Apple Announces App Store Small Business Program

It's along the same lines of what Microsoft did when they were being investigated as a monopoly: throw a bone to smaller developers (or in Microsoft's case, kids in school) which actually just grows their market share (in Microsoft's case, kids learn to use Microsoft products and take that to work, in Apple's case, more devs see profitability in the Mac garden).

> Apple / Google’s 30% take is the anti-competitive elephant in the room here

No. They both built a distribution channel on which developers build, but they're not open markets. Those app stores are the property of their respective creators (this is a flaw of the app store paradigm in general, at least for those who want full control over their software).

Both Apple and Google are fully within their rights to charge whatever they want within their app store and enforce whatever capricious whims they like on apps that they distribute. It's the same as traditional book publishers writing their contracts with authors they publish. Which is why open platforms and device jailbreaking remain valuable for those of us who believe in personal ownership of our software.

Should that work in that way on desktop also? With Microsoft/Apple being free to restrict apps to their store only, and taking a cut of every transaction made outside the browser?

If not, what's the difference with phones/tablets?

Appoogle are a duopoly. You can’t get significant sales on mobile phones without going through their respective App Stores, which both charge 30%. What a coincidence!

Your comparisons with book publishers are specious: if I write a book today I can go to any of a number of publishers, none of whom have any kind of control over access to readers. Or I can even self-publish and sell direct.

Jailbreaking is a complete irrelevance in market terms: It’s effectively impossible to sell on Apple devices without paying Apple’s tax & very difficult to sell on Android devices (which Google controls via carefully written contracts with mobile phone manufacturers) without paying Google 30%. We have anti-monopoly + market collusion laws for good reasons. It’s about time they were enforced.

Google literally has multiple alternative app stores currently active.

The difference is just a historical choice. The desktop platform owners chose to be open in that way, but they didn't have to. Games console makers chose to go the locked down route at about the same time (in the grand scheme of things). The Mac launched long after many locked down games consoles existed. They just chose different strategies.

No, but it seems to be the direction those two companies are moving anyway. Just look at Windows 10 "S mode". I'm just glad we have Linux as an option on the desktop to get away from that nonsense.

We've barely been able to get people to stop referring to all Android devices as "Droids". The average person doesn't even know about alternate app stores, yet alone have the will to seek them out, install them, search for an app, and then pay for it (likely having to enter payment info this time). You might as well tell developers to release their apps on the dark web.

I'm sure you can release niche apps on these stores, but the general market isn't moving away from the Play Store any time soon, and that's where the money is.

the whole point of antitrust regulations is that

> Both Apple and Google are fully within their rights to charge whatever they want within their app store and enforce whatever capricious whims they like on apps that they distribute.

actually isn't always true - especially when it hurts consumers. of course it isn't up to us here to decide if it does. remember that private doesn't mean unregulated.

And how many of those are installed on the average US Android phone exactly?

What happens to a phone manufacturer who ships a phone with an alternate App store?

I'm publishing the same (paid) app on Google Play and on Amazon's store, which is AFAICT the most widely used alternative (outside of markets where Google is not active).

My Amazon income is less than 2% of the Google income.

Well, there is Amazon Appstore for Android, where you can buy digital goods (apps and games as well) on an Android device. Idk if the Amazon Appstore is available for IOS with the same terms. Can you buy IOS apps via Amazon Appstore on an IOS device?

> desktop platform owners chose to be open in that way, but they didn't have to

They probably did. The industry was small. Attracting developers in significant numbers meant convincing people to become developers. That is a huge hurdle. Platforms with entry fees didn't build app ecosystems that attracted end users.

By the time the iPhone was announced, developers were plenty and the software business model proven. Apple had resources to subsidize onboarding with a well-documented, rich API and good native apps.

Like which ones? Even the Amazon Appstore, the largest alternative store is so negligible we might as well pretend it does not exist.

How many of them have > 1% market share?

