Early thoughts on United States vs. Apple

I’m reading through the lawsuit document intro and skimming the rest. I only have strong opinions about the App Store and developer aspects of the case. Some of the arguments in the case about messaging apps and watches seem more flimsy to me, but perhaps good things will come from the broader scope.

Here’s a small section about the App Store:

Rather than respond to competitive threats by offering lower smartphone prices to consumers or better monetization for developers, Apple would meet competitive threats by imposing a series of shapeshifting rules and restrictions in its App Store guidelines and developer agreements that would allow Apple to extract higher fees, thwart innovation, offer a less secure or degraded user experience, and throttle competitive alternatives.

This is basically true. I don’t think Apple is obligated to make iPhones less expensive, of course, but switching costs away from iOS are significant, for developers and users, helping maintain the status quo. Competition across iOS and Android platforms is important, but competition just within iOS is important too. My complaints have always been about Apple’s exclusive control over app distribution, regardless of Android.

An antitrust lawsuit is about size. The government isn’t suing game console makers even though they control game distribution (and charge too much to developers) because game consoles are not general-purpose computers, and they sell in a small fraction of the numbers that Apple sells smartphones. For many people, an iPhone is their best computer. The scale and impact to society is on a completely different level.

Even though there is a smartphone duopoly with iOS and Android, iOS alone reaches so many hundreds of millions of people that it is effectively a market on its own. If you want to build and distribute for the most commercially viable smartphone platform, you have no choice but to follow Apple’s rules. Until Apple lets developers route around that monopoly through external payments and sideloading, there will be pushback.

Apple leadership might still see the company as the upstart, but the rest of the world sees size and power. Apple should settle the lawsuit, accept App Store changes similar to those required by the Digital Markets Act, and move on. There is no winning this once the tide has turned against you.

Manton Reece @manton