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Time for EU anti-trust regulators to chop Apple's phallus off?

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  • GoddersUK

    Or any other jurisdiction's regulators, for that matter.

    See: http://www.liveside.net/2012/12/11/does-skydrive-need-to-play-by-apples-rules/

    http://thenextweb.com/insider/2012/12/11/as-skydrive-balks-at-the-30-fee-third-party-developers-feel-the-heat-as-apple-blocks-apps-integrating-the-microsoft-service/

    http://www.theverge.com/2012/12/11/3753968/microsoft-apple-skydrive-discussions-ios-app-rumor

    I'm sorry, but there is no way that what Apple are doing can be construed as right. Not content with blocking the SkyDrive app Apple are blocking any 3rd party app that uses SkyDrive, since the sign in screen displays a sign up link. If you follow that link you could buy extra storage without Apple seeing a cut of that. This is despite the fact that the said transaction costs Apple nothing, Apple contribute to it in no meaningful way and, frankly, Apple deserve none of that money. They're simply exploiting their dominant position in the market to line their own pockets and point people towards their own services to the detriment of the consumer, the industry and even their own app ecosystem.

  • Blue Ink

    @GoddersUK: let's hope not.

    Much as I don't like Apple's behavior in this case, the iPhone does not constitute a monopoly. If you want to sell stuff on the AppStore, you have to abide to Apple's rules, including the 30% cut. If you don't like it, go elsewhere.

  • PaoloM

    @Blue Ink: yeah, the rules are pretty clear. Nobody forces anyone to be in any store, I'm sure the SkyDrive team can detect an ios browser and hide that link...

  • cheong

    @PaoloM:Yup. Microsoft could just markup the price by 30% to the button inside iPhone App, and mention that in the App. And offer original price at the website link that's easily accessible from SkyDrive Homepage.

    The users will understand as this is not the first time Apple has done this. Just make sure the note is verbose enough to users. 

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  • Ray7

    @GoddersUK:

    Point One: This will have nothing to do with EU regulators because Apple does not have a dominant position in the market.

    Point Two: Even if Apple did have a dominant position in the market, it still would not fall under the jurisdiction of the EU regulators because Apple makes the hardware and the software; it does not build software for OEM phones. Therefore, the market is not the iPhone; the iPhone is in the same market as Android, WinPhone etc...

    All MS has to do is what everyone else does: run the signup outside the Apple store.

    It will be interesting to see who blinks first. 

  • Ray7

    , cheong wrote

    @PaoloM:Yup. Microsoft could just markup the price by 30% to the button inside iPhone App, and mention that in the App. And offer original price at the website link that's easily accessible from SkyDrive Homepage.

    A cunning plan sir! 

    Unfortunately, it won't work.

    To begin with, the app store policy forbids linking or 'channeling' users to an outside location from inside an app. So MS cannot put a link in the app, or even tell users where to go.

    Secondly, the app store operates Apple's notorious 'most favoured nation' clause:

    https://developer.apple.com/appstore/in-app-purchase/subscriptions.html

    If you offer auto-renewable subscriptions, you can also use other methods to acquire digital subscribers outside of your app. You can sell digital subscriptions on your website or provide free access to content for existing subscribers. In these cases there is no revenue sharing since Apple was not involved in the transactions. Developers keep 100% of the revenue. If you would like to make a subscription offer outside of the app, the same (or better) subscription price must be offered inside the app for users who wish to subscribe from within the app. In addition, you may not provide links in your apps which allow the customer to purchase content or subscriptions outside of the app.

    I've highlighted the two relevant points:

    1/. If you sell the subscription from your website then Apple does not get a cut.

    2/. You cannot offer a cheaper subscription than the one offered inside the application. This means that MS cannot hike the price of the in-app subscription to claw back the 30%.

    Even if this were possible, I'm not sure it would be wise. Hiking the price by 30% would probably raise their price above competitors such as Dropbox, in which case I'd just go for Dropbox.

     

    GoddersUK wrote

    I'm sorry, but there is no way that what Apple are doing can be construed as right. Not content with blocking the SkyDrive app Apple are blocking any 3rd party app that uses SkyDrive, since the sign in screen displays a sign up link.

    The apps mentioned in the articles used a non-native login and/or a sign up link that took the user outside the app. They were not rejected because they use Skydrive; they were rejected because they broke the app store rules. If they'd connected to their own in-house service they would have been rejected anyway.

     

  • GoddersUK

    , Blue Ink wrote

    @GoddersUK: let's hope not.

