Juli Clover (also: 1, 2):
Apple CEO Tim Cook is today participating in an antitrust hearing with the U.S. House Judiciary Antitrust Subcommittee alongside Alphabet/Google CEO Sundar Pichai, Amazon CEO Jeff Bezos, and Facebook CEO Mark Zuckerberg.
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Cook is expected to be grilled about Apple’s App Store policies in regard to app rejection and competition, disputes with the FBI over encryption and law enforcement access to locked devices, Apple’s relationship with China, and its App Store fees and subscription policies.
Cook was initially reluctant to participate in the hearing because he does not believe Apple should be grouped with Facebook, Amazon, and Google as an antitrust violator, but he was not able to avoid testifying after a threat of a subpoena from subcommittee chairman David Cicilline, who publicly criticized Apple’s App Store fees.
Tim Cook (text, also: Mark Gurman, tweet):
When the App Store was created, the prevailing distribution options available to software developers at the time did not work well. Brick-and-mortar stores charged high fees and had limited reach. Physical media like CDs had to be shipped and were hard to update.
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The App Store guidelines ensure a high-quality, reliable and secure user experience. They are transparent and applied equally to developers of all sizes and in all categories.
It’s sad to see Cook shred his credibility like this.
For the vast majority of apps on the App Store, developers keep 100% of the money they make. The only apps that are subject to a commission are those where the developer acquires a customer on an Apple device and where the features or services would be experienced and consumed on an Apple device.
I’m not sure what point this is trying to make. Are we supposed to be happy that Facebook pays nothing, while privacy-respecting apps that are exclusive to iOS pay 30%? Does it make sense that gym classes need to start paying Apple 30% because they now must be conducted remotely due to the pandemic? How does Apple giving the high-profile ClassPass a reprieve until the end of the year accord with the earlier statement about everyone being treated equally?
In the more than a decade since the App Store debuted, we have never raised the commission or added a single fee. In fact, we have reduced them for subscriptions and exempted additional categories of apps.
They added a de facto fee for search ads; if you don’t pay it, when someone searches for your app it won’t appear at the top of the list even if it’s the best match. They also changed the unwritten rules so that e-mail apps (as well as other categories) now have to offer IAP (and, thus, pay more fees). It also used to be allowed to sell e-books within an app’s Web view.
Notable to see Apple confirming a point I’ve been trying to make: the company believes it is entitled to all commerce that happens on an iPhone.
No new arguments, just the same tired comparison to physical retail + reminder that most apps pay nothing because this particular Apple Defending 30% Statement is a Most Apps Pay Nothing Statement rather than an Everybody Should Pay Their Share Statement.
Take for example the Netflix Rule — the “reader apps” exception that allows Netflix (to name the most conspicuous example) to offer an iOS app that does not use Apple’s in-app purchase system.
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It is prima facie wrong that one of the rules is that an app is not allowed to explain the rules.
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No mention here of Steve Jobs’s statement, announcing the App Store in 2008: “We don’t intend to make any money off the App Store. We’re basically giving all the money to the developers and the 30 percent that pays for running the store, that’ll be great.”
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The analogy to a “quality department store” holds as much water as a sieve. The App Store is analogous only to something like Amazon, an everything store, with apps ranging from premium products to abject junk.
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Talking about brick-and-mortar software distribution without even mentioning direct downloads and sales over the web is flat-out dishonest, and clearly the most disappointing aspect of Cook’s prepared testimony.
Apple CEO Tim Cook comes closest to offering outright alternative facts to Congress in a defense of the company’s App Store that essentially erases the history of online distribution before the 2008 debut of the App Store.
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Installing apps on early handheld organizers was not so easy, requiring a download to a computer and then a transfer to the gadget. But by the mid 2000s, Palm OS handhelds and smartphones hosted a thriving market for third-party software.
If I make and distribute toothpaste, I can offer the exact same product via Kroger, Safeway, and Albertson’s — and I could sell it from my own website and via Amazon.
That’s a lot of choices I have for selling my product.
But if I write an iOS app, I can sell it via the App Store and through no other method.
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And they haven’t realized that current App Store policies actually hurt the situation: we don’t have the quantity and quality of apps we should have. Which hurts that very ecosystem.
