The US antitrust case against Apple’s App Store exclusivity is “firing on all cylinders” according to the head of the Department of Justice unit responsible for policing breaches of competition law.
The implication is that Apple may soon be forced to allow third-party app stores and/or sideloading in the US as well as in Europe …
Background
Antitrust regulators have long been investigating Apple’s exclusive control over third-party iPhone apps. Whether you’re a consumer wanting to buy an iPhone app, or a developer wanting to sell one, there’s only one place you can do so: the App Store.
Apple has complete control over which apps it allows into the App Store, and the company sets its own terms – including its 15% or 30% commission – which developers and consumers alike have to accept. Many regulators consider this a breach of competition law.
Europe has already ruled against Apple
The European Union has already legislated on this in the form of the Digital Markets Act (DMA), and declared that the App Store is covered by the law. This means that Apple must permit competition in the iPhone app market, and it’s most likely that the only way the company can fully comply with this legislation is to allow competing app stores on the iPhone. Apple must comply by April.
The iPhone maker has had teams working on this for at least a year, and likely longer.
US antitrust case against Apple
The US Department of Justice (DOJ) has for years been carrying out its own investigation into the same issue, and many competition experts expect it to reach the same conclusion: that Apple must permit either third-party app stores, or side-loading of iPhone apps, or both.
The Financial Times quotes the man in charge of the DOJ’s investigation, implying that it is now close to ruling.
Jonathan Kanter, head of the Department of Justice’s antitrust unit since November 2021, has made no secret of his ambition to bring cases against the biggest US companies.
His department has been probing Apple’s App Store policies for years and is now, according to Kanter, “firing on all cylinders”. The window for him to bring a case is closing, however, as the US presidential election and a potential change in administration loom.
Microsoft is expected to be one of the first companies to open a third-party app store for iOS apps, and it’s likely that a number of major games companies will do the same. Games account for around half of Apple’s App Store revenue.
Other countries likely to follow, including Japan
Apple is facing similar legislation all around the world. We learned just last week that Japan is preparing its own law.
According to a report in Nikkei Asia on Tuesday, the Japanese regulator is preparing antitrust legislation that will require big tech companies like Apple and Google to allow third-party app stores, as well as alternative payment methods for any apps.
All of this makes it increasingly likely that, when Apple does comply with European law, it may decide to bite the bullet and implement the change globally, rather than having to be forced to make the move one country or region at a time.
Photo: Mariia Shalabaieva/Unsplash
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