Amazon will pay a pittance for ebook sales unless you’re exclusive with them, and they’ll generally use their market leading position to limit your choices at every step.

Which just goes to show how Google’s and Apple’s investment of tens of billions of dollars building out their respective ecosystem presents a tremendous opportunity to developers.

Amazon made a half-hearted effort to compete in the space and the result is “less than 2%” in your case.

> what's the difference with phones/tablets?

The difference I see is more about Apple specifically, because unlike, say, Google with Android, they have full vertical integration. They make both the hardware and the OS. Everything about Apple is focused on complete corporate control over the experience.

If Apple decided to only permit apps distributed through App Store X on OS X, I wouldn't be at all surprised. That's Apple's MO. And there is a customer segment I think that serves, which is the consumer market which doesn't want to think about maintaining their own digital security, because Apple seems like a reasonably benevolent dictator in this respect, as much as developers dislike the cut they take. Requiring Apple to open their devices to third-party app stores would break this vice grip they have on the experience and, IMO, degrade the experience for Apple's end users (even if it might make things nicer for developers).

Just look at what Apple has accomplished in the meteoric rise of the iPhone. This is strong evidence of a company that is competing like hell to keep and grow its customers base.

“Hurting consumers” would be an almost Orwellian characterization of the smartphone technology revolution driven predominantly by the competition between Apple, Samsung, Google, Huawei, etc.

> of course it isn't up to us here to decide if it does

I also think it shouldn't be up to courts. It should be up to the consumers themselves. They generally seem quite happy with Apple and Google.

On the other hand, if there is a consumer need that is not being met by Google or Apple, it is a prime opportunity to disrupt the market with a new offering that fulfills that need. If Google or Apple stamp that out or have done so in the past, then I will agree it's an anti-competition issue.

Should this make a difference? Just because users don't actually use alternative app stores doesn't mean the alternatives don't exist. It's not like Bed Bath & Beyond gets to complain that they don't get as many customers as Target. It has to be okay for a company to find themselves with naturally large marketshare simply because they do good business. If Google is doing something unkosher to get/keep their marketshare (and they are) then that's what you have to go after.

> What happens to a phone manufacturer who ships a phone with an alternate App store?

You get to be the best selling Android phone every year. Are we all forgetting that Samsung ships their own app store? Nobody uses it because it's garbage but that's not Google Play's fault.

I think they should be allowed to do it. If we let them get away with it because the alternatives are worse then that's our own fault.

Hard to fault a business for realizing that they have a stupid amount of leverage because people have made themselves dependent on you and charging more.

> tens of billions of dollars building out their respective ecosystem presents a tremendous opportunity to developers

That's... one way to look at it.

Another way is that they'd be spending even more if there were more healthy competition in the alternative app store market.

Amazon is incentived to run an Android app store now, in the same way Microsoft was incentivized to maintain an ARM build of Windows: it's not a corporate priority, because it doesn't make business sense for it to be until the playing field changes.

> Appoogle

I did a search on Google and nothing really came up. Did you just invent the term? I love the name. It might end up in Main Stream Media soon.

Well glad we live in a country with laws and not a pseudo-libertarian "all governance by consumer choice" world.

Regardless of what you think "should" happen, the reality is that you massively understated the scope of the applicable law.

> a company that is competing like hell

The problem is when by "competing like hell", you compete so hard that you suppress your competition. The issue that anti-competition laws seek to redress is the suppression of other competition.

I don't think that's a fair assessment at all. Both Google and, especially, Apple have spent millions of dollars, hours, and effort to create their respective App Stores and the people and tools needed to run them. There's a reason why there's a difference, in the real world, between a Walmart and a Target or Sprouts. Likewise, there's a difference between Apple, Google, or anyone else's App Stores. The main difference being that Apple makes it easy and far less risky for customers to pay for what they're getting. Developers aren't buying into just the App Store, they're buying in to the whole group of customers that said App Store brings with them.