Apple is unlike any other platform when it comes to the North American market for premium services like HEY. As of today, 90% of everyone who pays for our service uses at least one Apple device. 3/4 of all paying customers have the iOS HEY app that Apple was threatening to evict installed on their phone.
Apple isn’t just a dominant player in this market, they are the market.
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Apple controls who can and cannot compete in virtually all sectors of the digital economy through the monopoly power they wield capriciously with the App Store. It is simply not possible to even get the chance to take on the likes of Google, Microsoft, and Verizon with a new email service without begging Apple for permission to do so.
I would argue a heathy indie population does more for Apple than the sliver of service revenue we contribute to the balance sheet. We cater to niches and sometimes invent new things. In fact, according to an Xcode engineer, the design of Swift Playgrounds was based on Soulver.
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Better yet, how about a model where App Store revenue is derived from the apps that use the most resources? Like, does Soulver (a paid upfront app) really need to subsidise Facebook’s free apps like Instagram & Messenger?
See also: this quote about using the App Store to strong-arm Random House into supporting the iBooks Store.
Previously:
- Schiller Interview Before the App Store Hearing
- Another Apple-Funded App Store Study
- Highway Robbery
- HEY Rejected From the App Store
- WeChat’s Apps Within an App
- Early App Store Search Ads Fail
- Purchasing From the Kindle App
- App Store Subscriptions
Update (2020-08-03): Ben Thompson:
It’s so funny how Apple has adopted this “The Internet doesn’t exist as a distribution channel” approach to its App Store rhetoric.
The App Store was revolutionary, particularly in the way it made users feel safe, relative to the Internet, which existed. It’s ok to admit that!
I’ve been selling Mac software since 1984. Brick and mortar has never been a big player. In the 80’s/90’s it was mostly mail order, late 90’s transitioned to online, which our business still uses. Mac App Store was a flop for us, fortunately online is still strong.
Something that should be asked at the hearing, but won’t: why does Apple let some companies blatantly violate App Store rules? For instance, why is Youtube allowed to break background audio and resell that feature as a subscription?
See also: Ben Thompson.
Mark Gurman (article, Reddit):
Now we know how Apple convinced Amazon to finally put Prime Video on the App Store in 2017: Apple agreed to only take 15% of revenue from Prime Video subscriptions made on iOS, versus the 30% they were taking from others.
When asked about the inconsistency over the approval of the [Hey] app and the subsequent controversy, Cook didn’t have much to say other than pointing out that the issue was resolved and that the App Store provides a lot of value for developers.
Having Tim Cook say that everyone is treated equally when it is clearly not the case is not a good look.
In 2008 we were contracted to build an app
Apple held it up for 9+ mo over CC payments
Meanwhile, ComiXology was released and was allowed to do the same thing
In 2011 they was the #1 grossing app in the App Store
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We were just contractors building it but It was heart breaking watching Apple give ever-changing reasons to deny the app which imo led to the failure of the company. Hard to build a business when everything is made up and the points don’t matter.
The App Store upheaval is a nightmare of Apple’s own creation. The concept of a “curated” store got kicked to the curb when addictive games like Candy Crush started bringing in $50 million per month.
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Tim Cook testified that all developers are created equal, but anyone paying attention knows that’s false.
The key sticking point remains that the App Store is the only distribution channel for iOS. It is an officially designated, formally recognized monopoly.
If there were a Plan B for developers, then Apple would be able to prove that the value added by the App Store justifies the 30% Apple cut. But there isn’t.
At least one of the elephants in the room: Apple already has a longstanding platform where the App Store is optional — the Mac — and very few of the developers you care about are present in its App Store, because the terms just aren’t good enough.
Neguse to ask Cook about the App Store. Does Apple have to operate by the same rules as developers? Yes, says Cook. Neguse asks why Apple gets to submit clones of apps when the rules specifically prohibit that for others. Cook is “not familiar with that.” Woof.
There’s no other word to describe this other than lie. Just look at how many of their apps in the AppStore have private entitlements and use private API. The Clips app doesn’t even ask you for camera permission, it gets it by default
Flux:
In 2009 we first approached Apple to get f.lux on iPhones. Years of promises of API access. The last conversation we had with them was “that’s too weird for most of our users. Like the Klingon keyboard.” Then, they announced their clone onstage, Macworld 2016.
