2021 has already been rough for Apple because of the growing concerns around antitrust. Astropad’s CEO Matt Ronge recaps the recent antitrust news and how it affects third-party developers.
First, a quick recap of antitrust in 2020
In 2020, the House Antitrust Subcommittee released a series of recommendations on Big Tech and antitrust, some of which specifically targeted Apple. That’s how Astropad became involved in these antitrust concerns: After being outspoken about how we were sherlocked by Apple, we ended up speaking with the House committee as they were gathering evidence about how Apple has treated third-party devs.
March was particularly rough for Apple
In early March, a cascade of legal moves against Apple all happened in the span of a week:
- A bill passed in Arizona forcing Apple to allow alternate payment mechanisms for companies based on that state. (The Verge)
- The UK opened an investigation into Apple. (9to5 Mac)
- The EU announced that they completed their investigation, and will be bringing charges against Apple in the coming months. (9to5 Mac)
- The White House hired Timothy Wu, a Big Tech critic, as an advisor. (CNBC)
Apple is fighting these affronts tooth and nail, hiring a massive number of lobbyists to fight this legislation. From Apple’s perspective, it’s easy to understand why they’re putting up such a fight:
Asymco predicts that by 2024, services bring in $100 billion in revenue, worth 45% of Apple’s gross profit, with a large portion coming from the App Store.
Alternate payment mechanisms is a good place to start
From the developer perspective, I find the new legislation in Arizona particularly remarkable. The Arizona bill was based on a bill that was previously put forth in North Dakota, but was ultimately defeated after Apple ruthlessly threatened to pull the App Store from North Dakota (Matt Stoller). The North Dakota bill mandated that Apple allow alternate payment mechanisms AND alternate App Stores for iOS.
The Arizona bill was a bit watered down, and they removed the requirement for alternate App Stores. But still, it’s better than nothing! We believe that offering multiple payment options empowers consumers to choose the best system for their needs, which raises the standard for developers (including Apple) to create frictionless paywalls.
The bill still needs to be passed by the Arizona Senate and signed by their Governor, but this will embolden other states. Already, similar bills are popping up in Georgia, Hawaii, Illinois, and our home state of Minnesota (Politico).
Read: Dear Apple, Here’s How to Stop the Antitrust Investigations (A Five-Step Guide from the Developers You Sherlocked)
Apple can’t bully its way out of this one
The cracks in the armor have emerged. Apple is threatening to ban the App Store from states that pass similar bills, but I find that unlikely to happen. As a brand, Apple is terrified of bad PR. Can you imagine if they pulled App Store functionality or didn’t allow developers from a particular state to participate on the App Store? Consumers and lawmakers would be outraged. I think that Apple is just being a bully to intimidate, but there isn’t much weight behind its threats.
If more states like Arizona enact this legislation, I think Apple will handle it as a special case. This already happens today in other industries. For example, if you live in California, the law mandates that you can cancel your subscriptions online, without having to jump through any hoops (TechCrunch). For companies like the Wall Street Journal, they only allow online cancellation if your billing address is listed as California. If you’re a subscriber outside of California, you’re required to call to cancel. (Pro tip: Temporarily change your WSJ address to California so you can cancel online).
So Apple can treat this legislation as a special case for some time, but if enough states pass similar laws, Apple would be forced to allow alternate payment mechanisms everywhere. That would especially be the case if a few highly populated states passed the legislation, like Illinois, California, New York, etc.
The App Store (and how it treats developers) has a lot of room for improvement
I want to turn the volume up on this narrative within the developer community because I think the App Store ecosystem has a lot of room for improvement. A better ecosystem will not only help empower small developers, but it will give consumers a better App Store experience as well.
Quite frankly, I also want to stop the abusive tactics that Apple has used against its third-party developers. We’ve shared our story of being sherlocked, and privately I’ve heard of stories that are even worse — but circumstances prevent these folks from going public. What happened to Astropad is not an isolated incident.
If you’re an app developer, take action today
Although we still haven’t seen any sweeping change with the App Store, the cracks are slowly starting to appear. I strongly believe a future is coming where alternate payment mechanisms are going to be an option on the App Store. To take advantage of this, you’ll need an app that has in-app purchases or subscriptions. If you’ve been thinking of making the switch for your app, this is another reason why.
If you’re an app developer, contact your local government. For U.S.-based developers, reach out to your state reps and let them know you back this legislation and what it means for your business.
Find your state representative → house.gov