Are You Trembling In Your Boots About What Life in the Mobile Market Looks Like After Apple Releases Its Death Grip on App Developers?
Andrew Ellenberg
Award-winning creative and marketing director. Strategic planning, product development, ecosystem alliances. Nationally recognized business intelligence analyst. Prolific journalist. Public speaker. Visionary leader.
Apple warns that a full-scale Apocalypse is imminent once it releases developers into the wild. The world's first three trillion company has long positioned itself as being a responsible steward of its global user base.?
In a speech to the International Association, Apple CEO Tim Cook said, "If we are forced to let unvetted apps onto iPhone, the unintended consequences will be profound."
It argues that its restrictive platform policies and tight control of app makers ensure that it releases only the most trustworthy software.?
But the app makers see it differently. They believe the restricted access to its platform is motivated by a relentless hunger for total control over half the mobile market.
Consumers loyal to the Apple brand because they believe it is socially conscious and stands for something more significant than its profit mission could take a substantial hit as consumers turn to alternatives and vote with their wallets.
But win or lose, in the court of public opinion, lawsuits like this make Apple look like a Cartel controlling the supply of drugs to its users. Its competitive position allows it to extract exorbitant fees from its app developers because when Apple cuts off distribution more than 50 percent of their profits will vanish.
Epic Games filed the first significant case. The maker of the hit video game Fortnite accused Apple of breaking antitrust laws when it brutally yanked the game from its App Store.
Although Apple essentially won that lawsuit when the judge declared that Apple was not acting like a monopolist, the court did side with the Fortnite maker on Apple's anti-steering policies, its primary weapon of mass domination.?
These anti-steering rules prohibit app developers from linking to external websites where users can purchase items without using the App Store payments system and forking over Apple’s hefty chunk of revenues.
Like missiles in the water from a nuclear submarine, more lawsuits accusing Apple of leveraging its App Store to give its proprietary apps an unfair advantage are on the way.??
A group of consumers filed a creative class-action suit claiming the iPhone maker's thirty percent commission on in-app purchases constitutes an illegal “tax” on consumers. The argument is a bit of a stretch but interesting.?
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Apple is not alone. These are just the first cases in what is likely to be a long battle over the role of tech giants in the economy. Big Tech has become so powerful that the competitive landscape operates against innovative new players.?
Take Google’s $2.1 billion acquisition of Fitbit. The deal has raised eyebrows because of potential anti-competitive behavior. Google already dominates the digital advertising market, a classic fox watching the henhouse scenario.
It will leverage Fitbit’s data to gain an even more intimate understanding of users' behaviors and preferences, giving it a massive competitive advantage. This strategy allows it to expand its business into areas related to, but outside of its core product or service. Do you think advertisers care? When you shop for paper, do you refuse to buy from a supplier because they own forests??
The goal of vertical integration is to increase market share and profits by cutting out the middleman, but then again, isn't that the point? As far as shareholders are concerned, if minting more billions makes Google bad, they don't want it to be good.
The U.S. Department of Justice is investigating whether Google violated antitrust law by using its dominance in online search to stifle competition. And the European Union is up in its grill too.?
Amazon's price-fixing with vendors selling outside of its marketplace was booted out of court for now. Still, it's difficult to argue that it didn't operate like a monopolist to protect its price advantages on competitors' marketplaces.?
Maybe the government should step in and break up these Big Tech companies. Good luck with that. Another is for consumers to start using alternatives to the Big Tech monopoly. Uh, huh.?
Try DuckDuckGo, a search engine that doesn’t track your searches and sell your data to advertisers. There are alternatives to Google’s Android operating system, such as the privacy-focused /e/OS. Check out the social network MeWe, the search engine Startpage, and the privacy-focused web browser Brave. Are we going to switch? Not a snowball’s chance in hell.?
The digital marketplace is so intensely competitive that free-market forces will likely prevail without government interference. After putting Netscape out of business by forcing PC manufacturers to bundle its IE browser on all their machines, Microsoft was pushed out of the search engine market by Google.??
There are no poodles in the jungle.