            You never had a palm pilot ?

  2. John Gardner

    The app stores are Apple’s/Google’s property. If people don’t like it then create an alternative.

    1. jason wright

      Yes, that’s the real spirit of innovation.

    2. obarthelemy

      Well, that’s possible (and has been done, and is still operating) on Android, but on iOS devices you can *only* install apps from Apple’s appstore. iOS does not support any alternative to the appstore nor non-appstore app distribution. Android does.

      1. John Gardner

        iOS does not support any alternative to the appstore nor non-appstore app distribution.It’s Apple’s property… I’m not sure they’re obligated to. And if it’s Apple’s property I don’t see how it’s any of the government’s business to get involved.Those who are that upset by that should be trying to beat Apple in the marketplace, not in the courtroom.

      2. jason wright

        There’s no obligation to buy an iphone – ‘You pays your money and you takes your choice’, and there is a choice, as you have described.

        1. Kent Karlsen

          You don’t need to buy an iPhone. But what if you want to buy a subsidized Huawei phone via your phone provider? Why does Apple and Google spend so much money on lobbyism? Maybe to keep the business as usual, and it’s maybe not of benefit to the american consumer.

          1. jason wright

            Are you saying that the ban on Huawei phones in the US is not legitimate, that it is a commercial issue masquerading as a national security issue, that Apple and Google have lobbied to protect their economic interests with a false claim?

          2. obarthelemy

            Has there even been a claim ? I’m not aware of a single proven case of Huawei client devices sending more data home than any other phone, nor of accusation they did.- There have been issues with infrastructure stuff (something similar to when the CIA was diverting Cisco routers to preinstall malware and backdoors on them before delivery to foreign/sensitive clients),- There have been issues with other Chinese devices sending too much data home, probably for marketing purposes, but not Huaweis ?To my knowledge nothing with Huawei client devices, and the accusation are innuendo, not fact-based. I’m interested in any information on the subject. And on why the situation is different for phones made in China and branded Huawei than for phones made in China and branded everything else (Chinese, Korean, American, European…).

          3. jason wright

            I agree.

          4. Lawrence Brass

            The best place to place a tap is a big and fat Cisco or Huawei “carrier grade” router inside ISPs and telcos. Agencies, east and west, do this routinely. It is a brave world out there.

          5. Kent Karlsen

            I didn’t mean to be political. To follow this blog post topic, that is about the Supreme Court hearing of “distribution monopoly” of Apple, one can reflect on several levels, individual, business and nation. I am not an american citizen, so I will not mean what is right or wrong for US citizens. Myself I use Huawei Mate Pro and love that phone. My point is, that sometimes you don’t really have a choice when businesses do everything to block competition, instead of competing. Microsoft learned a lession in the 90s.

          6. jason wright

            I wonder if this is a general perception problem, of what ‘competition’ actually means. Peter Thiel in Zero to One argues that competing is a generally bad thing to be doing. He cites the restaurant industry and its near perfect competition landscape as the veryworst environment in which to be trying to start and grow a successful business. He advocates identifying a whole new market, starting small, and then scaling to dominate it as a monopoly. His caveat is that the monopoly must be innovative. If it is it is a good thing. If it isn’t it is a bad thing. Competing to compete endlessly, or competing to kill off the competition? There has to be an end game to the process of competing. To compete endlessly is highly inefficient. How are you liking EMUI? I like the look of the Mate 20 Pro, but the software puts me off. I’m in the UK. Even Xiaomi handsets are now being sold officially by networks here, and Oneplus is now available from every network. Watch out Samsung.

      3. LE

        but on iOS devices you can *only* install apps from Apple’s appstoreIt has always been that way from the start. This is not a new policy. Nobody is forced to buy an Apple product. If they buy an Apple product then they accept the restrictions that Apple puts with the product. Or don’t buy it. What am I missing here? Apple is not a public utility. There are alternatives.Honestly we should all be spending more time and energy getting rid of real annoying things that matter, suck productivity and cause aggravation like robo calls

        1. obarthelemy

          This is true. But this is also a new development for IT, Apple is the only company that won’t let computers (and smartphones and tablets are computers, for many they are the only computer they own) run any app the user wants. Well, maybe you can find another obscure instance, but that certainly isn’t the case w/ MacOS, Windows, Windows/Metro, Android, Linux nor ChromeOS, and before iOS Nokias and Palms would install apps from anywhere.I think this development bears looking into, because it is not without consequences. positive ones (curated apps, virus-scanned, high dev/UI/UX standards, IP protection…) but also negative ones both for users and devs: Apple can delete apps with no warning, push iffy updates (maybe at the behest of some gov’s political police), lock out competitors, disable or selectively enable functionality… and all of that capriciously, with no rules and reasons but its own whims.Nightmare scenarios are easy to think up:- you put all your data in some app, Apple removes that app. You’re screwed !- secret police forces Apple to update an app with a backdoored version.- malware bypasses Apple’s checks and gets pushed to millions of users (this actually happened)- Apple moves in on a new business, and removes competitors’ app (that’s actually in the appstore rules: “don’t duplicate…”)This is bearable only because there is an alternative. My litmus test to judge if a behaviour is sustainable is “what if everyone was doing the same ?”. In this case, it would be a competitive, privacy, security, political… nightmare.Edit: also, people can multitask. Keeping an eye on the walled garden issues does not mean forgetting about robocalls.

