Apple under increasing monopoly pressure over App Store

Gadget giant Apple has caused a controversy by rejecting a premium email app unless it charges for subscriptions through the App Store, thus giving Apple a 30% piece of the action.

The precise origins of this story are somewhat convoluted, so we direct you to Protocol and The Verge for comprehensive background. The long and short of it seems to be that a new premium email app call Hey has been rejected from the Apple App store, because its subscription fee is not paid via Apple’s payment platform.

In this respect Hey is no different from the Apple Netflix app, for example, which allows users to access content from a subscription service they pay for outside of the App Store. However Apple sees this differently and cites arcane passages of its terms and conditions as justification. It looks like the only remedies available to the developers of Hey is to either offer it for free, or give Apple its pound of flesh.

At another time this may just have been a relatively niche tech story that Apple could have just waited to blow over, but it coincides with significantly increased political scrutiny of Big Tech. Specifically lawmakers and regulators are increasingly concerned that massive internet companies like Apple, Google and Amazon are using their dominance to restrict competition.

Only this week, the EU opened an investigation specifically into suspected antitrust activities by Apple around its App Store, so they must be delighted by the fresh evidence Apple has sportingly served up. Meanwhile barely a week goes by without one of the internet giants being investigated for using its dominance in one sector, such as smartphones, to restrict completion in others, such as digital commerce.

“Because of the market power that Apple has, it is charging exorbitant rents — highway robbery, basically — bullying people to pay 30 percent or denying access to their market,” said US Congressman David Cicilline in an interview with The Verge. “It’s crushing small developers who simply can’t survive with those kinds of payments. If there were real competition in this marketplace, this wouldn’t happen.”

As ever Apple can, in principle, do what it wants with its own platforms. There is competition in the form of Android, but Apple still has around half of the market, so being kicked off its App Store is a fairly major disadvantage. This is what many people fail to understand about regulation; monopolies are bad, no matter how they have been achieved, and one consequence of becoming a monopoly is that a new set of restrictions are, quite rightly, applied to your activities.