On Monday, Apple will get its chance to stand before the highest court in the United States and argue a case that’s been grinding forward for seven years. The case involves Apple’s right to insist that all apps on its iOS mobile operating system be sold through its own App Store. While many people see the App Store as a form of monopoly, it also has a lot of benefits, so what’s the best way this could turn out for users?
The frustrating thing about the case, dubbed Pepper v. Apple Inc, is that it will not definitively decide whether the App Store functions as a monopoly. The lawsuit started back in 2011, and it’s so old it included a complaint against Apple’s deal to exclusively offer the iPhone to AT&T customers in the US.
Robert Pepper and three other Apple users claimed only offering the phone on one network and forbidding third-party apps harmed competition and amounted to an antitrust violation. Pepper and co. argue apps would be cheaper if a competing iOS marketplace existed.
We’ve previously broken down the twists and turns the case has taken, but the most important thing to know is that the Supreme Court will soon decide if the plaintiffs have the right to even bring this lawsuit against Apple.
Apple has previously argued cases like Illinois Brick and Hanover Shoe have set a precedent in which it would not be considered the proper target of this lawsuit. Those cases found that in an antitrust suit, a plaintiff must be a “direct purchaser” from the defendant.
Apple sees its business model as selling users a device and giving developers access to that device — the access just happens to come with 30 per cent commission for Apple on any profits that the developer pulls in. Apple is basically saying that if these users have a complaint about the price of an app, they should take it up with the developer. The plaintiff is arguing that developers across the board are factoring Apple’s fee into an app’s price and passing it on to the customer.
Pepper’s case further argued that Apple “controls all aspects of the sale of apps through the App Store, including the prices at and terms on which apps are sold,” the latter point is reinforced by the company’s requirement that all prices end with 99 cents. The Ninth Circuit court of appeals decided that Apple is indeed the one who’s selling directly to the customer, and now its time for the Supreme Court to give its opinion.
But first, it’s time to give our opinion — not from a legal perspective, but from a user’s point of view.
There’s no telling how this court will view this particular case, and it’s anyone’s guess what obscure legal theory could get pulled into the final opinion. But as far as the core issue goes, it seems perfectly reasonable to treat Apple as a direct seller to users because they have no other options for purchasing apps. If there’s a systemic issue with a digital marketplace’s competitive practices, it seems absurd for courts to expect users to sue every vendor individually.
As far as the marketplace’s facing liability for the behaviour of individual vendors, the courts are perfectly capable of making judgement calls about what would and wouldn’t be appropriate.
The bigger question is whether Apple should have its walled garden in the first place. If Pepper’s case is allowed to go forward and wins, there are several outcomes we could see. The plaintiffs believe that Apple has charged users “hundreds of millions of dollars more” for apps than they would have if a proper competitor existed, and they’re asking the courts to order the company to pay that money back.
No, that doesn’t mean you’ll be getting a windfall just because you spent a couple of bucks on Stardew Valley. But it seems at least plausible that Apple would open up its system to third-party app stores, thrusting us into a whole new era for one of the world’s most tight-fisted companies.
Generally, in technology, the correct guiding ethos is that you should be able to do what you want on the device you own, and if you want to buy an app from NigerianPrince69 on the dark web that’s your God-given right. And many people think that should apply to iOS as much as anything else. But gosh darn it, Apple’s walled garden is good.
Back when the iOS and the App Store were new, fears ran rampant that Apple would start to apply the same system to its laptops and desktops. It hasn’t, but if it did, I would totally flip out. I personally use a Windows desktop, and I’d still flip out.
There’s just something about that space that should not be violated by any PC manufacturer trying to dictate what can and can’t be installed. But now that we’ve seen how it’s played out over the past decade, I’m fine with mobile working differently.
Apple already has a viable competitor: Android. And anyone is free to jump into that ecosystem instead. You can find most of Apple’s app offerings (or a clone) on the Android platform. You can also find shit tons of malware and a bunch of low-rent crap on Google’s open-source alternative. On Tuesday, we saw that half a million Android users were, once again, tricked into downloading malware from the Google Play store — something that happens all the time.
We’ve seen Apple’s store deal with some malware problems of its own, but the number of cases is a fraction of the incidents that have affected Android users. Google simply isn’t as good at curating and screening apps in its official store as Apple is, and alternative app markets for Android are even more dangerous.
The bottom line is that either outcome, in this case, will probably work out fine for consumers. The argument that the price of apps would go down if an alternative market existed for iOS rings true, and having options is great. Apple would also likely double-down on its efforts to make the App Store the safest place to shop, with the best selection. It might even be willing to negotiate how much of a cut it takes from developers.
But I would argue that we’re better off with the current system. People should theoretically have the option of carrying around a malware-ridden device if they want; the problem is, bad security makes us all less safe. Cheap Internet of Things devices like connected security cameras and smart bulbs are often highly vulnerable to hackers who like to use them for staging DDoS attacks and laundering IP addresses.
A single hacker can commandeer hundreds of thousands of devices at a time and launch a range of attacks, as we saw with the Mirai botnet that took down a huge chunk of the internet in 2016. Apple has sold more than 1 billion iPhones, and opening them up to more vulnerabilities creates a massive new attack surface.
Whatever happens, we won’t be seeing any major changes any time soon. More than ever, Apple has come to rely on its “services” business, which brought in $US10 ($14) billion last quarter alone.
This case has gone on forever already, and if the plaintiffs win the right to bring an antitrust suit against Apple, the company’s lawyers will certainly drag it out as long as possible.