    3. PhilipSugar

      Agree. BUT. Print it on the box. No issue own it, print property of Apple/Google on the box and the phone.

      1. LE

        Little known fact to most this is actually what happens when you rent a Pitney Bowes postage meter. You don’t own it (at least the part that is the metering device which is often integrated into the other parts which they don’t care about).

        1. obarthelemy

          Yes but:1- postage meters are for a professional audience that we assume does more than click through the EULA w/o reading it. At least the 2nd time ^^2- postage meters are single-function devices, not general-purpose computers3- rented in-house postage meters are not an evolution of previous postage meters that were fully-owned and let you print whatever stamps you wished (analogy to apps, here).So, your analogy doesn’t work on several levels.

          1. LE

            I didn’t say it was an analogy. I was just forking a point for those who are not familiar.That said:2- postage meters are single-function devices, not general-purpose computersSingle function? Why does this matter at all? It doesn’t. Also the iphone is not a general purpose computer. Neither is an Ipad. A general purpose computer is a laptop or desktop. An iphone or an ipad is restricted in what it can do vs. (importantly) the alternatives. Also no software that you buy in the App store is required to use the device. It’s all optional for a specific purpose. There is no situation where a company (or a government) requires you to have an iphone and then charges you for an app on that Iphone either. They give it to you for free (example Whole Foods or Starbucks app). No charge. You only pay for things you decide to pay for.3- rented in-house postage meters are not an evolution of previous postage meters that were fully-owned and let you print whatever stamps you wished (analogy to apps, here). Have you ever owned or used them yourself? I do and have. Dating back since I was a kid. I used to take the meter to the post office to get it refilled. (Now you can do that by internet…)Once again it wasn’t an analogy it was simply a fact that I offered for background. But that said I don’t know how you can make this point. Prior to Apple coming along (2007) the devices were extremely limited in a practical sense from what they could do given the hardware that was out there. Anyone who owned a cell phone (even one that could access (laughing) the internet before that will say that). They sucked. Apple comes up with a new device that makes it easier. This is similar to a postage meter in that respect perhaps. You didn’t need postage meters to do volume mail as a business you could use stamps. You don’t and still don’t need an iphone or a smartphone ether. The postage meter made it easier but isn’t essential other than if your competitors are using it and you are not. That’s business.

          2. obarthelemy

            Steve Jobs begs to differ on the “not general purpose” bit. From USA Today’s coverage of the launch:When IBM introduced the PC, it was good, but it didn’t take off until people started discovering the software,” he says. The breadth of the applications “dramatically differentiates the iPhone” from competing smartphones such as the Treo and BlackBerry, he adds.

        2. PhilipSugar

          They are pretty clear about that. Apple is not.

          1. LE

            I will tell you how much PB sucks compared to Apple.Back last year I paid them in advance for a year of the meter (tax purposes). Not only did they post the payment to someone else (ok a mistake) but they had no way of even crediting the payment to my account. The only thing they would do is refund the money. And that was after literally 10 emails to a woman who works in the CEO’s office. And phone calls. Literally they had no way of taking the payment in advance in any way in their system.Meanwhile what’s funny is that people write off postal mail as effective. That has not been my experience. And Comcast literally is always sending out bad mailers (no creatively) on a repeat basis for signing up for their service. (Remember AOL and discs?). So unless they are totally brain dead it must be doing something for them financially. See photo. At post office all the email was mailers (of different sizes) for Comcast. I think that might have been 2 weeks or so of mailers. That is what I get. All of that is Comcast postal mail solicitations…. https://uploads.disquscdn.c

  3. jason wright

    “None of this is good for the economy.” The economy is an aggregation of all activity. That activity is a multitude of separate vested interests. The economy is not a ‘commons’. Only taxation makes it appear so, and that ‘glue’ is routinely avoided by corporations, especially web tech corporations. Innovation is served in the space when entrepreneurs and developers work together to create alternative platforms for distribution, like ubports, F-Droid, et.c. Get a Fairphone 2 and report back. The gauntlet is thrown 🙂

    1. Lawrence Brass


        1. jason wright


      1. jason wright


  4. obarthelemy

    Google isn’t constraining anything, all Android devices cana) sideload appsb) sideload whole appstores and from there sideload apps routinely.And many Android phones come with an OEM or operator appstore pre-installed. That’s more of a problem than a nice feature ;-pThe sideload function is a bit hidden and behind several warnings that this is unsafe – to get Android’s wonderful 0.08% incidence of malware, you must use a non-rooted phone with zero sideloaded apps – You definitely want to steer users away from using it, but it is always there.This issue is purely Apple’s.

