Tech Roundup: Unpacking the Apple vs. Epic Games Trial

[A recurring feature on the latest in Science & Technology.]

• Apple argues that its iron grip over the App Store, the only way for consumers to install software on iPhones, is essential to meet security and privacy promises to its users, and an important distinguishing feature in a competitive market for smartphones; says macOS has "a level of malware on the Mac that we don't find acceptable" (as the OS allows users to download software from unauthorised third-party sources on the internet), adding side-loading apps on iOS would "dramatically" change security on iOS.
• While Apple's ongoing lawsuit Epic Games aims to probe whether the market for in-app purchases within the App Store is unfairly anti-competitive, and whether iOS itself is a monopoly that should be opened up to third-party app stores and side-loaded apps, the iPhone maker has repeatedly emphasised the need for protecting user safety and privacy as a means to justify its rigid app distribution model.
• It's not exactly a surprise that permitting third-party app stores and allowing apps to be side-loaded would fundamentally remake iOS as we know it. Over the years, app stores have become crucial, indispensable gatekeepers in accessing software that spans anything from reading books to shopping essentials, and from catching the latest movies to checking the weather. What's more, consumer spending on digital goods and services — in part to a major contribution from games — have exploded, with app developers also making money off mobile advertising. Interestingly, Apple doesn't take a cut from in-app ads.
• The biggest question is perhaps this: Is it permissible to let a private company dictate terms and decide what's good and bad over a platform that's slowly taking over the classic computer platform and used across hundreds of millions of devices? Can Apple set its own rules to satisfy customers (by offering a safe and secure environment) even if they disadvantage sellers?
• While the App Store helps bring an audience to third-party apps, should Apple continue to profit off it every time a customer makes an in-app purchase? Should the App Store could be considered an "essential facility" in that developers must use it to reach iOS users? Should Apple loosen up its mandatory in-app purchase clause and allow apps to point users to alternate and possibly cheaper methods of payment/subscription outside of Apple's ecosystem?
• It's worth pointing out that Apple's App Store guidelines bar companies from directing consumers to other ways to subscribe in their apps, or access deals and promotions, not to mention prohibit them from mentioning the fact that it collects a 30% cut of revenue. The provisions have prompted Netflix, Spotify and other app developers to entirely sidestep Apple's cut by shifting to selling subscriptions and downloads through their websites instead of their apps. Apple places none of these limits on its own Apple Music service, a direct rival to Spotify. And this isn't considering Cupertino's stance on cloud game streaming services that mandate every individual streaming game be submitted and listed individually on the App Store.
• Apple, however, has been bluntly against relaxing the so-called "anti-steering rules," arguing "if we allowed people to link out like that, we would in essence give up our total return on our [intellectual property]," while insisting that the 30% commission fees are "not a payment processing fee" but rather a way of "providing a return on investment" for the billions of dollars of research and development Apple makes on iPhone hardware and app development every year. "It would be akin to Best Buy advertising that you can go across the street to the Apple Store to buy an iPhone," CEO Tim Cook said.
• "We want them to undo the tying of their proprietary payment system to the App Store and all of the other anti-steering provisions, which is a fancy way of saying punishments and penalties that they've created for those people who do not want to use their proprietary payment system," Spotify chief legal officer Horacio Gutierrez said in an interview with The Verge, which is locked in a similar antitrust battle with Apple.
• What needs to be emphasised here is that the app store market is a two way street. Apple invented the iPhone, it brought the concept of an App Store to the mass market (and so it's entitled to monitise its intellectual property), but it's also the third-party developers who "provide substantial value" and made the platform what it is today.
• "The App Store is merely one platform's forced distribution gateway, 'facilitating' the commerce no more and no less than a web browser, an ISP or cellular carrier, a server-hosting company, or a credit-card processor," iOS developer Marco Arment said. "For Apple to continue to claim otherwise is beyond insulting, and borders on delusion."
• A second issue that keeps popping up is the "severely limited" ability for progressive web apps (PWAs) to look, feel, and perform as well as native apps on iOS, raising suspicions that Apple is going out of its way to deliberately delay adding features that make PWAs better (among other numerous web standards) to WebKit as a way to drive users to the App Store instead. This is also compounded by another of Apple's policy that forbids alternative browser engines on iOS. Google Chrome, Edge, Opera, Firefox, Brave, DuckDuckGo, and pretty much every single browser downloaded from the App Store are simply re-skinned versions running atop Apple's WebKit engine.
• That Apple is essentially willing throw Mac security under the bus to protect the iPhone shows how badly the company intends to maintain the status quo at all costs and not open up iOS to third-party apps stores or substitute payment methods. In trying to establish that the App Store can't be separated from the iPhone itself, Apple has the unenviable task of allowing competition while defend locking it down.
• Ultimately, the entire case hinges on what actually constitutes a "marketplace." Market definition is the pivot around which antitrust trials revolve because it determines whether defendants actually have a monopoly. If the App Store can be considered as a vital app distribution market in the mobile (specifically iOS) landscape, Apple's refusal to allow any apps that aren't in the app store on the iPhone and the requirement that in-app transactions for digital goods must use Apple's payment processing system is unquestionably monopolistic. But if the market can be established as the entire gaming market, which also includes rivals like Sony PlayStation and Xbox, then the App Store is just one of many digital marketplaces and, in that context, it's clear Apple doesn't have a monopoly. No matter who wins, the verdict will set the stage for future antitrust battles.
• China bans financial institutions and payment companies from providing services related to cryptocurrency transactions, such as registration, trading, clearing and settlement, and announces plans to crack down on bitcoin mining, as part of ongoing efforts to prevent speculative and financial risks, sending price of bitcoin down to US$ 32,601 and leading cryptocurrency mining operators, including a Huobi Mall and BTC.TOP, to suspend their China operations. (Bitcoin price soared to hit an all-time-high of US$ 64,895.22 on April 14.)
• Music streaming service Spotify adds offline playback for playlists, albums, and podcasts on Apple Watch for Premium subscribers; available on Watch Series 3 running WatchOS 6 and up.
• Twitter to let U.S. users with more than 1,000 followers who've hosted three Spaces in the past 30 days apply to host Ticketed Spaces, with the company taking a 20% cut.
• Netflix is reportedly looking to hire an executive to oversee an expansion into video games, as it considers options including an Apple Arcade-like games bundle.
• Apple walks back on its earlier statement to clarify that HomePod and HomePod mini will gain native support for lossless audio in Apple Music via a future software update (when the update will be released is anybody's guess); also notes