Analyst Ben Thompson believes that US antitrust legislation could put Apple’s ecosystem at risk unless the company is willing to compromise on the App Store.
The danger is that legislators may view the various components of the ecosystem as anti-competitive, but they would be less likely to do so without the App Store playing such a central role …
Background
We recently summarized the background to a planned new antitrust legislation in the US.
2019 saw the start of a year-long investigation into whether the tech giants were guilty of anti-competitive behavior. Apple was one of the companies investigated, and Tim Cook had to testify before Congress, and it was one of the technology companies that was found engaging in “deeply disruptive” anti-competitive behavior.
The result was initially expected to be a single antitrust bill designed to address all the issues revealed, from tech companies like Facebook buying rival social media platforms like Instagram, to Apple favoring its own apps over third-party ones.
However, in March we learned that Democrats might introduce several antitrust bills, each designed to address different problems.
One such bill is the American Choice and Innovation Online Act, which includes the following provision:
It shall be illegal for a covered platform operator to own or control a line of business, other than the covered platform, when ownership of the covered platform or control of that line of business gives rise to an irreconcilable conflict of interest.
Apple’s ecosystem at risk
The main threat to Apple is the way it runs the App Store. But Ben Thompson believes that unless Apple offers its own commitments, any action taken could threaten the entire Apple ecosystem.
One of the central pillars of many of those pushing for new laws in this area is the significant limitations on the ability of platforms to deliver applications and services, or integrate them in any way that benefits their offerings.
In this potential world it is not simply problematic for Apple to charge Spotify 30%, or forcing the music streaming service to wait for users to figure out how to subscribe on the web, even when Apple Music has a fully integrated record flow and not 30.% of taxes; It is also illegal to embed Apple Music in SharePlay or Shared-with-you or Photos, or in the more extreme versions of these proposed laws, even to have Apple Music. This limitation would apply to basically all WWDC announcements – say goodbye to Quick Note or SharePlay-as-an-exclusive-service, or any number of Apple’s built-in offerings. […]
This, more than anything, is why Apple should rethink its approach to the App Store. The more integrated the company is, the more unfair will be its arbitrary limits on the services of the competition. Isn’t it enough that Spotify will never be as integrated as Apple Music, or that 1Password will not be integrated as Keychain, or that SimpleNote will only be in its sandbox as long as Apple Notes is ubiquitous?
He argues that measures such as cutting App Store commission and allowing alternative payment platforms for in-app purchases may be enough to satisfy lawmakers if Apple acts quickly.
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