Hartley Charlton (also: Nilay Patel):
Originally, Kindle books were available for purchase via the iOS app. Since 2011, the Kindle iOS app has only allowed users to read books in the app.
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Phil Schiller expressed concern in one of the emails that Amazon was advertising the fact that users could still access Kindle books purchased on iOS on Android devices, suggesting it was convenient to switch from iOS to Android.
Schiller explained that Apple initially made an exception for Amazon[…] Over time, as sales of iOS devices rose dramatically, Schiller believed that it was time to reconsider the exception. […] Amazon later removed a link to the Kindle Store in the iOS app to comply with the new App Store subscription rules.
We have come to believe Apple has created a dangerous new normal allowing it to abuse its monopoly power through punitive fees and censorship that stifles technological progress, creative freedom, and human rights.
See also: The Talk Show, Accidental Tech Podcast, the evidence presented to the House Judiciary Committee.
Update (2020-08-05): Ben Thompson:
The questions for Cook were hilariously uninformed about the App Store, making it easy for Apple’s CEO to run out the clock (often without any interruption). This was certainly disappointing given that many of Apple’s policies are clearly anticompetitive (which, as I noted above, is different than being illegal), but for now the takeaway is that Congress doesn’t know and doesn’t care.
“We treat every developer the same. We have open and transparent rules,” Cook said. “It’s a rigorous process because we care so deeply about privacy, and security, and quality. We do look at every app before it goes on, but those rules apply evenly to everyone.”
Cook denied that certain larger developers are favored over others.
In light of Cook’s testimony, developers this week spoke out against App Store policies, calling Apple’s practices restrictive and “unfair.”
When it comes to the App Store, if there’s one thing that hurts developers more than the impact on their wallets, it’s the lack of transparency. Tim Cook may state that the company provides clear rules that it enforces equally for all developers, but that’s at best disingenuous[…]
What Apple desperately needs is an ombudsman: somebody who advocates for the developers, but is independent of the App Store hierarchy. And, most importantly, someone who has not only the ability but the responsibility to go public when things aren’t up to snuff. Putting forth ideals of transparency and equality are all well and good, but let’s call it like it is: unless somebody’s holding the company accountable to those ideals, standards are going to slip in the name of the bottom dollar.
Would iOS devs distribute their apps outside of the App Store if that was possible?
Is a false question. Apps are written to fit into the App Store model. Low$/no trial/IAP.
What kind of app would devs write if it was possible to distribute outside of the App Store?
So many people tout the App Store as a huge success, but they can’t see what might have been. Everyone, including Apple, has been missing out.
See also these podcasts: Paul Kafasis, Upgrade, Stacktrace.
Update (2020-08-10): Javier Soto:
Well isn’t this interesting. Youtube got a special entitlement to be able to use VP9.
Tim Cook: “We treat all app developers equally”.
Netflix also got early access to energy efficient DRM decryption. WWDC about 4 years ago everyone else got it.
When it comes to the App Store, if there’s one thing that hurts developers more than the impact on their wallets, it’s the lack of transparency. Tim Cook may state that the company provides clear rules that it enforces equally for all developers, but that’s at best disingenuous[…]
What Apple desperately needs is an ombudsman: somebody who advocates for the developers, but is independent of the App Store hierarchy. And, most importantly, someone who has not only the ability but the responsibility to go public when things aren’t up to snuff. Putting forth ideals of transparency and equality are all well and good, but let’s call it like it is: unless somebody’s holding the company accountable to those ideals, standards are going to slip in the name of the bottom dollar.
If you follow the debate around Apple’s 30% cut that results in higher prices and worse apps, you are guaranteed to encounter at least one of the false narratives disclosed below.
Update (2020-08-11): Tanner Bennett:
People like to bash or ignore jailbreaking, but it really shows what iOS could be.
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With cool features like wishlists, downgrading, and update blocking, the App Store pales in comparison to what the liberated iOS ecosystem is capable of.
Update (2020-08-18): Paul Haddad:
Anyone else remember how Apple banned the (at the time) #1 Camera app from the App Store for an entire year for sneaking in a totally harmless feature?
Apple then copied the volume button feature in its own Camera app.