19 november 2020
18:09
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Apple CEO Tim Cook is having a difficult week. On Wednesday evening, his company was fined in the Batterygate case, earlier that day there was plenty of discussion about the App Store, Monday was about privacy. Apple’s drive to control and monopolize is increasingly questioned.
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It costs Apple about 113 million euros
to reach a settlement in the investigation by several dozen US states into the way in which the company dealt with older iPhones.
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In 2017, users of older iPhones saw their devices suddenly slow down. Apple has been accused of deliberately making older devices less performing to encourage users to buy newer ones.
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Apple explained that it wanted to prevent devices from accidentally shutting down due to deteriorating batteries that were subject to increasing demands.
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Transparency
It even came to a public apology by Apple, which discounted replacement batteries. But the damage was done. “Big Tech must stop manipulating consumers and tell them the whole truth about their practices and products,” said Arizona Attorney General Mark Brnovich.
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Privacy
There were complaints about it last weekend delays in starting apps on Mac computers. The delays turned out to be related to the mechanism that forwards the identification of every program used on a Mac to Apple.
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A security researcher, Jeffrey Paul, wrote a flaming blog post entitled “Your Computer Isn’t Yours.” Apple did not explicitly reply to the post, but published a document about Gatekeeper, a technology that checks the security of apps online. “We do not monitor what users do with their device,” he said. But concessions were made nonetheless. IP addresses would no longer be recorded. Next year, the user will also have the option of simply not allowing the checks. But once again the impression was given that something happened that the ordinary user did not know and that must now be undone.
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Meanwhile, Austrian privacy activist Max Schrems filed a complaint with the French and Spanish authorities. According to him, Apple stores data of iPhone users without asking for their permission. The offending code is called Identifier for Advertisers (IDFA).
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That attack was unexpected, as Apple had just hit the headlines for wanting to severely restrict the access of advertisers and platforms like Facebook to consumers’ online habits. “We want to give users full control over their data,” said the company, calling Noyb’s claims “factually incorrect.”
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War over the App Store
On Wednesday, Apple thought the time was right to make the news positively. It halves the commission for developers who offer apps in the App Store and have sales of up to $ 1 million per year. The committee goes for them from 30 percent to 15 percent. Estimates of the financial impact for Apple vary. For 2021, amounts are mentioned from 600 million dollars to 1.6 billion dollars. The latter amount equates to 0.5 percent of the total annual income.
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In any case, for the critics, the measure is beside the point. The Coalition for Fairness, for example, which includes the gaming company Epic Games and the dating app Tinder, the music apps Spotify and Deezer as well as the publishers of news media (including the Flemish), wants to end Apple’s monopoly on the app store and the payment system.
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According to Epic Games, whose game Fortnite is no longer allowed in the app store and which is litigating against Apple, a large party such as Amazon will also receive a substantial discount on the commissions. Why not her? Critics repeatedly insist on a lack of transparency and the abuse of a dominant position.
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‘Energy comes from the customer’
Will all the criticism lead to decisive government intervention that will overhaul Apple’s business model? KBC financial economist Tom Simonts does not see this happening immediately. ‘The energy in such an ecosystem comes from the customer. And in the case of Apple, they are quite satisfied, ‘says Simonts.
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Apple’s commission cut has only a very limited impact on the company’s cash flow. “There may even be a positive payback effect,” says the economist. In addition, the app store is highly integrated into Apple’s ecosystem. The chances that another app store would have a major financial impact in that system are slim. Far-reaching measures, whereby the app store is required to be disconnected from Apple, Simonts does not see happening. As interesting as the discussion about transparency and dominance may be, Apple shareholders should not immediately worry about it.
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