    Much as I don't like Apple's behavior in this case, the iPhone does not constitute a monopoly. If you want to sell stuff on the AppStore, you have to abide to Apple's rules, including the 30% cut. If you don't like it, go elsewhere.

    The app store essentially has a monopoly on selling apps to Apple devices (I'm not sure whether Cydia is legal over here; besides jailbreaking hardly constitutes a reasonable alternative regardless). In what other market sphere would a manufacturer of a product be able to control what you use a product for/what you use it with. If Apple (or Microsoft or Google or anyone else) are taking that approach then the grounds on which they can reject apps should be severely limited.

    Apple wouldn't be allowed to cream a commission from every Amazon purchase made using Safari (either on iOS, OSX or Windows) - this is essentially the same as that.

    And bearing in mind that Apple's market share of the smartphone market is around the 50% mark it may not be a monopoly but it's enough to require strong regulation.

    , PaoloM wrote

    @Blue Ink: yeah, the rules are pretty clear. Nobody forces anyone to be in any store

    Jailbreaking voids your warranty. I think that could be considered coercion...

    I'm sure the SkyDrive team can detect an ios browser and hide that link...

    I'm sure they could. But should they have to? Imagine you only encounter SkyDrive through iOS and fill up your storage. You'd never know you could buy more. And if you did you'd have to manually visit the website to do so. As I pointed out above this is no different to Apple demanding a commission for every Amazon or eBay sale made through iOS.

    Anyway, if you mean the link to subscribe, that wouldn't be good enough for Apple (if you mean the link to sign up that would just be stupid - it would massively break the UX for any new users):

    TheNextWeb wrote:

    Microsoft has persisted in trying to work out a compromise with Apple, but has thus far failed to come to an agreement. The company offered to remove all subscription options from its application, leaving it a non-revenue generating experience on iOS. The offer was rebuffed.

    EDIT: Dropbox removed their sign up link. Yay for broken user experiences... Perplexed

  • Bass

    @GoddersUK:

    , GoddersUK wrote

    In what other market sphere would a manufacturer of a product be able to control what you use a product for/what you use it with.

    In what market does a manufacturer of a product totally hide the internals of product and even sue you if you dare open the hood? Oh yeah, it's called the proprietary software industry.

    Basically, none of this is new or special. Your ability to control and tinker with your own [mainstream] devices was lost in the 80s with the rise of EULAs. Microsoft and Apple are just evolving the idea further, it's part of a decades long war on general purpose computing. You'll be desensitized to it in time, perhaps forgetting that it was even possible to install software without the OS vendor's approval.

  • GoddersUK

    , Ray7 wrote

    @GoddersUK:

    Point One: This will have nothing to do with EU regulators because Apple does not have a dominant position in the market.

    See above.

    Point Two: Even if Apple did have a dominant position in the market, it still would not fall under the jurisdiction of the EU regulators because Apple makes the hardware and the software; it does not build software for OEM phones. Therefore, the market is not the iPhone; the iPhone is in the same market as Android, WinPhone etc...

    What then was wrong with Microsoft bundling WMP with Windows? After all the market wasn't Windows - you could just have installed Linux. Or uninstalled WMP. Similarly for IE. What about Google's alleged manipulation of search results - you could just have used Bing? Surely actively preventing a competitors software functioning on an important and major platform is far, far worse than using a major platform of your own to promote your own products? (Of course I'm no anti trust lawyer... but if this isn't the law it should be.)

    (If one were cynical one might think that Apple is trying to push custom towards iCloud...)

    All MS has to do is what everyone else does: run the signup outside the Apple store.

    No You're not allowed to link to outside webpages when money is potentially involved. You can buy SkyDrive subscriptions from the SkyDrive website therefore the app cannot link to the SkyDrive website. And I really doubt MS can be bothered to bring the live ID sign up process into an iOS app.

    , Ray7 wrote

    Even if this were possible, I'm not sure it would be wise. Hiking the price by 30% would probably raise their price above competitors such as Dropbox, in which case I'd just go for Dropbox.

    As an interesting side note Dropbox have faced similar problems (and resolved the problem by removing the ability to sign up for an account from iOS app login page). Doesn't lead to a nice UX for first time users.

     

    The apps mentioned in the articles used a non-native login and/or a sign up link that took the user outside the app. They were not rejected because they use Skydrive; they were rejected because they broke the app store rules. If they'd connected to their own in-house service they would have been rejected anyway.

    There is, afaik, no other way to use SkyDrive. There was nothing inherent about what they did that broke the app store rules beyond, if you clicked through enough links from the sign in page, you could eventually arrive at a page at which you could make payments. And this does affect other services (dropbox, for instance). (Of course the fact that Apple offers their own competing service clearly can have NOTHING to do with this decision...)

