We need app store competition, not Apple's 1960s-style paternalistic monopoly
A pair of bills moving through Congress would force some of the largest tech companies to cede control over how people find and use mobile apps, leading to more competition and lower prices. But big tech companies, especially Apple, want to scare people with dire warnings that the bills would put their security in jeopardy.
Tellingly, big tech firms are not so loud about other things jeopardized by the bills — their app store monopolies and ability to make more money off mobile customers and app developers.
Pro-competition bills — S. 2992, the American Innovation and Choice Online Act, and S. 2710, the Open App Markets Act — would open up the largest app stores, including Apple’s and Google’s, by requiring them to allow competing third-party app stores and alternate channels for in-app payments. The bills would also stop the largest app store operators from preferencing their own apps over competitors’.
iPhone users would have the freedom to install less expensive third-party apps and choose to shop at third-party app stores. While some alternative app stores might have a greater volume of malicious apps, others may take a stronger approach to security and privacy than Apple — one that isn’t limited by the drive to enhance a monopolist’s bottom line.
Alternative app stores or app-vetting services could also offer important security- and privacy-enhancing apps that Apple has banned from iOS devices.
Nothing in the bills would stop Apple and Google from vetting apps for their phones for privacy and security, or prevent them from offering new protective measures. So, because they trust Apple’s vetting of apps and are happy with the apps Apple lets them download, many iPhone users will choose to stick with the App Store. For those users, nothing will change under these bills.
The choice would be theirs. But Apple doesn’t want that. It wants to decide what, and how, users can purchase mobile apps. And it’s not just because the company is concerned about users’ privacy and security, which indeed it is.
No, it’s also because Apple wants to protect its monopoly profits. Apple gets a 30% cut of what users pay for an app, a cost to developers that gets passed on to consumers. Locking users and developers into the App Store helps drive Apple’s profit margins on the service into the stratosphere — to more than 70% by some estimates. We shouldn’t be naïve to think that such a bonanza, and not just security concerns, motivates Apple.
In 2020, for example, Apple prevented Basecamp, an application development software company, from making important security fixes on its new paid email service HEY because it violated App Store rules. The “violation”? HEY developers did not route users’ subscription payments through Apple to ensure that Apple received its 30% cut. Apple threatened HEY that until changes were made, security updates would be blocked. This was despite HEY following the same payment pathway that Netflix and Amazon have always used. Following a public pressure campaign and negative press, Apple relented and allowed the security fixes to proceed, but other app innovators face the same threat.
Apple’s claims that letting users have more choice would put them in harm’s way is the same old paternalistic take on a market that we saw AT&T embrace when it sought to maintain its mid-20th-century monopoly over telecommunications. The country has rejected these paternalistic arguments in the past. Not Apple.
In Epic Games v. Apple, a lawsuit in which the maker of Fortnite alleges that Apple has an illegal monopoly in iOS app distribution, Apple claims that only its complete control over app distribution and in-app payments can protect users. Yet, it bans apps and features that would serve a wider range of security and privacy needs, like VPN apps for international travelers and apps that tell the user if their device has been jailbroken. (EFF filed a friend of the court brief in the case siding with Epic.)
While the judge in Epic Games v. Apple declined to find that Apple is a monopolist, she recognized that things must change. She wouldn’t let Apple delay enforcement of a California court ruling that says the company can no longer prohibit developers from pointing to other means of payment besides Apple’s own payment systems. She also embraced the idea that Apple could vet iOS apps for security but still allow iPhone users to get mobile apps from other sources that also screen for security and privacy.
Monopolistic control is not the way to ensure user security. Competition, not walled gardens, is the best way to create better, safer products. Apple’s fear-mongering that competition would prevent it from addressing security is disingenuous, because monopoly control over app distribution is simply not necessary to protect users. In fact, it makes users less secure. Congress should see through Apple's attempts to foment fear about a world where it does not have complete control over iPhone customers’ App Store experience, and pass these pro-competition bills. Users can have choice and security.