Congress Critical of Apple’s Monopoly Power

image credit: Roll Call

published by Chand Bellur – October 7, 2020 at 5:51 p.m.

  • A House of Representatives anti-trust subcommittee released a report outlining monopolistic and anti-competitive tactics of major tech corporations.
  • Apple received the most scrutiny, as iPhone, iPad, and iPod touch users can only install software from the App Store.
  • Lawmakers suggest radical actions, such as breaking up tech corporations like Apple, making the App Store an independent entity.

Is the App Store Monopoly Coming to an End?

It’s not easy being an Apple customer these days. Although many are content, a growing number wonder how to install Fortnite on their devices. Unfortunately, for now, the App Store’s ban on Epic Games denies users apps available on other devices powered mostly by Android, Windows, and Apple’s own macOS.

Apple contends that they lock users into the App Store for security’s sake. Scrutinizing submitted apps and updates prevents malware. A unified App Store provides better usability, as customers aren’t confused with a multiplicity of options.

This logic all falls away as Apple’s own macOS operating system allows users to install software from the Web, bypassing the App Store. Virtually every device and operating system on the planet runs on apps installed from a variety of sources.

Apple’s motive to shackle users is likely more about profitability than safety or product quality. Competitors, locked out or marginalized by Apple’s ecosystem lock, now challenge the tech giant’s hegemony. As voices grow louder, U.S. lawmakers now have their attention, and Apple is in their sights.

House Subcommittee Issues 450 Page Report Challenging Tech Monopolies

A new movement seeks to challenge Apple’s App Store monopoly. Developers such as Epic Games, Tile, Spotify, and others formed the Coalition for App Fairness to counter Apple’s monopolistic practices. Lobbying Congress, the group meets an ongoing effort of mostly Democratic lawmakers seeking to rein in big tech and level the playing field.

The House subcommittee alleges Apple strategically blocks competitors using its App Store. In one case, Apple banned several parental control apps, shortly after launching the Screen Time app, providing similar functionality. The practice, known as Sherlocking, is widely employed by Apple to copy and shut out a competitor simultaneously.

Other allegations suggest that Apple takes advantage of difficulties switching to other platforms, such as Android. iPhone customers are bound to Apple, as their apps are not portable across operating systems. While many apps, such as Netflix, are easily transferable, games, and expensive, native apps typically must be purchased again. Purchasing the same apps for a new phone is a consumer burden, locking users into the Apple ecosystem.

Apple can remove any competing app in the App Store, employing a vast set of baroque rules. The company recently blocked one of Facebook’s most recent app updates because it provided irrelevant information to users. The objectionable information pertained to purchasing products outside of the App Store.

Lawmakers on the committee concur with third-party developers that Apple’s 30% cut is excessive and amounts to supra-normal profits. Developers paying Apple’s tax have less to invest in research and development. They must also pass these costs onto consumers.

Apple’s business practices are clearly predatory, as shown by the House subcommittee’s report. The group seeks severe reforms against Apple, which may include breaking up the company.

Will Apple Be Forced to Break Up?

It’s not unusual for the U.S. government to break up large corporations. One of the most famous was the break up of AT&T in 1984. At the time, the company grew to the point of choking out competitors. While some argue that market capitalism should run its course without hindrance, others see that monopolies are detrimental to the free market.

The House subcommittee contends that corporations like Apple should be separate from the App Store. They seek to legally compel Apple to sell off the App Store as an independent corporation. The restructuring would ensure that Apple cannot control or manipulate the App Store.

Although the move seems extreme, it still has a long way to go before it materializes into action. Congress must draft and pass legislation, which has yet to happen. Political action against Apple faces opposition in Congress. Breaking up Apple’s monopoly is still far off, as the company can challenge the law in courts, delaying action for years.

House Democrats may be playing hardball with Apple to gain the upper hand in negotiations. Simply allowing iOS and iPadOS users to install apps via the Web would effectively break the App Store monopoly.

I recently installed Fortnite, an app absent from both the App Store and Google Play, on my Android smartphone through Epic Games’ website. Third-party app stores could be available through the World Wide Web. Maybe Google Play will get into the iOS and iPadOS app business?

There are many options available to curb Apple’s monopolistic tendencies. Despite vast legal resources, this is a battle Cupertino is likely to lose. With the App Store being one of the company’s largest profit centers, they’ll have to scramble to compensate for lost revenues. Perhaps Apple is flying too close to the sun?

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