  5. Pointsandfigures

    Do you have links to the other side of the argument? Might be interesting to see how they are framing is pretty neutral and has a link to a preview of the case here… and here… and a graphic explainer here…Personally I don’t know the facts of the case, nor the precedent. I am a strong believer in property rights and Coase.I agree with Fred’s points, but if I was going to make the case against them I might wonder why there wasn’t a neutral app store that could be set up that distributed any app for either ecosystem. Is there anything stopping that? Can I download an app from a neutral party? If so, you could make the case consumers were not being harmed but that they just didn’t know and that becomes a marketing problem for the neutral store and not a legal or regulatory restriction on competition.There is another case pending on government seizure of assets that I hope the court takes. Governments have gone way too far in seizing private assets and have an economic incentive to do so.

    1. obarthelemy

      I think the opposition’s arguments is that Regular Joes want curated apps that area) safeb) reasonably well-designed c) compatible with their hardware and OSd) not scamse) provide actual functionalityf) do not infringe someone’s / another dev’s / … IPedit: oh , and g) people know what they sign up for when they buy an Apple device, if they want freedom they should get an AndroidThe only way to achieve that is via a curated appstore, and Apple can’t with 100% confidence delegate those tasks to 3rd-parties.I do think Android ‘s way of pushing the official appstore, but hiding a way to sideload individual apps or whole stores in the recesses of the developers’ settings, behind several warnings, is more sustainable for everyone. Starting with users in authoritarian countries. You get the best of both worlds: a safe walled garden, *and* the wild west upon request.

      1. Pointsandfigures

        On the SCOTUSblog links, it looks like the essential piece is how the court looks at an old precedent. The plaintiffs (consumers) don’t like the way the 9th District interpreted the precedent and appealed.”The Illinois Brick doctrineUnder Section 4 of the Clayton Act, 15 U.S.C. § 15(a), antitrust damages are typically only available in cases of alleged overcharging to the first party who suffers the overcharge and not extended to pass through parties from the first purchaser. The United States Supreme Court in Illinois Brick Co. v. Illinois, established its doctrine that indirect purchasers of goods and services cannot recover antitrust damages from violators. More simply, the Court held that indirect purchasers do not have standing to sue the alleged infringer if they were not direct purchasers of the product.Exception to Illinois BrickThe Supreme Court has recognized an exception where the middle-man (the direct purchaser) directly passes on the overcharge of the supplier to the consumer (the indirect purchaser). The Court calls it a “cost-plus” contract. In this circumstance, the indirect purchaser agrees in advance to accept the exact costs of the middle-man. It removes the middle-man’s role in price-setting (Kansas v. Utilicorp United, Inc. (1990)). The rationale for the exception was stated by the Court:“[T]he effect of the overcharge is essentially determined in advance, without reference to the interaction of supply and demand that contemplates the determination in the general case.”Id. at 217.Applying the doctrine to this caseIn this case, the Court will have to decide whether the Illinois Brick doctrine applies. If it does, the consumers’ case against Apple must be dismissed. On the other hand, if Pepper, et al. can get the Court to agree that Apple is a direct distributor to the consumers, or if they can meet an exception to Illinois Brick—like the “cost-plus” contract exception of Kansas v. Utilicorp United—the consumers will be able to continue with the case.

    2. LE

      You an load anything on an iphone if you jailbreak it or as a developer. I think the question is to what extent the Apple software will break in other ways if you do that.Apple wants to control things for more than profit. Of course that is a driver. But the truth is they also provide a service whereby I am somewhat guaranteed of good behavior as a result of what appears to be their screening and rating process. And the quality of people that Apple hires. I trust the Apple store more than I trust other places. I am willing to pay for that. Apple is not your shitty startup either. It’s quality. Everyone knows that. Sure they make mistakes but generally the products and the support are top notch.

  6. Mark Gavagan

    Hmm. I’m torn on this one. While Apple’s walled garden limits opportunity for 3rd party innovators (and perhaps Apple’s own long-term prospects), (1) private property rights shouldn’t be ignored – their policies are well-documented and there is a viable alternative (Android); and (2) Apple’s vetting does have some (perceived?) benefits (quality standards, security & fraud protections, etc.).

    1. Guy Gamzu

      Indeed. Yet in contrast to traditional monopolies that tended to be somewhat local, Apple and Google are effectively one of the largest Global duopoly in human history.That can’t be good for consumers.While vetting is key, it can be regulated without compromising competitiveness.

    2. Sebastian Wain

      > (2) Apple’s vetting does have some (perceived?) benefits (quality standards, security & fraud protections, etc.).No. Apple doesn’t enable other browsers (yes, like Firefox or Google Chrome) to be included in the app store. Controlling browsers is controlling a big part of Internet innovation.