Except the competition isn’t suppressed, and there’s no actual monopoly here.

What we have is a pretty clear case of a minuscule minority of users bitterly complaining that a company isn’t making its products exactly the way they want them to.

A store is allowed to charge what it wants for its products. A store is allowed to set the policies that it wants for the goods that it sells in its own stores.

It just so happens that Apple’s customers absolutely love its products, and that Apple’s products are absolute technological leaders in their space.

Apple didn’t get there, e.g. like Facebook by buying up the competition any time it started to emerge as a threat. They got there through decades of focused development and investment.

replace 'apple' with 'standard oil', 'iphone' with 'kerosene' and '2020' with '1900'.

How about Gopple?

Amazon made a bunch of poorly performing and uncompetitive Android phones, and then bailed before doing the hard work of actually differentiating their product. The results are totally expected and if anything demonstrate the market is competitive, not anti-competitive.

Users don’t want an “alternative App Store market”. They want a place where they know the apps they download won’t steal their data or crash their device, where the billing policies are clear and predictable, where you can set parental controls and get refunds on accidental purchases.

Apple doesn’t have customers because they are the only one who you can buy water, electricity, or internet from at your home address. Apple has customers because people willingly and happily shovel their hard-earned money at them because their products are freaking amazing.

In no universe can anyone say that the progression / advancement of smartphones and smartphone applications indicates a stagnant market or one in need of forced government intervention.

From what I can see iPhone 1 with its 400MHz Samsung CPU and 320x480 display and its half dozen apps -> iPhone 12 with its 8 core 3GHz A14, 2532x1170 display, and millions of apps demonstrates conclusively that consumers are winning out tremendously over the last 13 years due to a highly competitive market driving truly massive R&D investment in this space.

I think the problem that people actually have with Apple is that they are so far ahead of the pack, and people don’t see where the inevitable disruption is going to come from just yet.

> A store is allowed to charge what it wants for its products. A store is allowed to set the policies that it wants for the goods that it sells in its own stores.

A store is allowed to block you from using any other store? These aren't natural continuations or logical extensions of meatspace, stop pretending they are.

> Both Google and, especially, Apple have spent millions of dollars, hours, and effort to create their respective App Stores and the people and tools needed to run them.

Google and Apple spent Millions 'claiming' Patents/IP, monopolizing new discoveries, and 'earning' Billions.

"Place Silicon Valley in its proper historical context and you see that, despite its mythology, it’s far from unique. Rather, it fits into a pattern of rapid technological change which has shaped recent centuries. In this case, advances in information technology have unleashed a wave of new capabilities. Just as the internal combustion engine and the growth of the railroads created Rockefeller, and the telecommunications boom created AT&T, this breakthrough enabled a few well-placed corporations to reap the rewards. By capitalising on network effects, early mover advantage, and near-zero marginal costs of production, they have positioned themselves as gateways to information, giving them the power to extract rent from every transaction.

Undergirding this state of affairs is a set of intellectual property rights explicitly designed to favour corporations. This system — the flip side of globalisation — is propagated by various trade agreements and global institutions at the behest of the nation states who benefit from it the most. It’s no accident that Silicon Valley is a uniquely American phenomenon; not only does it owe its success to the United States’ exceptionally high defence spending — the source of its research funding and foundational technological breakthroughs — that very military might is itself what implicitly secures the intellectual property regime." [1]

[1] https://tribunemag.co.uk/2019/01/abolish-silicon-valley

What would be the hypothetical characteristics of an anti-competitive app store market, to you?

I.e. what would you look at and say "That's anti-competitive"?

This is literally not what’s happening. The iPhone is their product. If you don’t want to use their products and their store you do not have to. Buy a different device. There are plenty.

Apple doesn’t get to tell Google, Samsung, Huawei, LG, OnePlus, Fairphone, etc. how to build their devices.

