Apple’s antitrust mess could easily be ended, at likely minimal cost

Apple’s antitrust mess keeps getting worse, with today’s Apple Pay announcement as the latest example. The company is now under fire on So many flanks in so many countries that it spends half its PR life trying to defend its stance – and legislation is ultimately going to force it to change anyway.

To me, the most baffling thing about the company’s stubbornness on this issue is that the mess could so easily be resolved, and my bet is that it wouldn’t even cost the company much money.

If you think it’s about monopolies, readThis is the first

First, let’s clear up a common misconception about antitrust laws. They only apply to monopolies. This has literally been a problem. NeverThis has been the case. In fact, we highlight in our guide that the very source of the term assumes. multiple large companiesYou can work in the same place:

In most jurisdictions around the world, it is illegal for large companies to band together to form agreements or “trusts” to behave in a particular way – for example, to all sell their products for the same high price. Antitrust legislation is a set of laws that are designed to prohibit this type behavior.

We go on:

However, this term is often used to refer to laws intended to stop companies from engaging in illegal activities Any kind of anti-competitive action – that is, do anything that would tend to artificially distort competition within a market.

Mobile phone apps have a huge market. Apple holds around 27% of the global mobile phone market. Within some countries, it’s around 50%. In Apple’s home market of the US, it’s well over 50%. Apple is everywhere you cut and dice the numbers. OneOne of the most dominant positions in this market is held by one of the largest companies.

Many antitrust disputes share a common element.

Apple is currently facing antitrust challenges on many fronts. Apple holds complete control of the marketplace. This is the main reason. App Store. It decides the commission rates and iOS developers must pay it. Numerous regulators would like to see multiple app store options so that there is more competition in the sale and purchase of iPhone apps. Consumers and developers can choose which store to support.

There are a bunch of other issues, with some overlap with the App Store …

Apple Music vs Spotify. This is a unique case, as Apple Music competes directly with Spotify. Apple’s own app has many advantages when it comes down to attracting paying customers.

• Apple Music can be subscribed to within the app
  Spotify would have to pay Apple $30 to do this (which is economically impossible).
• Apple Music Promos in iOS
• Apple Music is part of a discounted bundle (Apple One).

Preinstalled Apple apps. Apple creates its own apps and preinstalls the majority of them on iPhones. Apple has an advantage over other third-party apps as the default is that people will use Apple apps. It would be easier for iPhone owners to choose which apps they want to download.

Apple Arcade vs Epic Games. Apple allows itself to have an in-app store for games (albeit renting rather than buying them), but it doesn’t allow other companies (like Epic Games) to do the same.

Apple Pay. Apple restricts NFC access to its mobile wallet app, while denials it to other competitors. Apple Pay is mandatory for banks and card companies that want to offer contactless payment services to their customers.

These are all linked by the common thread that Apple has financial advantages while its competition is left behind.

Apple’s defense

Apple’s music has nothing to with money, if you listen to it. Oh no, siree! This is all about protecting customers.

The company has a point, to be fair. If you compare the malware rates between iOS and Android – especially when it comes to those Android users who venture beyond the Google Play Store to third-party stores and sideloaded apps – then it’s clear that the App Store is safer.

Apple would be similar about Apple Pay. This is a very secure way to pay. Apple, for example, generates a single-use card number for each transaction and shares it with only a few payment terminals.

However, third-party companies may offer the same protections

Apple claims it guarantees that all apps are safe when they allow them into the Apple Store. That’s a slightly disingenuous claim, as it’s mostly the protections built into iOS – like sandboxing – which protect users. It doesn’t matter where an app was downloaded from.

Apple also continues to protect users scam apps. Erm …

The broader point here is that any third-party app store would be free to do its own vetting, and there’s no reason why it couldn’t do at least as good a job as Apple.

Same with Apple Pay’s single-use tokens. This is not Apple tech: it is instead an industry-wide protocol known as EMV Payment Tokenisation (the EMV stands for Europay, MasterCard, Visa – the three bodies who jointly developed the approach). Google Pay and Samsung Pay both do the same thing. Individual banks can create apps using the same technology. Yet only Apple Pay can use it on iPhones because you can’t do it without access to the NFC chip.

Any protection Apple offers could also be provided by third-party firms. However, this isn’t even my main point.

Most people would still choose Apple’s walled garden

Even if Apple’s scare stories were accurate – that only Apple can properly protect customers from the big scary world outside its own walled garden – that isn’t really the point.

Although there are many, Sometimes suggestion that Apple should be broken up, the vast majority of antitrust regulators are not telling Apple it can’t offer its own app store or music streaming service or mobile wallet product or weather app or gaming subscription or anything else.

All regulators are saying is that Apple should allow third-party companies to compete on a level playing field – in other words, Apple should continue offering the official App Store while allowing third-party ones too. iPhone owners then have the option to choose which store to use. Apple Pay can be used to continue offering it, and bank apps can use the NFC chips. So on.

My bet is that this wouldn’t even cost Apple much money – for two reasons.

The average Apple customer is not tech-savvy. Apple will always win. If you offer them both an Epic Games and Apple app store, the overwhelming majority will choose the Epic one.

Second, even non-techy people can be techy. Most of the timeI will stick with Apple. The main reason I bought the Apple kit is that I love and appreciate the Apple ecosystem. I like the way everything is integrated because there’s one company running it all. Even those who don’t consider all the options and look at what they offer will benefit. still mostly stick to Apple’s offerings.

Apple invites legal trouble without good reason

This is why I’m baffled by Apple’s obstinacy on antitrust issues: There is virtually no cost to opening things up and there’s a significant risk to not doing so.

Apple can, within reason, choose its terms if it opens up things voluntarily. As long as Apple does the right thing and is fair, politicians will have little to no incentive to push it further.

It could end up with a much worse deal if it waits for legislators to define the terms. Right now, for example, a lot of people are arguing that Apple’s 30% commission for large developers is too high. Apple might have to accept a lower commission if it waits for legislators to act. If it simply allows third-party app stores – which hardly any iPhone users will bother using – it can continue to take its cut while shrugging and telling legislators that developers and consumers alike are free to use any of the other iPhone app stores out there.

Apple is now the leader, and Apple should act as such

Macworld’s Dan Moren suggests this stubbornness is part of Apple’s DNA.

There’s something in the company’s DNA — probably handed down in part from late co-founder Steve Jobs — that promulgates the idea that there are two ways to do things: an Apple way and a wrong way.

It could be possible. Steve did many things that were not common to other people saidThey were outrageous, and he won most.

But today’s Apple isn’t Steve’s Apple – the upstart company fighting against better-established corporations. It’s no longer the little kid in the playground bravely defying the bullies. Apple is now the school team’s 240-pound quarterback who is increasingly looking like he wants to do the bullying.

It’s time for a more mature approach. Apple, you must accept that antitrust pressures will not disappear by magic. Recognize that you’ll get a better deal through voluntary change now than via regulated change later. Acknowledge that there’s a reputational cost to fighting all the way to defeat, and a PR gain to be had from acting now. Be a leader and not a follower.

That’s my view; what about yours? Take our poll and leave your comments.

Photo: Rock Staar/Unsplash

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