      1. Lawrence Brass

        I use Firefox in iOS and macOS (also in Linux, Android and Windows)For Apple hardware with iOS, Firefox can be downloaded and installed from the store, as any app. For macOS you can download it from Mozilla.Both Safari and Firefox on Apple hardware con be configured to use the search engine of your choice among Google, Yahoo, Bing and duckduckgo. I use both Google and duckduckgo.

        1. obarthelemy

          It’s a Firefox-branded browser, but it is not the true Firefox, just a reskinned verison of Apple’s WebView, with Firefox’s UI and sync. The html and javascript engines are Apple’s, not Firefox’s, and you don’t get addons like I do with Firefox on Android – all Firefox addons, not a few specific ones.If Apple’s web tools don’t support a Web standard, technology, innovation,… it is utterly unavailable to all iOS users.

          1. Lawrence Brass

            You are right. Firefox is based on Gecko. Safari, Apple’s Web View and Chrome (was) are Webkit based. Both projects with old roots and DNA. But, as you mention, iOS Firefox uses Apple’s Webview. What I am not sure of is if this is an imposition by Apple or a convenient choice made by Mozilla. Would be interesting to know.Faced with mobile development, my choice is to go native instead of using a common framework. This mainly to achieve better integration with the platform and to have access to the latest bells and whistles. It would be far more convenient and effective to have common and open APIs, instead of open stores. How can you explain this to a Supreme? I don’t know.Web standards are something tricky. Who define web standards? The W3C used to until the dominant browser implementers, all American companies, formed WHATWG. Did they did this for the greater good of consumers or for their own convenience? Look very closely at SPDY and HTTP/2.. consumer interest or theirs? Again, I don’t know.https://developer.mozilla.o

      2. Michael Ball

        When it comes to browsers, they fall within a set of consistent rules about code execution, or at least a JavaScript engine would — so there’s an argument Apple isn’t being non-competitie there. However, I would very much like to see iOS expanded to allow alternate browsers, and giving more flexibility for setting default apps and so on.With this case in general — I think it’s a useful debate, but the particulars seem so protracted. Without some cut, it seems hard for service providers to support themselves, not just mobile app stores, but sites like Etsy, and or Steam, and in some respects even Amazon. They are various levels of walled gardens, but they do provide a service, and whether I’m selling a product or buying I understand the value in having a convenient place to do so.

  7. Ron Pastore

    Agree that it stinks for devs and consumers but really hope the answer is a bigger move towards progressive web apps. at least there, the only obstacle w/ Apple is getting them not drag their feet with Safari and emerging standards.

    1. obarthelemy

      But that is the same issue really. Android supports any browser each with its own html and javascript engine. Apple only allows re-skins of iOS’s WebView, and on top of that makes sure the WebView lags behind real Safari. The only difference between browsers on iOS is the UI and synching, all the rendering & processing is the same, and it’s all Apple-controlled.2 sides of the same coin.Side note: I’m underwhelmed by PWAs for the moment. They’re laggy !

      1. Ron Pastore

        i don’t know if it’s the same. yeah, they can still put all their sneaky efforts into WebView but at least there is a path forward, some pressure can build and they wouldn’t be the install-gatekeepers. even if people have to download PWAs only to get a “use a modern browser” message on safari, that’d be progress.

  8. John Danner

    Isn’t it amazing that many of us who are directly affected by the App Store monopolies are just hearing about this case. I completely agree with your thoughts above Fred and wish I could have helped build the case.

  9. DJL

    I agree. As a person who generally favors less regulation – Apple, Google and Facebook all have monopolies on different parts of the consumer-tech stack that should be examined.Like others – I believe that this is more of an issue with Apple. But they have made a history out of created closed systems that worked. Look at what open source did for software distribution and innovation.

  10. kidmercury

    i see both sides, but given a preference to avoid legislative action because of the precedent it will set, i will side with apple in this beef. reasons apple can use for its defense:1. requiring apple to allow other app stores is like requiring walmart to allow target to setup a popup shop inside walmart. do people really think that is fair?2. apple’s vision relies on simplicity for the end user, and offering an abundance of options is contrary to this vision. apple’s success is testimony that its vision has merit and is correct to some degree. 3. there is a greater cost in terms of labor, support, education, etc to multiple app stores. this is requiring apple to bear this cost to support its competitors.

    1. LE

      I side with Apple also ‘to the winner goes the spoils’. In particular nobody is overpaying anymore than they are overpaying if they decide the want to buy a Birkin Bag or a Rolls Royce. Not to mention the amounts we are talking about here are nominal to begin with. I guess people forget what software used to cost. Real money. Not what I have seen on the app store.But more importantly this:1. requiring apple to allow other app stores is like requiring walmart to allow target to setup a popup shop inside walmart. do people really think that is fair?How do you get to that analogy? The question is whether Apple will allow software on a customers phone that is not purchased in a way that bypasses Apple’s security mechanisms. They definitely have a right and it’s legitimate. This is not ‘only use HP toner otherwise we will not honor the warranty’. This is not ‘Walmart should allow pop-up stores in their real estate’ . What is this now socialism or communism? What’s next Fred should allow other people to blog on his site because readers are harmed?

