Tuesday, April 13, 2021

New battleground up north: serious challenge to Apple's App Store model must be brewing in Canada as Cupertino is in full defense mode

There are complaints over Apple's abuse of its App Store monopoly around the globe. When I made my own filings with regulatory authorities in January, they contained three pages that merely listed other complaints, investigations, and pending litigation. Less than three months later, I would now have to add a page just to update that list.

Yesterday it became known that Apple's and Google's abuse of their app distribution monopolies even impedes governmental efforts to control the COVID-19 pandemic, as both companies rejected an update to the UK's official contact-tracing app that would have been extremely useful.

I have no idea what's going on in Canada, but Apple must be very afraid of something...

Matthew Ball, a Canadian investor, authored a very comprehensive analysis of the App Store situation (and beyond) in February. That article is definitely one of the most informative and insightful writings on the subject. Yesterday he wrote on Twitter that Tim Cook's interview with the Toronto Star newspaper "suggests significant ongoing concerns" on Apple's part:

It's not just about privacy and Apple's plan to deal major damage the in-app advertising business (in order to force app developers to rely on subscriptions, in-app purchasing, and download fees--the types of revenues on which Apple imposes a tax). On the same day that Tim Cook's Canadian interview appeared, Apple posted a Canada-centric defense of its App Store business model to its website: Apple's iOS app economy drives economic growth and opportunity across Canada

The story mentions some smaller Canadian apps and app development companies: Sago Mini, Ground News, TRU LUV, FILM3D. Apple connects those success stories to Canada's economic recovery from the COVID-19 pandemic: "Canada’s dynamic app economy stands poised to be a competitive and powerful force for job growth as the country recovers from the COVID-19 recession."

What Apple does not say, of course, is that the Canadian app economy would do even better if #OpentheAppStore became a reality. Developers of all sizes would find more and greater opportunities that way. I can't think of anybody who would doubt that the app economy is huge and growing. But I also don't know a single developer who likes to be at Apple's (and Google's) mercy.

It is a bit out of character for Apple to publish a piece like that. Normally, Apple's lobbying takes place behind closed doors. But Apple has come under pressure in so many places--including app store bills in certain U.S. state legislatures--that it's now engaging in the public debate over its App Store model. That fact, in and of itself, shows how muc headway companies like Spotify and Epic Games have made in recent years.

After I saw Apple's Canadian App Store press release, I replied to Matthew Ball: "The combination of the interview AND that press release (see attached tweet) makes it pretty clear they expect one or more challenges to the App Store model in Canada." Mr. Ball apparently agrees with my interpretation of Apple's Canadian campaign (as he liked my reply).

Michael Acton, a San Francisco-based reporter for MLex (one of the leading sources of antitrust news), replied to my tweet on Apple's press release, and I completely agree with him on this:

I guess we'll know soon. Maybe not that soon, but I have a hunch that Canada will become an App Store battleground before the end of the year.

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