Apple may find itself at the center of a new antitrust lawsuit after the U.S. appeals court ruled that the App Store’s “walled garden” could be monopolizing the market for iOS apps.
What the 9th U.S. Circuit Court of Appeals ruling takes issue with is the fact that iOS apps can only be downloaded from the App Store, and not from elsewhere — thereby adding up to a potential monopoly.
This issue was first raised in 2012 as being potentially anticompetitive, but courts have previously sided with Apple.
Apple’s lawyers argue that users are buying apps directly from developers, and that Apple is doing the equivalent of renting them space to sell their goods.
Judge William A. Fletcher disagreed, however, and ruled that iPhone users are buying apps directly from Apple, which makes the legal challenge valid.
Should this case continue, and the challenge succeed, Apple may be compelled to let users shop for apps outside of the App Store — which critics of Apple’s current methods argue would open up the market and help lower prices.
“The other alternative is for Apple to pay people damages for the higher than competitive prices they’ve had to pay historically because Apple has utilized its monopoly,” Mark C. Rifkin, an attorney representing the group of iPhone users bringing the charge against Apple, told Reuters.
As with many other giant companies, Apple has been subject to various antitrust investigations — and speculation over potential antitrust investigations — over the years. These have included a class action antitrust lawsuit about whether Apple gained an unfairly monopolistic position by blocking competitors from putting their music on iPods, an antitrust investigation over e-book price fixing in 2013.
Luke Dormehl is a U.K.-based journalist and author, with a background working in documentary film for Channel 4 and the BBC. He is the author of The Apple Revolution and The Formula: How Algorithms Solve All Our Problems … and Create More, both published by Penguin/Random House. His tech writing has also appeared in Wired, Fast Company, Techmeme and other publications.
7 responses to “App Store’s walled garden could bring antitrust suit”
FFS… bloody americans.
There is NO WAY in hell am I downloading an iOS from ANYWHERE that isn’t from Apple’s store. I don’t want malware / viruses / hackers getting my data. If I did, I’d own a Samshite Android phone.
Seriously. This is no different than Amazon being the only source for Kindle books.
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Yea this is a freaking joke. More government intrusion where it doesn’t need to be.
UH, no… it’s the equivalent of Amazon being the only place you can by ANY electronic book or audiobook. There are plenty of sources for movies, TV, books… but Apple not only is the only way that I can install an app without jailbreaking or developer sideloading trickery, it also decides what I CAN buy. It’s my phone, I get to decide that; Not Apple.
Sp, good on them! Anything that breaks this odd idea that someone can tell me what I can do with MY PROPERTY is good in my book. And BTW, it’s not “government intrusion” when citizens sue a company when it oversteps those lines.
The product you buy when you buy an iPhone or iPad isn’t just the device itself, it’s the whole package. You can’t buy an iPhone and complain that Apple forces you to use iOS and you can’t buy an iPhone and complain Apple forces you to use the App Store. The choice you have as a consumer isn’t between using the App Store or using some other source for iOS apps, it’s between using iOS and all that entails or using Android or some other OS.
Much of Apple’s iOS business model is built on the App Store as the sole place to get apps. The examination Apple does of apps before allowing them to be sold isn’t just a bonus to make people feel good about using the App Store, it is fundamental to iOS’s status as a secure platform. Allow people to get apps from insecure sources and Apple customers start having problems, Apple has to start doing more to fix problems rather than just prevent them, and Apple’s reputation and promise for iOS as a secure platform is compromised.
Take down the walls of the garden and Apple and its customers lose a big advantage of the iOS platform over Android.