Blog Post

When Does Apple Become Anticompetitive?

jobs_godfatherWhen the Palm Pre/iTunes Syncing fiasco started, especially when Apple (s aapl) blocked the hack Palm was using and people started screaming about Apple’s monopolistic practices, I pretty much shrugged the whole thing off. In Apple’s eyes, iTunes exists for one reason, and one reason only: to sync with iPods and iPhones; Apple is under no obligation to open its software to Palm (s palm) any more than Epson is under any obligation to make their scanner software work with Canon’s (s caj).

With the App Store, it’s a little different. A year ago, Steve Jobs stood on a stage and painted a picture of Apple as benevolent Guardian of Light. The types of software Apple would disallow seemed like a no brainer: porn, malicious apps, bandwidth hogs, etc. Now, I’m starting to think that scene could have been from a remake of the Godfather.

A young software developer nominated by his peers to ask this request is ushered into the Godfather’s study. A tall, unshaven man is sitting behind a desk petting a cat. Two men are off in the shadows.

“Please Godfather,” the young man pleads. “We will do anything to be able to develop for the iPhone. ANYTHING.”

The Godfather sighs, puts the cat down and stands up, brushing cat hairs from his black mock turtleneck. His sons, Phil and Tim, come out of the shadows. He walks over to the trembling developer, places his arm around his shoulders and says, “I will grant you your request. In return, you will let me dip my beak into your enterprise — just a little, say 30 percent. You will also agree to make no apps with that funny business. No nudity. Nothing obscene. We are not the monsters the media paints us to be. We run a family business. However, I must caution: Some day, and that day may never come, I may need to disallow one of your apps.”

A year passes, and the young software developer is now in a basement, chained to a chair under a single, exposed light. Blood is running down his face and the Godfather is wearing a stained apron over his turtleneck and jeans.

“I let you run your own little enterprise, and this is how you repay me? You attack my own business and try to cut into my profits — cut into the alliances I have created with the other Families, the Families that are the transport for our commerce. Why do you disrespect me? There can be no competition to the apps that ship on the iPhone. No apps to download podcasts. No apps to check your mail. No apps to surf the Internet. We already give you those apps.”

I have an issue with Apple disallowing apps because they “duplicate existing functionality” on the iPhone. Granted, there’s a line. As much as I’d love a Gmail app that handled conversation threading, I can see where there’d be confusion with it not being the default mail client. For the most part though, I think if someone searches for, and downloads, an app, there’s not going to be much confusion on what it does.

It seems like we rarely go through a month where there’s not an app rejection worthy of a facepalm. Podcaster got refused because it had functionality Apple hadn’t released yet. Eucalyptus got refused because a reviewer was able to use it to download the Kama Sutra (although you can make a point it duplicated existing functionality since Apple thoughtfully provided a browser I can use to view all types of adult content). Now, Google Voice got refused because AT&T (s att) requested it. With the not-so-subtle attacks against AT&T at WWDC, I’m amazed Apple caved to AT&T and didn’t just start laughing.

Developers are starting to shy away from the platform — it may not be an exodus, but the natives are definitely restless. While he’s much maligned for it, Ballmer was right: it’s all about developers, developers, developers. This is turning into a PR nightmare for Apple, which is hard to imagine, given PR is Apple’s strong point.

I’m also worried if they continue refusing apps because it competes against Apple (or, rather, “duplicates existing functionality”) that may begin to start an antitrust movement. It’s not illegal for a company to be a monopoly; it is illegal to use that monopoly to stifle competition. I fear Apple is getting dangerously close to that point with the heavy hand they have on the App Store.

16 Responses to “When Does Apple Become Anticompetitive?”

  1. not my usual handle

    What is it with “You Will Only Have The True Apps That We Give You.”

    And YES some other commenter gets the irony.

    25 years later it is 1984 again… and the Big Brother on the screen is Apple. And developers need to Think Alike. Worse, on a lot of sites, lots of comments defend Apple’s restrictions as if they’re the stoic gray audience figures in that Ridley Scott commercial.

    Protect the device and the network from malware, and users from stuff that’s missrated… and yes, if you want, make developers fix their bugs. But let 100 calendar apps bloom. And email clients. They don’t even really COMPETE with Apple… they come with the phone. Apple collects its 30% on the 3rd party app.

    But the effect on innovation is real. No developer whose thrown his heart and soul into something to have it rejected like this is going to do it again. NEXT TIME if they do something at all, it will be safe safe safe and low effort. A new wrinkle on the tip calculator. App # 65001.