      1. Richard

        Apple will prevail but the the issue of monopoly isn’t directly at issue. The issue is whether one feels that they are purchasing the app from Apple or from the developer. The answer is obvious not withstanding Fred’s attempt to mold the facts to his anti-Apple position.Fred, USVs 1.0 them investing was networks. Platforms with highly engages dedicated users that that brought together buyers and sellers, such as Etsy.No one feels like they purchase items from Etsy. The Ninth Circuit incorrectly responded to Apple’s argument (which Apple continues to make on the Petition) that it was acting more like an “agent” for the apps developers than as a distributor. Apple does not buy the apps from the apps developers and set the prices (they have to be paid of course and could collect any number of ways , nor does it control the app once it is purchased – the app prices are in deed set “entirely set” by the apps distributors.

  11. Frank W. Miller

    I agree with everything you’ve said regarding market. However, there is a safety issue that needs to be added. Apple originally put in place their market (and the control that goes with it) at least partially to assuage the carriers about allowing third party software on these phones that are connected to their networks. They had (justifiably somewhat imho) a concern that allowing random third party code on their phones opened their networks to abuse. While this concern may have been alleviated over time, its still something that may need to be addressed by the court.

  12. Ben Longstaff

    Crypto apps could pay the Apple tax by registering the smart contract with Apple and having the requests from the app be proxied through an Apple smart contract (similar to how uport pays the transactions fees on behalf of users)Walled gardens are good for lots of consumers, particularly the more vulnerable in society who are more susceptible to spear phishing.I believe this will become more important when mobile devices store the private keys to a users decentralised identifiers and verifiable claims.

  13. iggyfanlo

    I support your points 100%.Certainly John Gardner’s point regarding the ownership of Apple and Google is true, but that’s also true of any monopoly and the responsibility of government to not just protect short-term property rights, but long-term economic health and competition.I saw it first-hand at Google offered a 3-year deal at 100% of gross revenue in a advertising placement deal with CPM guarantees and we took it. Overture (Old GoTo) could not match it and within Yahoo! eventually got crushed.Now Google would never offer that deal and standard is 70/30.

    1. PhilipSugar

      Here is my point. If you asked people on the street who owns that phone? 99.9% would say me. It is my phone. Au contraire mon frère. 55 pages of terms and services says Apple does.

      1. iggyfanlo

        Not sure if you agree or disagree with my comment. Probably my badBut I’d add that in the government has dominion over everything and creates the laws that govern and has both the right and responsibility to protect the long term interest of the people and collective livelihoodIn that vein I’d come out in favor of monopoly busting over “property rights”

        1. PhilipSugar

          I agree. See my other comments. Government’s job is to make companies say exactly what they are doing clearly. And in the case of monoply or duopoly to control the rights of it’s populace. If my electric company said you need to pay to mine crypto, but not light my Christmas tree, or my internet provider said I need to pay extra to buy from Amazon there would be an uproar.

  14. PhilipSugar

    How ironic is it that apple wrestled the carriers distribution monopoly away? For those too young Verizon used to take a big cut and massive approval to put something on “their” cell phones.Apple will argue about the TOS. I won’t.What Apple should have to say is: We own this phone ahole, and you better get used to that.Now that wouldn’t be good for sales would it?Chamber of Commerce…….I went to one of their meetings on an invite one…….from my perspective it is made up from those people you never want to meet or be associated with.

    1. LE

      What Apple should have to say is: We own this phone ahole, and you better get used to that.It’s just more of the general movement on the part of the public marching in the direction of ‘whining entitlement’. All stoked by the media ie ‘questions are being raised by many about…’

      1. PhilipSugar

        No, I am fine with that. You know when you used to buy an IBM 360 they said they owned it, and that went away.

        1. LE

          Look we all know that this is driven by attorneys. Obviously no end user really gives two shits about what is going on here.Whatever happened with IBM was most likely the same. End users were probably happy. People who wanted in on the market almost certainly drove the entire process.Look the days when you could buy a machine from a manufacturer and their software are long gone. But I did do that and it was a great experience. It was very expensive but you had one less thing to worry about. One call, which got answered quickly, and any problem you had hardware or software was quickly resolved 24×7 (if you paid for that). Not like that today is it?

          1. PhilipSugar

            I’m not debating whether or not you as Apple can say the second you put second party software you null and void any and all warranties.I get it.Yes you are right many people will click on a program to put funny pictures on a picture of their cat even if it means it steals all of their data.Question is do you have that right? If Apple said we own this phone, then I would say no.But Apple wants it both ways. I am just saying make it clear. When I buy Office360 from Costco (great deal) it is clear. I get 15 months. I don’t own it. Same for my monthly cell bill. If Apple clearly says, this hardware is only for use with our software, I get it. Go to your Starbucks and ask my question. Not how they are selling it.