The one device they do get to decide how it works is the iPhone. Because they created it, they own it, and they get to decide its future.

Their device, their decision. The consumer gets to decide if they like it or not. Overwhelmingly, they decide that they do.

I tried both ways, but decided that one didn’t quite trip off the tongue as well :)

I came up with it on the fly, but it was inspired by FAANG & similar terms. Surprised it’s that unique tbh!

> they're buying in to the whole group of customers that said App Store brings with them.

Isn't that what a duopoly is, by definition?

> Both Google and, especially, Apple have spent millions of dollars, hours, and effort to create their respective App Stores and the people and tools needed to run them

Both Google and especially Apple have also spent millions of resources and money, making sure they are the only app store in use (by default).

They could have spent some of those millions creating a set of rules for independent app marketplaces to be able to distribute content on their platform instead of locking everyone in to theirs'.

You're making normative claims as if they are "the way things are."

Maybe the above is how you think things ought to be (I disagree), but anti-trust jurisprudence does not agree with your pseudo-libertarian worldview.

Absolutely. Anti-competitive laws aren't intended to prevent current market share, but rather level competition for future market share.

If Google has 99% current market share for mobile OS, props to them. They deserve it for working like heck, delivering something amazing, and finding a model that allows them to distribute for free.

If Google has 99% market share, and ensures it keeps 99% market share in the future by setting up licensing deals to tie Google Apps + App Store together... that deserves a lot more scrutiny.

> Hard to fault a business

What? If a business is causing a large negative externality, that's a bad thing.

Just because you can't "fault" people for pursuing profit doesn't mean they should be allowed to do it any way possible?

I just really don't understand this worldview.

There's almost a infinite number of things they could do that would be illegal that you might also call 'anti-competitive'.

IMO, as long as there are viable competitors to Apple, and as long as Apple is not colluding with its competitors, Apple should be able to implement any lawful policy on its own device that it chooses.

Apple can't violate its existing contracts with its customers or developers (e.g. threatening to kick off all Unreal Engine apps, e.g. lock customer data unless a ransom is paid). Apple can't use App Store policy to commit crimes, like extortion (e.g. offering to buy an app developer, and saying they will ban them from the store or increase their commissions to 50% if they don't accept the buyout).

As long as their policies have a justifiable and legal business purpose (whether you personally agree with the policy is irrelevant) that's applied consistently (within human limits of consistency) they should be free to make their own product however they want, and charge what they want for it.

>Both Apple and Google are fully within their rights

Who defines what those rights are? I don't agree with this dictatorial definition of rights. This mindset needs to change.

I don't want Microsoft "owning" Windows and banning Firefox and Chrome because its their "right".

You haven't answered the question and I was interested in the answer too.

What would one or both of these stores need to do, to qualify as 'anti-competitive' to you?

> creating a set of rules for independent app marketplaces

How is this any different?

> Another way is that they'd be spending even more if there were more healthy competition in the alternative app store market.

This simply isn't true. Android is much more open yet app spend is way lower compared to the smaller marketshare iPhone.

An open app market means a flood of free apps which means less money spent. Good Devs will absolutely lose in this scenario. Outsourced sweatshop devs will do everything cheaper.

Apple takes some yearly fees from developers though, that's nearly a platform tax for Mac os.

If there was competition in the App Store market, I’d have to deal with the overhead of dealing with publishing companies.

My apps would have to be designed to comply with all of the rules of all of the stores.

No thanks.

You can't implement background installation of apps, automatic upgrading, or batch installation or upgrades of apps on Android outside of the Play Store. The competition is intentionally hobbled.

If we look at market share for mobile app distribution, the vast, vast majority of it goes to the App Store and the Play Store. The competition isn't even a blip on the radar.

This implies - of course - that they will allow other app marketplaces to begin with.

Was referring to they = Google, spend = Google's funding of Play Store development and infrastructure (in context to parent's comment)

Maybe we can both at least agree the normative claims I’m making are true absent a monopoly finding.