  2. Olternaut


    Wasn’t iTunes in the beginning for all mp3 players? When did iTunes close itself off to only Apple products? Was it the minute that the very first iPod was introduced?


  3. FINALLY !!!
    Mark you have (almost) restored my faith in theappleblog… I almost thought that there was no return from the fanboyism of this website, and finally someone sees the light ;)
    Seriously as much as I love Apple it’s a real shame to see it go down like this, reminds me of that 1984 spot, only this time it ain’t IBM that’s the bad guy.

  4. Bob Smith

    On the iPhone, I cannot change the default mail application. If I have a gmail app on the iPhone, when I click “email this link” iPhone’s mail app will load, not gmail. That could be confusing/bothersome.

    That may indeed be confusing, but the Gmail app isn’t the source of this confusion, Apple’s stupidly restrictive OS environment is. Regular OSX doesn’t limit what you can install as the default mail app. It takes true genius to prevent you from doing the same thing on the iPhone.

    • Mark Crump

      I agree — my context wasn’t that the users are idiots, but the closed nature of how apps are handled introduces confusion. Looking back, I probably should have added (and with no way to make my default mail client on the iPhone…)

  5. Mark Crump

    On the iPhone, I cannot change the default mail application. If I have a gmail app on the iPhone, when I click “email this link” iPhone’s mail app will load, not gmail. That could be confusing/bothersome.

  6. Bob Smith

    I can see where there’d be confusion with it not being the default mail client

    Confusion? How so? Do users confuse MS Word for iWork? Thunderbird for Mail? Firefox for Safar? I really, really hate it when users are presumed to be idiots.

  7. Technically? When they have more than 40% market share and abuse that share to extend or maintain a position of market dominance. Simple as that. They have a natural monopoly at the moment, but competition laws are slightly different for natural monopolies – not to mention that entry into the App store is based on strict T’s & C’s that have to be agreed and adhered to. So, since they have less than 5% of the mobile/cell phone market, they technically cannot be found to be abusing a market position and therefore not anti-competitive. It’s amazing that since the hoo-haa with Internet Explorer and Windows, the terms ‘anti-competitive’ and ‘monopoly’ are being wantonly bounded about without any semblance of understanding by both commentards and pundits alike. Can we all just stop, or at least learn the definitions from a site other than Wikipedia. Let’s start with the OECD, or someone like that. Then we can have sensible discussions about this kind of thing – or not, as this is all clearly conjecture. Great site otherwise – keep up the good work! :^)

    • Mark Crump

      But, those T&C’s don’t spell out what apps can and can’t be made? You can make an app, think it’s compliant with the T&C, and have apple refuse it “because it duplicates functionality on the iPhone.”

      But, I can create a notes app, or a calendar app, or a contacts app, but how do I know I can’t create a dialer app, or an app to help me manage podcasts, etc.

      Apple simply saying, “this duplicates functionality” to me sounds anticompetitive on that front. Apple is the sole storefront for the iPhone. Unless I break my EULA and jailbreak, there’s no way for me to get an App on the store.

  8. Actually, the guys that are really boned are the ones that have been selling Google-Voice enabling apps for a while, and those apps have been removed. Apple is granting customers who purchased those apps full refunds, while still keeping their 30% commission. So I can see the developers of those apps having to pay back pretty much ALL the money they earned so far + 30%…

  9. Apple are under contract with AT&T, it would be logical to assume that they get to call the shots on applications that use their network and/or are threat to it and it’s profits and Apple are obligated to honor that contract. They can’t say “Well, screw you!” and plow on ahead.

    I’d imagine Apple won’t be renewing their contract with AT&T when it expires in 2010, then this nonsense will stop, if they don’t come to a work-around before hand.

    You can’t seriously believe that Apple JUST don’t want you to have this app, that’s idiotic.

  10. ljbad4life

    at this point apple can argue that there are plenty of other mobile platforms people can develop for, so the apple app store isnot a monopoly.

    if you want apple to pay attention, devs need to take their apps elsewhere and make it very public. even in the case of a neutered app (such as sling player) make it known that on other platforms the app is FULLY functional.

    as a consumer bite the bullet and pay the termination fee and take your business elsewhere. I personally love my imac and macbook, but I would never get an iphone because of the stunts at&t and apple pull. some people also need to wake up. there are too many alternatives that offer the same or more functionality as the iphone.