          2. LE

            Don’t you think the TOS says this dejure ‘we own it’. Sure it’s buried and sure nobody reads the TOS but that isn’t a defense at all.Typically if a company goes to great length to make a customer (business or consumer) aware of a fact they do it because from a practical standpoint it promotes good will. Not because they are legally (or even morally) required to do so. Or because they figure if someone complains they will handle on a case by case basis and will come out ahead.Why does Apple have to openly tell people ‘you don’t own this phone’. Say in large signs at the store or with large print on the package. That will raise costs for people not lower them. If it inhibits sales and Apple charges less not good for anyone.I would say that most likely over 90’s of people who buy Apple products don’t care about this issue in the sense that when they find out (if they find out) they are cool with it. But if you give them a reason in advance to buying they might care even though they shouldn’t. It’s a non issue. Fred only cares about it because it impacts his investments most likely. (And he doesn’t like Apple either..)Now with Office 360 (or Photoshop) it’s clearly stated that you have to pay every year so they avoid you thinking they hoodwinked the customer. That is entirely different.Look when I bought the first luxury car I found out after the fact that you have to pay to keep the warranty up. For sure they didn’t disclose that to me. Does not seem to impact repeat business so what advantage for the % of people who feel they were cheated vs. those who just think ‘ok that’s the way it is my mistake for not knowing enough to ask’ (which you do second time around).

  15. JLM

    .The big legal issue is one of “standing” meaning does the plaintiff have a direct contractual relationship with Apple (privity)?Or is it a derivative relationship? Which means a consumer cannot sue Apple.The relevant legal precedent is a case called Illinois Brick. To find for the consumer, this precedent would have to be overturned.This is like the Owner-General Contractor-Subcontractor relationship.A Sub cannot sue an Owner as they have no direct relationship. An Owner cannot directly sue a Sub for the same reason.This case will be impacted by the addition of Justice Kavanaugh who is likely to champion the issue of property rights and privity.These tech monopoly issues are going to flood the SCOTUS for the next few years. The big question is does the action complained of restrain trade?Somebody will be unhappy.JLMwww.themusingsofthebigredca…

    1. PhilipSugar

      No the States are not saying that they got overcharged. That is Illinois Brick. They are saying their citizens who they protect are. It is not a subcontractor issue.

      1. JLM

        .Read – “…it is like … “This is a simile. A simile – look for the words “like” or “as” – shows the similarities between two different things.JLMwww.themusingsofthebigredca…

  16. LE

    Second, the developers are not going to attack Apple because they are their only way to get to market.It’s hard to believe that with a company as large as Apple there could be actual retribution as a result of being a party to a case like this. It’s like saying an employee won’t sue a large company for fear of retribution. Or a student won’t sue a college for fear of retribution. One end of the animal does not know or care what is going on in the other end. And the chance of some actual policy documented by emails or conversations is slim.

  17. Elia Freedman

    I’m only going to focus on the first part of the first argument you make regarding increased prices because of the App Store. (I agree that developers cannot bring suit against Apple as we aren’t stupid enough to bite the hand that “feeds us.”)Prices would not be lower if the App Store didn’t exist, however. You would likely pay more for software, not less. The nature of the App Store — a single place to find software — creates a single market with so much supply that there are few ways to differentiate oneself in the place where most people look for apps. Supply outstrips demand and prices drop. That’s the reality of the current market. Furthermore, some 70+% of apps are free to download. Hard to lower the price on that, and once they have you in the app the price is the price if you want the advanced features provided by paying.Would I like Apple’s tax to be lower? Of course. Apple should charge 10-15% instead but I can guarantee to you that every developer would pocket the difference. It would not be passed along to the customer. Outside of a few exceptions, most developers are making almost no money in the App Store as is. Every penny would help keep us in business.

  18. Salt Shaker

    Android market share to iOS is 54% to 44%. How can you accuse Apple of anti-competitive, predatory type practices when they’re not even the market leader? Consumers do have a choice against being locked into their walled garden ecosystem, and so far that choice is winning out. I can, however, see this all leading to better/clearer mandatory labeling requirements on phone purchase to insure transparency.

    1. obarthelemy

      Are you saying duopolies and oligopolies are fully competitive ?

      1. Salt Shaker

        What’s to stop someone from launching a new platform, though current dynamics would obv make that more than challenging? Why can’t DDG, for example, become a strong developer platform. Besides, this case is specific to APPL, where in essence G is providing them w/ legal ground cover as a legit alternative.