Anti-trust only applies if there’s a finding that Apple is a monopoly. The jury, so to speak, is still out.

If Apple was found to be a monopoly, then there may need to be some restrictions placed on how they operate.

But I think controlling how your own product works is the presumed default, even if that product is wildly successful, as long as that success is through actual product merit, and not done deceptively or through illegal collusion.

> Both Apple and Google are fully within their rights to charge whatever they want

They are within their right to charge what they want. But it is anti-competitive for them to use significant market power to leverage themselves in other markets.

The lawsuit is not about the 30% cut. Instead, the anti-competitive behavior is that Apple prevent competing Apple stores using its significant market power.

Thats how anti-trust law works.

> Anti-trust only applies if there’s a finding that Apple is a monopoly. The jury, so to speak, is still out.

Wrong again, you can violate anti-competition law without being a monopoly. You're correct that it hasn't been decided in a court of law.

I'm saying that I think they are engaging in anti-competitive behavior, you are saying "actually it is okay because they haven't been judged to engage in anti-competitive behavior in a court of law", which does not seem contrary to my claim, which is that I think they should be judged to engage in anti-competitive behavior.

> The iPhone is their product.

The same exact argument could be used regarding the desktop PC.

Do you think that microsoft could prevent competing web browser from being installed on the PC, if it choose to do so?

I think not. They would lose that anti-trust lawsuit.

> Because they created it, they own it, and they get to decide its future.

No, actually they dont get to decide that. If they are breaking anti-trust law, via anti-competitive behavior, then there are certain actions that they cannot do.

> The consumer gets to decide if they like it or not.

The consumers, or other companies, can also sue them for breaking anti-trust law, which Apple is required by law to follow.

That’s not what I’m saying.

The case law on this is not as definitive as you are claiming. I don’t think their behavior is illegally anti-competitive.

Sure, you can say that not supporting a specific 3rd party application (e.g. an App Store) on your device is “anti-competitive” but obviously not illegally so for any business.

Behavior which is totally legal can become illegal in a monopoly situation.

Decouple payments/subscriptions from distribution (AppStore). Allow us to pay using Stripe, PayPal, Amazon Payments, Google Pay, Apple Pay, or any of a host of other payment processors: the developer can choose his own payment platform, just like in the rest of the world outside of the iPhone.

That's a good first step towards competition that would allow Apple to keep the AppStore exclusivity -- for now.

Dude, you're the one who said

> Their device, their decision. The consumer gets to decide if they like it or not.

and now you're telling me that the case law isn't definitive?

That's my whole point - you're making strong assertions as if they are the way the law works, when they are just your personal opinion on how things ought to work. Numerous decisions in the past have required companies to change how they do things on their devices. I'm not saying the case will be decided against Apple.

I love how we suddenly have better ideas for how the most successful public company should allocate their resources to serve their customers (developers are second tier, sorry). We sometimes forget they are sitting on mountains of money because they execute good company decision making, not because they are doing weird things to protect a monopoly. Like there is some meeting near the top between execs happening where someone goes "lets do X!" and another exec replies "no but doing X would harm our monopoly, we cant' do that". Do people think decisions are really being actively made to protect a monopoly?

> Their device, their decision.

Once I buy an iPhone, I own it and it is my device.

The point is that Apple and Google have used their market power in other verticals (hardware, services) to lock all other competitors out of the mobile app distribution market. They are acting as private regulators of who can publish a mobile app, which is unacceptable if we still claim to support competitive, public markets.

How would a consumer even know if they were happy given the lack of options? Are they actually happy, or do they just have bigger issues to worry about? That's why we hire experts to act as regulators for new industries.

With this rationale no monopoly should ever be investigated, broken up, etc.