  • GoddersUK

    , Bass wrote

    @GoddersUK:

    *snip*

    In what market does a manufacturer of a product totally hide the internals of product and even sue you if you dare open the hood? Oh yeah, it's called the proprietary software industry.

    Basically, none of this is new or special. Your ability to control and tinker with your own [mainstream] devices was lost in the 80s with the rise of EULAs. Microsoft and Apple are just evolving the idea further, it's part of a decades long war on general purpose computing. You'll be desensitized to it in time, perhaps forgetting that it was even possible to install software without the OS vendor's approval.

    Anyone would think you're trying to convert me into a paranoid FOSS promoter.Devil

    I also don't agree with your logic that an EULA that (traditionally) basically said "you can use n copies of this software for (non)commercial purposes and don't pirate it and there's no warranty" (and perhaps a few other clauses of dubious enforceability) is in any way comparable this.

  • ScottWelker

    ...  Crying indeed

    I'm developing a distaste for the lot.

  • cheong

    , Ray7 wrote

    *snip*

    A cunning plan sir! 

    Unfortunately, it won't work.

    To begin with, the app store policy forbids linking or 'channeling' users to an outside location from inside an app. So MS cannot put a link in the app, or even tell users where to go.

    That's why I didn't say to put the links and words in the App, just on the SkyDrive homepage where Apple has no right to control what to be put there. Maybe SkyDrive team can put the words on their blog too. I'm sure Apple has no ground to control what's on the other's blog. (Btw, what will happen if the App includes little blogroll to their teams blog, and the blogroll "just happen" to have article explaining this? Does it violate the rule?)

    2/. You cannot offer a cheaper subscription than the one offered inside the application. This means that MS cannot hike the price of the in-app subscription to claw back the 30%.

    That's the part difficult to circumvent... I'd like to see the actual words of condition. If the words doesn't contain clauses that "prevent authors to offer subscription outside the App ONLY", maybe Microsoft could just pull away the button to renew subscription inside the App.

    Btw, what would happen if Microsoft offers SkyDrive discount to people like MSDN subscribers? The current Apple account has no indication for such status, therefore offering lower price on the web based on this ground seems reasonable to me.

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  • Bass

    , GoddersUK wrote

    *snip*

    Anyone would think you're trying to convert me into a paranoid FOSS promoter.Devil

    I also don't agree with your logic that an EULA that (traditionally) basically said "you can use n copies of this software for (non)commercial purposes and don't pirate it and there's no warranty" (and perhaps a few other clauses of dubious enforceability) is in any way comparable this.

    Dubious enforceability is what makes EULAs tolerable. But, code is law. Apple has EULAs justifying their behavior, but if it was just EULA no one would pay much attention to it, and they'd have to involve lawyers and whatever it becomes more insane and difficult.

    But what really makes this new idea painful is it is being enforced through code. And that is powerful, more powerful than some random legal document nobody reads.

  • Ray7

    , GoddersUK wrote

    *snip*

    See above.

    *snip*

    I take it you're referring to this bit:

    The app store essentially has a monopoly on selling apps to Apple devices (I'm not sure whether Cydia is legal over here; besides jailbreaking hardly constitutes a reasonable alternative regardless). In what other market sphere would a manufacturer of a product be able to control what you use a product for/what you use it with. If Apple (or Microsoft or Google or anyone else) are taking that approach then the grounds on which they can reject apps should be severely limited.

    If you were allowed to change the definition of a monopoly to suit the argument then you'd be right.

    Unfortunately, you can't, so your definition of a monopoly remains a problem.

    You cannot have 'a monopoly on selling apps on an Apple device' any more than you can have a monopoly of selling bottled air under my bed. And I suspect you know this because you used the word 'essentially' to describe your 'market'.

    The iPhone is a product in a market, and a component of the iPhone is the app store. Apple is not restricting anyone because if you don't like it then you can simply buy a different phone, or develop for a different platform. If Apple could somehow prevent other phones being sold in the market, then they would be breaking the law whether they had a monopoly or not (and I might as well mention at this point that there is absolutely nothing illegal about having a monopoly).

    What then was wrong with Microsoft bundling WMP with Windows? After all the market wasn't Windows - you could just have installed Linux. Or uninstalled WMP. Similarly for IE. What about Google's alleged manipulation of search results - you could just have used Bing? Surely actively preventing a competitors software functioning on an important and major platform is far, far worse than using a major platform of your own to promote your own products? (Of course I'm no anti trust lawyer... but if this isn't the law it should be.)

