Developers sue Apple over App Store practices

[xeni]

Originally published at: https://boingboing.net/2019/06/04/developers-sue-apple-over-app.html

The lawsuit seeks ‘fairer profit, for developers’ digital products.’

[Headache]

Good luck! If they win, then I think it will also result in Sony, Microsoft, and Nintendo needing to open up their process for getting published on video game consoles.

[gracchus]

Apple may pay the price for its greedy control-freak ways after the lawsuit. Of course, any settlement over $999 will now be denominated in monitor stands, so…

[thatspecial]

'“This practice is analogous to a monopsonist retailer paying artificially low wholesale prices to its suppliers,” the developers said in their suit. ’

Except Apple isn’t the single buyer in a market, of any boundary. It isn’t even the leading buyer. That would be the Android platform.
It isn’t buying products under a wholesale model. It doesn’t buy X number of applications for one price then sell them at another. It is a concession model.
The 30% seemed to be important on the other lawsuit as well. 30% is the same as Steam and is the average. I assume the suit will also go after every other online store, all retail stores and of course the whole of the recording industry.

[Pensketch]

In thinking about how many digital products I “own” but don’t really own, including apps and software from Apple, digital downloads from Sony and Nintendo, digital DRM’ed movies, tv shows, etc… I’m beginning to see some of the appeal of becoming a luddite. Just… throw my hands up and walk away; after I google what kinds of tree bark and weeds are safe to eat, of course, since without this complicated crap in my life I can’t do my job.

[morcheeba]

Yep. And before Apple the apps on phones were extremely limited and controlled by the carriers. For example, Verizon forced NFL to be exclusive to them. You couldn’t make a better map app because the carriers had their own and charged for it.

[Headache]

It wasn’t that long ago that people were buying $3 ringtones. Has that business gone away?

[gatto]

@Headache

Good luck! If they win, then I think it will also result in Sony, Microsoft, and Nintendo needing to open up their process for getting published on video game consoles.

they publish and they charge for the privilege and they sell games for their platforms but they don’t fix prices and there are other routes to buy games then the platform stores.

not that open publishing wouldn’t be great - but the situation isn’t exactly the same.

( they also provide significant support in exchange for the money they charge. something that apple doesn’t provide. )

@thatspecial

Except Apple isn’t the single buyer in a market, of any boundary

it costs time and money first to make an app run on multiple platforms. and if you’re using iphone specific features, there may not even be an exact equivalent on android.

point being they do have competition but it’s not like you can just take any old android app and just run in on your iphone.

the iphone is still very much a walled garden and, if you want to reach those users, you have to pay apple’s tax.

@thatspecial

The 30% seemed to be important on the other lawsuit as well. 30% is the same as Steam

that’s uncoordinated price fixing in action. i forget who went first - apple i think. then everybody else says: huh, i can get away with that sort of completely unjustifiable pricing? sold!

it only works because of platform dominance. maybe epic’s store will help, but only if they open it to things other than unreal

[Headache]

@gatto

they publish and they charge for the privilege and they sell games for their platforms but they don’t fix prices and there are other routes to buy games then the platform stores.

The cryptographic signing makes the place of purchase irrelevant. Do you think anything would change if you Apple started taking the same apps you buy online and packaging them on USB keys that you could buy at Best Buy or GameStop?

Apple’s model at least allows a bunch of different business models including free, paid, and ad-supported. The consoles have one model: paid.

The app stores are a breath of fresh air compared with dealing with Sony et al.

[L0ki]

Someone was reading Apple v. Pepper.

In that case Apple was specifically arguing that the consumers had no standing to sue. If anyone did, it was the developers.

The dissenting opinion agreed with Apple on that. The majority agreed that the developers would also have standing. So in this, it’ll be hard for Apple to argue that the claim shouldn’t proceed on that basis.

None of that of course says anything about whether Apple is in fact a monopoly or monopsony.

