Last week the judge put in Epic v. Apple asked if Epic really had antitrust proceedings against Apple or if they just wanted to Help children make impulse purchases. Judge Yvonne Gonzalez Rogers spoke about the importance of where and how People pay for their apps, and today she continued that type of survey until she proposed some kind of change to the App Store policies that Epic never originally put on the table.
Epic sued Apple over prohibition Fourteen days from iOS via a direct payment system for V-Bucks, Fortnites Game currency. Epic called this unfair and monopoly. However, Apple argued that developers can sell in-app purchases through their Safari browser, even at a discounted price – so there is no blocking. And while Epic has focused on explaining itself Why web apps are not a good substitute for native appsExpert David Evans raised another important issue: anti-steering rules.
Anti-steering rules (in this context) refer to rules that prohibit Developers from targeting users outside of the Apple ecosystem. iOS developers can’t add links or references telling users to get a better deal on their website, or send emails to accounts created through Apple. Android has these rules too, but it does delayed a serious crackdown By fall of this year – and since you can install third-party stores and sideload apps on Android, developers in the Google ecosystem generally have more options.
Evans, an economist, originally tried to explain in-app purchases by comparing Apple to an app like Uber and comparing an app developer to an Uber driver who had developed a good relationship with a customer. The customer wanted to start hiring the driver right away, but the hail-fighting company (which Apple represents) asked the customer to keep paying through their app.
Judge Rogers did not seem convinced. Buying V-Bucks through a browser seemed very similar to a passenger paying a driver directly. “There’s nothing about this sales process that worked out differently in your Uber example.”
Evans basically replied that in this analogy, taxi drivers can’t even do the equivalent of giving passengers their phone numbers. “Epic is unable to message the iOS app user telling them that you can go online and get this cheaper.” Or, “I really encourage you to go online and buy V-Bucks,” said Evans. The problem, he said, was the combination of Epic’s commitment to use Apple payment processing and a “whole series of obstacles” that make it harder to tell users they have an alternative.
These anti-steering provisions were already mentioned in the trial – yoga app maker Yoga Buddhi complained about them last week. But this time Rogers offered an obvious follow-up question. If there wasn’t an anti-steering provision, she asked, would Epic still have a problem with Apple’s system? “The customer can choose to stay and purchase through the app or another way, right?”
Evans admitted that non-compliance with anti-steering regulations “would not remove the market power that Apple has here, but it would certainly reduce it.” He said it would be more helpful for some apps than others – it’s pretty good for subscription-based businesses that have a separate website, for example, and less useful for cell-only games that are based on a stream of microtransactions. But he admitted that he hadn’t done a specific study on the subject, so he wasn’t exactly sure How The problem would still be great.
Later that day, economist Susan Athey addressed another issue with the App Store exclusivity. Users can sign up for subscriptions in the App Store. However, if they switch to an Android phone, they will either have to cancel their subscription or continue to manage it through Apple. Athey used this to explain why a third-party app store should be useful if Apple ever allowed one to exist. If you can access the same purchase from both major phone platforms, you can get your old iOS apps the same way you can get your new iPhone, device switching could be a lot easier.
But Rogers suggested again that if developers could just tell people to sign up on the web, “there wouldn’t really be the same need for a cross-platform app store that you’re talking about.” After all, services like Netflix are already telling people to sign up through their websites – Apple and Google just don’t really like it and they try discourage the practice without an actual ban. Much like Evans, Athey acknowledged that there would be a “great benefit” if app makers “made people aware of the most efficient payment methods.”
Athey argued that “consumers get clunky, disjointed and sensitive to delays trying to complete this type of activity,” and that asking users to use a web browser does not solve this problem. But Rogers could easily decide that inconvenience and forced ignorance are separate issues, and that only the latter pose a serious antitrust problem.
The abolition of the anti-steering regulations would be a comparatively small gain for Epic, which wants to provide full-fledged third-party app stores for iOS. But it’s a smartphone ecosystem feature that’s often overshadowed by major antitrust complaints – and Epic v. Apple puts it in the spotlight.