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In the Land of Trillion Dollar Goliaths | Apple only gave the ground it wanted to

On Thursday August 26th, Apple said it had reached a legal settlement with app developers who alleged the company was abusing its power over the mobile app market. The settlement stirred wildly different reactions from Apple’s critics and fans alike. Some saw a major victory for developers and some saw it as a major concession from the Trillion Dollar Goliath. I’m here to tell you that it was neither of those things.

What ground did Apple give?

Apple agreed to maintain its current flat commission rates and continue to base App Store search results on “objective characteristics” like user ratings and downloads for three years. The company also said it would let developers sell their apps at a prescribed five hundred price points instead of just 100 prescribed price points. Apple also agreed to create a $100 million fund for small app developers and perhaps the most talk about concession of all, developers can now inform users of alternative ways to pay for the app or service other than on their iPhone or iPad. Apple had rules against steering customers to alternative payment systems, but now as long as the developer gets the customer’s permission it can inform them of alternate ways to pay.

Does that sound like “major concessions” to you? Apple says that they were major concessions, but what else would they say? If Apple came out and said we have made a mutually agreeable deal with developers, then those developers would know that they didn’t get the best deal after all. In fact, Apple only gave up ground it wanted to. Apple wasn’t dragged into this deal kicking and screaming, they made this bargain to stave off further action that would result in what developers really want – freedom from Apple’s App Store on iOS with the ability to distribute iOS apps any way they see fit.

The App Association, an organization that claims to give a “voice to small technology companies” but is actually a front for the Trillion Dollar Goliaths like Apple who is a part of the association. “Our members need Apple to continue to lead on privacy, security and safety to preserve the trust consumers have in platforms,” the association said. On the other hand, the Coalition for App Fairness, a group of companies fighting Apple’s monopolistic rule said that the settlement “does nothing to address the structural, foundational problems facing all developers, large and small, undermining innovation and competition in the app ecosystem.” The coalition went on to say that Apple’s restrictions over what developers can say to their customers is stark evidence of Apple’s “inappropriate control.”

Perhaps one of Apple’s most vocal critics, David Heinemeier Hanson, developer of Hey email used some Fight Club analogies to illustrate his points beautifully in the bullet points below:

  • 1) The plaintiffs – here being the actual lawyers in the class-action proceeding, not the interests of the developers they supposedly represent – have justified their pursuit for loot mainly by getting Apple to reaffirm existing policies. Like having them affirm that “at the request of developers, Apple has agreed that its Search results will continue to be based on objective characteristics like downloads, star ratings, …”. So part of this settlement is that Apple says it’ll continue to do search like it’s done so far, and that it won’t make it worse for users and developers by corrupting it with self-dealings and sold preferences, but only for the next three years? What a concession to extract!
  • It keeps going on like this, such as the pointless concession that pricing can now be $40.99 and $41.99, in addition to the normal $39.99 and $44.99, or any other number out of a predetermined 500 price points instead of the previous 100. Talk about the many hues of cornflower blue.
  • But it gets worse, because the trophy of this settlement, as presented in the press, is supposedly that developers can now tell their customers where to buy services outside the app. Except no, that’s not actually what’s happening! Apple is simply “clarifying” that companies can send an email to their customers, if they’ve gotten permission to do so, on an opt-in basis. That email may include information about how to buy outside the app.
  • So the steering provisions of the App Store, that developers are not allowed to tell users inside their app or on the signup screen about other purchasing choices than IAP – the only places that actually matter! – is being cemented with this “clarification”. It draws a thicker line, asserts Apple’s right to steer in the first place, and offers the meaningless concession of opt-in email, which was something developers had already been doing.
  • 2) The legal vultures running this class-action suit knew that all these clarifications and agreements were cornflower blue requests from the outset. The point of the negotiation was never to extract any meaningful change of policy or behavior, but to provide cover for the process, such that they could claim to have performed their judicial duties to the underlying plaintiffs (developers). While walking away with $30M in fees that they took from an Apple-administered charity provision that’s part of the deal.
  • 3) The cynicism of this performance drips in every other sentence of Apple’s press release about the matter. Like the aforementioned sentence about how “At the request of developers, Apple has agreed that its Search results will continue to be based on objective characteristics”. Yes, you can have your search results in cornflower blue. Because they already were! But also, we may change the color in three years. Of course you legal vultures will be long gone by then. You won’t care, we don’t care, this is all a performance of compliance!
  • 4) Since the entire game was rigged for the outcome of having the class-action vultures taking a third cut of whatever settlement sum is included from the outset, Apple knew this too. Negotiating around the specific but meaningless points of the deal was just a way to justify that final outcome: Apple pays these lawyers $30m, such that they can print a press release that gullible journalists will try to spin as having some larger meaning, because that story travels better.
  • 5) The only human response is to show our blood-soaked teeth in disdain for such a blatantly corrupt deal. Developers have suffered a litany of indignities under Apple’s monopoly power over the years, and now they’ll suffer a few more. The twist being that they now come from the hands of a group of legal vultures pretending to advocate on developer’s behalf but are really just paid to collude with Apple.

Unfortunately for developers this settlement cements Apple’s App Store power and nothing of any significance will change. Just imagine if we still had a third mobile ecosystem like Windows Phone, developers would flock to it if Microsoft made it more developer friendly that iOS and Android are today. But alas, we have the mobile duopoly and Apple and Google will continue to wield its power for whatever purpose it sees fit. Apple will say if you don’t like jail (safety) you can use Android, and Google will say if you don’t like freedom (personal responsibility) then you can go to iOS but in the end there is no choice at all.

A former industry insider and tech industry enthusiast.

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