The whole problem with monopolies is that they actually harm the consumer by protecting their monopoly from encroachment by someone else. So yes people really think decisions are being made by a monopoly to protect their monopoly (and their profits). A chunk of those billions they have is actually money generated by these monopolistic practices.

It's juvenile to imagine them sitting at board meeting and discussing "How can we protect our monopoly?", that's like saying the NSA is discussing by board meetings "how can we further invade everyones privacy?". But they most definitely are discussing how they can protect their market share and how to edge out competition.

Apple does not allow third party app stores on iOS. There's at least one third party store that you can side-load using developer tools but it's definitely not something the average user is aware of.

> which both charge 30%

Well, not anymore they don't.

Kind of undermines your cartel argument, if you think about it. Clever on Apple's part...

Owning the atoms is less consequential than you infer. You don’t “own” the operating system software loaded on it, it’s only licensed to you.

So what? I’d you dont want it, don’t pay for it.

I am sure they do discuss those things. This is why Google has onboarding training around not framing any communication around competition. The optimist in me says this is actually to help infuse a culture of good decision making and trying to combat this kind of monopolistic thinking. I guess there is another side to this that is not so good natured. I guess this is an argument around intent. Are they actually trying to be good, or hide evidence of being bad, by the highest level of these companies?

It comes down to what you mean by anti-competitive. If you mean illegally anti-competitive then there’s a debate to be had. If you mean “anti-competitive” in the sense that they don’t offer their entire code base MIT licensed, then 100% they are anti-competitive in that sense, and they have every right to choose to be.

To somewhat oversimplify, you are allowed to not invite competitors to sell to your customers in your own backyard. Unless you are a monopoly. Because then that “backyard” isn’t rightfully yours to control.

At the moment I am inclined to believe the iPhone is Apple’s own backyard and they should have dominion over what happens there.

If you want to confiscate Apple’s backyard, you do it at the risk that you damage a company that has done a great service for the world, and a company that IMO deserves the benefit of controlling its own destiny and should be left to continue innovating on its own terms.

If someone thinks they can do better then there’s trillions of dollars in market cap on the line and I welcome them to try. Apple won’t stop them from trying, but will certainly compete fiercely on the merits.

At the very least, they would need to decouple the payment processor in a way that still provides the user all of the following;

  1) No need to re-enter billing information across apps
  2) A centralized UI for the user to manage all their
     subscriptions, enforce consistent billing policies,
     request refunds, etc. 
  3) Enforce parental controls and family approval 
     policies which may be configured on the account
  4) Prevent any surprise billings or unauthorized charges
  5) Ability for Apple to force a refund even if the app dev won't

And probably many more technical measures. Otherwise, you are directly damaging a key value proposition provided by Apple and demanded by their users.

In the end, the payment processor is a red herring. Apple isn't charging 30% for the payment processing -- they probably pay less to run the charge than Stripe does. For example, for $0.99 charges, the app developer pays Apple less for their entire fee than Stripe would charge them just to run charge.

The 30% fee is Apple's share for creating the entire ecosystem. Everything from the programming language, the platform, the API's, the security framework / secure enclave, the app review, the distribution model, the billing system, the cloud services for software delivery/push notifications/updates/shared storage, all the way up to Apple's customer support lines. Actually running the payment gateway is perhaps the very least of it.

> In the end, the payment processor is a red herring.

Not in the context of introducing competition.

You're missing the point. Apple doesn't want independent App Stores because that's not what their customers want. Their customers want a simple way to install apps that they can trust and to pay for things in a way that they can trust. Independent app marketplaces are anathema to that.

No, because there are other alternatives. The App Stores in these cases aren't considered their own market segments because they rely on the purchase of device to access them. Those devices are available from a large number of providers. Don't like Apple? Get an Android phone from any number of providers. Don't like the service? Switch to another carrier. Until the law changes to a point where companies have to allow other people to dictate their platforms (which will never happen), a company can do whatever it wants so long as it doesn't prevent a competitor from spinning up their own version.