        1. obarthelemy

          Because network effect and ecosystem effects and all other sorts of barriers to entry. Samsung tried and failed, Firefox tried and failed, Nokia tried and failed, Canonical tried and failed… I’m sure a few guys in their garages tried too ^^The market is spoken for for the current “Mobile” era, what will open it up again is a tidal change similar to the PC-to-Mobile transition that MS missed so hard, and that won’t happen for a lot of years, if ever, and incumbents will still have a leg up.G is indeed playing alibi to Apple, the way Apple was playing alibi to MS in the PC era. But corps have learned from the 1st time around, and Apple’s lock-in is an order of magnitude stronger than MS ever had on PCs: Apple gets a cut on any app, any media, any peripheral, any service sold on/for an iDevice. This unassailable lock is a brand new development, MS never had that, they were content to sell OS licenses and cheat a bit on cross-selling other apps. They never got a cut of all sales, nor locked competitors out.

          1. Salt Shaker

            Nothing new or proprietary about their biz model. One can easily argue that their terms aren’t fair, but compensation for distribution is no diff than royalty payments on affiliate deals. Look at the cable model. MSO’s distribute and share rev w/ cable networks. Cord cutting and OTT are evolutionary solutions to an alleged monopolistic biz model. What’s to stop someone from circumventing APPL’s stranglehold w/ a more fruitful and lucrative biz model for developers? Is there a market need, though? Perhaps not…not sure consumers care that much, unless potential savings get passed along.

          2. obarthelemy

            It’s not the compensation for distribution that is unfair or new. It’s the selling devices whose main/only goal is to run apps (also called “computers”) , and then lock then down to only apps bought through the appstore. That’s the console model (and even then, some consoles support homebrew or apps on disks), yet iDevices things are sold as computers (“the only computer you’ll ever need”).The analogy would be a TV that can only display content from a specific broadcast network, or connect to a specific cable provider.

          3. Salt Shaker

            “Selling devices whose main/only goal is to run apps.” Not sure data supports that conclusion (though specific usage prob does vary by demo). If the consumer doesn’t want to be wed to a closed system (iOS), then get an Android device. Pretty simple. Android op systems are the best thing that ever happened to APPL; an unintended consequence. Further, the safety and security that iOS delivers wrt malware de-commoditizes the industry. There are some added value benefits and points-of-differentiation w/ iOS vs. Android.

          4. obarthelemy

            If the goal is not to run apps, what is it ? Calls and texts ? I’ll add anything that was in the original Palm Pilot or iPod as ‘”not an app” (calendar, contacts, music, video, notes, Snake). i’d be mightily surprised if that’s all most users use their smartphones for – and it’d beg the question, why are they buying a smartphone at all, especially an iPhone, if that’s all they do with it.I’m not sure iOS is safer, or much safer than Android. Google has gone public with a 0.08% incidence of PHA (mostly, ad-clickers) for non-rooted, PlayStore-only phones. And that’s for all devices running the PlayStore, even very old ones; well-updated phones (ie, Pixel, flagships, recent phones) do better than that. Has Apple ever published a figure ? What’s your statement based on ? When looking for info, I mostly came across:…iOS indeed comes out ahead, but by a bit, not by an order of magnitude. And the CVE stats are warped by the fact that Google rewards all bugs/exploit disclosures, Apple mostly doesn’t. I’m interested in more info on that topic, I see a lot of opinions but very little information.Aside from security, there are indeed several points of differentiation. Which way they balance depends on what the user wants, ie low-latency sound input vs a state-of-the-art browser w/ addons; etc…

          5. LE

            Once again (because you probably didn’t read yet my other reply) it’s not about distribution solely it’s about security and Apple blessing apps as being safe.

        2. LE

          What’s to stop someone from launching a new platform, though current dynamics would obv make that more than challenging?The exact issue is that Apple controls access to installation of software on the phone by way of the App store. Not that there aren’t other ways to buy or get software on the phone (jailbreak etc.).So it’s like this. You can spend $50 million and buy 20 ads on the Superbowl broadcast. People then ‘know about your app’ and go to your website. But to get it on your phone is not only non trivial but potentially breaks security on the phone. So in order to get your apps on the phone you have to get Apple to put you in the App store (from a practical perspective but as mentioned there are non practical ways given trust to get the app on your phone).What you are paying Apple for is peace of mind that you won’t install something that harms your phone or is nefarious. For example there are certain things that Apple does not let Apps do which could be security risks. Sure it’s not perfect and mistakes are probably made. But it is vastly better than trusting some ‘guy with a website’ regardless of how you found out (a competitive store or not) about the app.Your ‘what’s to stop someone from launching a new platform’ is valid but that is not the issue (it’s not discovery is my point).The only current non practical way around this (to be complete in my answer) would be a place where you could buy an app or a certification process whereby someone guarantees that you will not have a problem if you bypass Apple’s security which requires (generally) that apps come from the app store.

  19. JamesHRH

    Would be interested to know why they did not argue that an open App Store was a threat to their product.

  20. Richard

    Every position Fred takes on this Blog is in support of current or future investments by USV. He doesn’t hide that.

