As governments around the world scrutinize Apple’s App Store policies, the U.S. Congress is pondering legislation that could stop the company from preinstalling default apps on iPhones.
Apple critics suggest that such a move would level the playing field and give smaller developers a chance to compete. But would it actually benefit consumers, the purported goal of such antitrust legislation?
I’m not sure it would. In fact, it might simply make owning an iPhone a lot less enjoyable.
Apple holds all the cards … sort of
The proposed U.S. legislation comes as Apple faces similar antitrust scrutiny elsewhere. In the European Union, regulators are looking at how Apple privileges its own services. Meanwhile, the United Kingdom and Japan also are looking into Apple’s smartphone supremacy.
It’s easy to see why governments, egged on by tech companies, would be worried about Apple’s dominance. The company wields a massive amount of power. With its $2 trillion-plus market cap, Cupertino possesses the kind of deep pockets that would allow it to buy virtually any company it wanted.
Apple also sets the rules of engagement by virtue of its tight control of the App Store. That’s particularly worrisome for companies that attach themselves to the Apple ecosystem but don’t want to be squashed by it.
If Apple sees a particularly successful or interesting idea, it can swoop in and produce its own version, essentially “Sherlocking” competitors. It’s a bit like the way Amazon allows third-party sellers on its platform but also gathers sales data, allowing it to jump in and start selling (or even manufacturing) a competing product if it sees a big sales opportunity.
By enforcing its App Store rules, Apple controls which software is allowed onto iPhones and iPads. While Apple co-founder Steve Jobs didn’t want to allow third-party apps onto the iPhone initially, he quickly caved and saw the value of doing so.
As a result, Apple acts as both the mall owner and also the owner of some shops within that mall. It controls whether you can sell, say, an email app in its App Store. But it also makes its own Mail app.
A problem with no clear solution
Marques Brownlee recently recorded an interesting video discussing Apple and the illusion of choice, using AirTags and Tile trackers as an example.
By opening up its Find My network to third parties, Apple seemingly makes the choice between Tile and AirTags a bit fairer. But, whichever choice Tile makes about joining the Find My network, it hurts itself. Do it, and Tile makes Apple’s Find My network stronger. Don’t do it, and Tile makes its own product less compelling.
I understand why this scenario puts competitors in a difficult position — and why, despite Apple deprioritizing its own apps in search results and cutting its commission for the bulk of developers, this remains a problem.
Whether it’s Safari, Apple Music, Apple Pay or any other Apple-branded option, Cupertino has a clear advantage. Most people will gravitate to the default recommendation in a certain category.
Sure, Google Maps might run rings around Apple Maps. But most people will see that Apple has a Maps app and use that. This proves especially true when it comes to features more tightly baked into Apple products. Google Assistant is available on iPhone, but Siri is the default. There are other ways of paying for products beyond Apple Pay. But Apple Pay is just so darned easy.
The alternative to this is opening up the playing field to make every possibility equally accessible. But that seems like a divorce settlement that pleases nobody. In psychologist Barry Schwartz’s 2004 book The Paradox of Choice, the author writes about a local grocery store that stocks 75 iced teas and 285 varieties of cookies.
That’s good news for the makers of all those ice teas and cookies — but it’s paralyzing to customers. The paradox Schwartz refers to is that, while more choice sounds better, it can sometimes be a negative for customers.
The paradox of choice
You could argue that Apple’s rise to its current dominance was all about robbing users of choice — for their own good. Steve Jobs didn’t give users much choice about the size of iPhones they bought.
You could buy an iMac G3 in multiple colors, but the range of Macs under Jobs was far less confusing than it was in the bad old days of the mid-’90s with Power Macintoshes, Performas, Quadras and clone Macs. He purposely set out to limit consumers’ options.
Apple’s decision to take away certain choices from users will always upset some people. But that approach enabled a company whose products work right out of the box without much thought.
There are plenty of reasons to desire marketplace competition. I also sympathize with app developers who know they’ve pinned their success to a company that, ultimately, is their competition. It’s like feeding an alligator, hoping it will eat you last.
But it’s also fair to say that, in this scenario, the cure could be worse than the ailment. People buy Apple products because they like what Apple does. Is an iPhone with no iPhone apps still an iPhone? And does making Apple products harder to use really make sense for anybody?
The idea of, for example, having to choose every default app from a long list when you boot up a new iPhone — with Apple’s apps near the bottom of the list to avoid any unfair advantage — doesn’t sound like it would be good for customers.
It sounds like a bad solution reached by well-meaning but misguided regulators because it sounds fair, rather than because it’s sensible.