Aug 17th, 2020 - Category: Apple
During the last several months, people have taken up some interesting hobbies while in quarantine: bread making, gardening, art, and most recently questioning the monopolistic practices of trillion dollar companies. Facebook must be breathing a digital sigh of relief. The spotlight isn’t on them for a change. No, this time it’s Apple’s turn and the argument roughly is: “they charge developers 30% to be on the App Store; this is completely unfair; how can developers survive; it stifles competition because developers have no other choice; the walled garden has given Apple monopoly power.”
At the center of this attack on Apple are two unlikely companies: Epic Games and Proton Technologies. You might know Epic from their massive success with Fortnite, but Proton is a small Swiss company. They make ProtonMail and ProtonVPN, products that protect civil liberties online through encrypted email and secure connections to the Internet. Their philosophy can be summarized in a sentence, “privacy is a fundamental right that should not be squandered in the name of security.” Proton’s CEO Dr. Andy Yen has spoken about this regularly, including an excellent TED Talk and an “Ask Me Anything” on Reddit with over a thousand comments. So you might think that Yen and Apple would be on the same side, especially with Apple’s “people come first” policies, but they definitely are not. Yen’s blog post “How Apple uses anti-competitive practices to extort developers and support authoritarian regimes” and an ArsTechnica article make his position clear: “What is most troubling is that Apple requested the removal of the language around censorship in ALL countries where our app is available, in effect doing the bidding of authoritarian governments even in countries where freedom of speech is protected.”
Wow, strong words against a company that is widely regarded around the world as a champion of privacy and human rights. Maybe this is less about 30% App Store fee and more about freedom of speech and human rights? Unfortunately Yen mixes his comments about freedom of speech with his criticism of App Store fees, “Perhaps the most harmful expression of this power is Apple’s exorbitant 30% tax on developers.” Looking deeper into the comments on these articles and many others, a similar theme emerges. Users’ opinions are split 50/50, either “Apple is monopolistic” or “Apple built the App Store, they should be able to do whatever they want.” In response to Yen and many others, Apple commissioned a study highlighting the fact that 30% is actually similar to other app stores like Google, Amazon, Samsung, and Microsoft. Still the conflict grew into the realm of politics with the chairman of the House antitrust subcommittee actually calling Apple’s closed ecosystem “highway robbery.”
It came to a head last week with Epic’s CEO Tim Sweeney saying the fight isn’t about money, but really about “basic freedoms of all consumers and developers.” This was immediately followed by Sweeney’s approval of a change to Fortnite (involving payments) that directly violated Apple and Google’s App Store rules which got Fortnite banned from both. But Sweeney didn’t stop there. Epic launched a protest video inside the game designed to mock Apple’s iconic “1984” Macintosh commercial and portray Apple as “Big Brother.”
Could this get any uglier? Many people recognize and value Apple’s contribution to privacy and security. For instance, they’re not selling personal data to advertisers; they have created an App Store that weeds out scams and malware; they distribute the apps for developers; provide development tools at no charge, handle payments, updates, and pay 70% commission. iOS updates are free, adding new and impressive features every year that developers rely on to create their amazing apps. Also Apple definitely has competitors, especially from Android that has over 70% of the smartphone marketshare.
While I’m not going to take a side in this argument, it does seem like it is more about money and control. Maybe Dr. Yen is on a mission to protect online privacy, but he also does not want to pay the 30% “Apple tax.” Sweeney is another matter altogether. As the CEO of a $5B company, he has a multi-million dollar motivation to avoid any fees and control from Apple. He has a long record of promoting a “hands-off” approach to technology markets. Sweeney wrote 4 years ago that “Microsoft will remove Win32, destroy Steam Gaming voicing his concern about threats gatekeepers like Microsoft and Apple pose to his business. He even wrote 20 years ago that “that our thought processes as programmers are deeply influenced by the language we programmed in.” In some ways, this describes his behavior better than any conclusions we can draw from his actions. He is a programmer at heart and programmers are the gods of their digital realms. They create worlds that give players the power to make winning possible. The best games (like Fortnite) provide enticing rewards for skilled players beating their opponents. Maybe on a deep level, the thought processes that go into creating Fortnite (and running the company that makes it) lead to an overwhelming desire to be in control of the real world as well?
Is Apple in trouble? Probably not, it is very big company with some great leadership. They will find their way through this crisis like they have through so many others. Should the App Store have the option to be more open, provide lower fees for developers, allow more competition, etc.? Maybe, but with more options comes more user responsibility to update, backup, avoid scams and spam, track payments, and much more. It’s all about tradeoffs.