    1. creative group

      Richard:We are aware of Fred’s positions dictate his views. Our views didctate our positions. The reason why we inquired into what was that position, company, etc. if any.In some cases it may not even be anything currently that motivates his thought. Reread our post.Captain Obvious!#UNEQUIVOCALLYUNAPOLOGETICALLYINDEPENDENT

  21. aminTorres

    I guess apple forgot what was the point of the app store and why the first decided to funnel apps via it only. I can only deduce that based with these lame excuses. But, I am not sure a third party app store is going to do more good than harm. If the quality of apps and the intent of them is not held to some standards we might see apps ruining the party for other apps. Also, isn’t this a bit late? who downloads apps anymore unless they have to?I find it funny though that you are all for the government putting their hands all over this but with with crypto and the blockchain you are all against it? I guess innovation is the common threat in both cases?

    1. John Revay

      It was nice that they let Melania in.

      1. sigmaalgebra

        The White House Christmas decorations are no doubt awash in angels, including USA’s leading angel!!!

  22. jason wright

    Isn’t it time for the Supreme Court to finally ban proprietary printer cartridge designs? I want to be able to put my HP cartridge in my Canon printer, and visa versa. I feel like a printer prisoner of conscience.

    1. Lawrence Brass

      TV remotes are the best expression of freedom.Place the buttons wherever you like with random and creative labels and signs so consumers have a choice.Freedom.

      1. obarthelemy

        TV remotes are FREE and whatever their button placement they will go where they please. Sometimes they disappear fro weeks !

      2. jason wright

        What if future TVs work on retina scanning, and imagine the manufacturer selling your viewing habits to ‘Google TV’.

      3. JLM

        .I use a voice activated one. No buttons necessary.JLMwww.themusingsofthebigredca…

    2. obarthelemy

      Actually, at least in Europe, we’ve had lawsuits about printer OEMs trying to, in turn,1- block 3rd-party cartridges. 2- Then refills. 3- Then having printers complain of low ink where there was still quite a bit.And there’s of course the whole con of having 1 cartridge with all the colours, ensuring you waste all of them but one. And printers with separate black and colour cartirdges refusing to print in black and white when the colour cartridge has 1 colour empty.HP was, at one time, best described as “a printer-cartridge company” (I think John C Dvorak coined that ?) because *all* their profits were coming from there, not PCs, not servers, not services, ….I’m not sure your snark works as intended ;-p

      1. jason wright

        With my HP printer with two cartridges (a black and white, and a tricolour) if i remove one of the cartridges the machine defaults to the other cartridge. I can print monochrome from the tricolour. Have those Euro lawsuits changed anything? I haven’t noticed. It got you commenting some more. success.

  23. sfrancis

    the statement at the end: “the result is higher costs for consumers, less choice, and ultimately less innovation” doesn’t stand up to scrutiny. The costs of apps on the app store (and google’s store) are the lowest for commercial software of any platform in the universe that i’m aware of. Games that would have gone for $40-80 on a PS4 go for 4.99 on the app store, and the median price of all applications is zero (free). If anything, the challenge to developers now is how to make enough money to make a living on the app store – not because of the fees but because user expectations are set so low on pricing that if they ask for a reasonable price, no customer will pay for it…I think the main issue is that no one can really show economic harm.

    1. obarthelemy

      It’s fairly easy to show economic harm:1- you’re comparing console AAA titles that require decades of work to much lighter mobile apps and games. The graphics assets alone are not comparable.2- console are sold 50m/yr phones 350m/yr, so even most of that x10 price differential is explained by mobile’s target market being 7x bigger3- the appstore lock on iDevice apps precludes any marketing innovation not supported by Apple, or simply any old school marketing tactics available everywhere else: money-back guarantee (Google has it for 15 minutes after paying, time enough to check the app runs well, I think Apple still doesn’t), upgrade prices, bundles, student pricing, senior pricing, army pricing, quantity discount… I can’t even buy an appstore gift card for my nephew who’s in another country.4- On the Android side where there is a choice, some corps and devs choose to forgo the PlayStore, either for more profit (Fortnite) or to release apps that break the store’s rules (porn, technical hacks, store-rules-bending…). Apple prevents that.5- Apple has a strenghtening hold on app recommendations, after lowering referrals commissions to the point referrals are no longer a viable business.

      1. sfrancis

        Size of the market doesn’t dictate costs per se. Applications on Windows typically cost more than App Store apps, and this was true even before there were more iPhones than Windows devices… And the price (average or median) has declined since the first year apps were allowed, it hasn’t gone up… so the harm is?…It isn’t clear that android users pay less for their apps, and they have a real cost in terms of unsafe applications that apple store customers don’t have, when they go around the google play store entirely. ie, there is an exchange of value. you mentioned some inconveniences but it is hard to show actual economic harm to consumers… which is typically the standard for anti-competitive rulings.

  24. Steven Kane

    To paraphrase Peter Thiel: We wanted an open internet and all we got was proprietary app stores.Ugh.