    I'm glad you mentioned that because the difference is what keeps Apple  on the right side of the law and makes Microsoft a convicted felon.

    Go back a couple of years.

    Microsoft developed an operating system for the PC. IBM also developed an operating system for the PC. DrDos also invented an operating system for the PC.

    See the difference? The 'market' was operating systems for the PC. 

    Apple makes the whole PC, so they are not in operating system for a PC market – they are in the PC market.

    Okay so far.

    Right, now there was absolutely nothing illegal about Microsoft having a monopoly in the operating systems for PCs market. Nothing at all. 

    No, it's not illegal to have a monopoly, but it is illegal to prevent entry into that market. By charging PC manufacturers for Windows licences whether folk wanted a Windows licence or not, Microsoft was barring Linux and OS/2 an entry into the operating system for PCs market. That is the difference.

    Google is not a market, it is a search engine in the market with other search engines. The fact that it has a monopoly position is not a problem unless they prevent other search engines from entering the market, which they're not doing, as far as I can tell.

    Why can't MS bundle apps? Because according to the courts, their illegal activities have already harmed a free market, so they're restricted in what they can do to prevent further damage. In short, they have something Google doesn't: previous form.

    A little unfair? Maybe, but there it is.

    No You're not allowed to link to outside webpages when money is potentially involved. You can buy SkyDrive subscriptions from the SkyDrive website therefore the app cannot link to the SkyDrive website. And I really doubt MS can be bothered to bring the live ID sign up process into an iOS app.

    Well, that's kinda their problem then. Other vendors are coughing up so I don't think Apple is going to give MS a free ride on this one.

    As an interesting side note Dropbox have faced similar problems (and resolved the problem by removing the ability to sign up for an account from iOS app login page). Doesn't lead to a nice UX for first time users.

    Mmm. Not sure this is still the case. The Dropbox app also has an option to buy additional storage which, as an in-app purchase, would cause them the same problem. (Yup, just checked it on my iPod Touch).

    There is, afaik, no other way to use SkyDrive.

    Then Microsoft should have built it with third parties in mind. Other services that use DropBox can access the sign-in as long as DropBox is installed.

     

    There was nothing inherent about what they did that broke the app store rules beyond, if you clicked through enough links from the sign in page, you could eventually arrive at a page at which you could make payments.

    You know, I'd quite like to have a Windows running on six hundred machines and only pay for one licence. I should be able to; there's nothing inherently wrong with doing it.

     

    And this does affect other services (dropbox, for instance). (Of course the fact that Apple offers their own competing service clearly can have NOTHING to do with this decision...)

    No it doesn't, because Dropbox pays up and so do other similar services. Microsoft didn't want to pay and decided to whine about it, because they're labouring under the misapprehension that their name carries as much weight as it did in the nineties.

     

     

  • Ray7

    , cheong wrote

    *snip*

    That's why I didn't say to put the links and words in the App, just on the SkyDrive homepage where Apple has no right to control what to be put there. Maybe SkyDrive team can put the words on their blog too. I'm sure Apple has no ground to control what's on the other's blog.

    No they don't. Microsoft is free to put something on their blog that points users somewhere to sign up. As long as it isn't in the app then Apple can't stop 'em.

     

    (Btw, what will happen if the App includes little blogroll to their teams blog, and the blogroll "just happen" to have article explaining this? Does it violate the rule?)

    What if I 'just happen' to install my single copy of Windows on six thousand machines?

    Of course it violates the rule. Apple would pull the app and would be well within their rights to do so.

    That's the part difficult to circumvent... I'd like to see the actual words of condition. If the words doesn't contain clauses that "prevent authors to offer subscription outside the App ONLY", maybe Microsoft could just pull away the button to renew subscription inside the App.

    Freely available on the Apple website, so you can check 'em yourself. Oh, and Apple reserves the right to change the rules whenever it feels like it.

    Btw, what would happen if Microsoft offers SkyDrive discount to people like MSDN subscribers? The current Apple account has no indication for such status, therefore offering lower price on the web based on this ground seems reasonable to me.

    Here's the problem: What seems reasonable to you, may not seem reasonable to Apple. They would probably argue that this is the same subscription because it gives access to content, and would insist that MS drop the price of their app store subscription to match it.

    And here's the thing that you might not realise: They have banned stuff stuff for religious reasons, and they've banned stuff simply because there's already too much of the same stuff in the store. Now, MS can try all sorts of tricks to circumvent the rules, but at the end of the day, if Apple spots it, they will ban it and they don't have to give a reason. The app store is very much a police state, and Apple changes the laws as and when it sees fit.

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