But these proceedings will make for a fun time:

From the dissent:

If, as plaintiffs contend, Apple’s 30% commission is a monopolistic overcharge, then the app developers have a claim against Apple to recover whatever portion of the commission they did not pass on to consumers. Before today, Hanover Shoe would have prevented Apple from reducing its liability to the developers by arguing that they had passed on the overcharge to consumers. But the Court’s holding that Illinois Brick doesn’t govern this situation surely must mean Hanover Shoe doesn’t either. So courts will have to divvy up the commissions Apple collected between the developers and the
consumers. To do that, they’ll have to figure out which party bore what portion of the overcharge in every purchase. And if the developers bring suit separately from the consumers, Apple might be at risk of duplicative damages awards totaling more than the full amount it collected in commissions. To avoid that possibility, it may turn out that the developers are necessary parties who will have to be joined in the plaintiffs’ lawsuit. See Fed. Rule Civ. Proc. 19(a)(1)(B); Illinois Brick, 431 U. S., at 739 (explaining that “[t]hese absent potential claimants would seem to fit the classic definition of ‘necessary parties,’ for purposes of compulsory joinder”).3
——————
3The Court denies that allowing both consumers and developers to sue over the same allegedly unlawful commission will “result in ‘conflicting claims to a common fund’ ” as Illinois Brick feared. Ante, at 12. But Apple charged only one commission on each sale. So even assuming for argument’s sake that the 30% commission was entirely illegal,
Apple can only be required to pay out in damages, at most, the full amount it received in commissions. To their credit, even plaintiffs have conceded as much, acknowledging that because “there is only one 30% markup,” any claim by the developers against Apple would necessarily be seeking “a piece of the same 30% pie.” Brief in Opposition 12. It’s a mystery why the Court refuses to accept that sensible concession.

The majority said this:

It is true that Apple’s alleged anticompetitive conduct may leave Apple subject to multiple suits by different plaintiffs. But Illinois Brick did not purport to bar
multiple liability that is unrelated to passing an overcharge down a chain of distribution. Basic antitrust law tells us that the “mere fact that an antitrust violation produces two different classes of victims hardly entails that their injuries are duplicative of one another.” 2A Areeda & Hovenkamp ¶339d, at 136. Multiple suits are not atypical when the intermediary in a distribution chain is a bottleneck monopolist or monopsonist (or both) between the manufacturer on the one end and the consumer on the other end. A retailer who is both a monopolist and a monopsonist may be liable to different classes of plaintiffs—both to downstream consumers and to upstream suppliers—when the retailer’s unlawful conduct affects both the downstream and upstream markets.
Here, some downstream iPhone consumers have sued Apple on a monopoly theory. And it could be that some upstream app developers will also sue Apple on a monopsony theory. In this instance, the two suits would rely on fundamentally different theories of harm and would not assert dueling claims to a “common fund,” as that term was used in Illinois Brick. The consumers seek damages based on the difference between the price they paid and the competitive price. The app developers would seek lost profits that they could have earned in a competitive retail market. Illinois Brick does not bar either category of suit.

Rather conflicting views there.

[gatto]

@Headache

The cryptographic signing makes the place of purchase irrelevant. Do you think anything would change if you Apple started taking the same apps you buy online and packaging them on USB keys that you could buy at Best Buy or GameStop?

that’s a good point. the key to walling is in the signing and the not allowing other people or vendors to sign.

there’d be no benefit to apple for allowing others to sign there own keys. which is totally the point.

ios runs on general purpose devices but they can’t be used in a general purpose way.

@Headache

The app stores are a breath of fresh air compared with dealing with Sony et al.

to each their own. to me it seems that’s because they do next to nothing for the price they charge. sony and ms at least give developers feedback and fully test games before publication. they used to be more strict, and nintendo still is. ( which is why games on nintendo’s platforms are so often rock solid. )

apple wants to play like they are a cultivated garden - but really they let almost anything by for the money. plus or minus their frequently arbitrary content standards.

as far as it seems to me, theyre basically taking a cut to take a cut. they certainly aren’t pricing their systems at cost (or loss) to recover the money in apps the way game consoles do

[Headache]

@gatto

they certainly aren’t pricing their systems at cost (or loss) to recover the money in apps the way game consoles do

You don’t have to do that when new games are often $50 or more. It’s a different story when games are normally under $5.

[gatto]

@Headache

You don’t have to do that when new games are often $50 or more. It’s a different story when games are normally under $5.

true true. which is why charging 30% is way too much.

( if they wanted to justify it by breaking down and presenting their costs… that might help. it’s pretty obvious tho it’s just a gigantic money grab. more than 11 billion a year according to forbes. )