Thursday, August 12, 2021

Could a GPL-style contribute-back clause be a reasonable compromise between Apple's walled garden and the Open App Markets Act?

It is interesting to watch how legislative initiatives, antitrust investigations, and litigation reinforce each other. Yesterday's announcement of the Open App Markets Act proposal by a bipartisan group of United States Senators marks a tipping point. It now seems rather unlikely that Apple can maintain its App Store monopoly on iOS. App store diversity is coming.

Apple may still be in a state of denial, and it can hire every lobbyist in DC and Brussels and elsewhere who isn't already working for its adversaries, but the time may have come to think about whether a reasonable compromise is possible.

I'm as independent as an Apple critic and complainant can be, and have recently remigrated to Android, which is the "lesser evil" in terms of the platform maker's control. I wrote my own antitrust complaints and my replies to Apple's (and Google's) responsive filings--every single word. When it comes to patent disputes, I've been sympathetic to Apple's desire for differentiation and to a certain attitude that could be described as exceptionalism. I do, however, draw the line where Apple denies app developers like me certain liberties that I believe are essential and very much in the interest of consumers.

On the one hand, I reject any arguments by Apple that come down to saying that its customers make the choice to deprive themselves of certain choices (such as access to apps not approved by Apple) and that this kind of choice deserves to be protected to the detriment of app developes and of all those Apple users who actually want more flexibility. Among one billion iOS users worldwide, there must be a diversity of views and positions. Even if they had only 1,000 and not 1,000,000,000 users, they wouldn't all share the same values and preferences.

On the other hand, it can't be reasonably denied that the Open App Markets Act in its proposed form would make the iOS app ecosystem less distinguishable from Android. In the end there would be cross-platform app stores, which would minimize switching costs (a consumer benefit) but further blur the distinction between the operating systems.

I don't claim to have the definitive answer, but I do wish to toss out an idea now: a GP-style reciprocity ("contribute back") clause in Apple's future IP license agreements with app developers.

Let me first describe what the net effect would be from a consumer's point of view:

  • There would be more app stores than Apple's App Store.

  • It's possible that competing app stores would undercut Apple's prices and/or outperform Apple on app curation.

  • Some third-party app stores might do a better job serving a particular audience, such as gamers. That's called specialization.

  • Still, under my proposed approach those who are religious about Apple's product philosophy--or simply trust no one as much as they do Apple--would find an Apple-aligned version of every app, except for apps that provide content or functionality Apple categorically disallows, on the App Store. As long as they don't install anything from other app stores, those users could continue to live in Apple's walled garden like before. By choice.

    There are people who don't trust a lot of companies. They are the ones who'd rather buy a new battery for their radio-based car key from an official Mercedes dealership than go to the next Best Buy and get a battery of the same quality at a fraction of the cost. And there are others who subscribe to a philosophy. I want freedom for app developers and users, but I don't want to deprive people of an "all in on Apple" type of choice.

Now some people may wonder how this "best of both worlds" situation could be achieved, given that

  • competing app stores would normally have an incentive to enter into exclusive deals with app makers,

  • some makers of extremely popular apps might leverage those titles to grow their own app stores, and

  • some app developers might for whatever other reason (or just laziness) decide not to submit their apps to the App Store, but only to others (like

The answer is a reasonable "contribute-back" obligation that Apple could impose by means of an intellectual property license.

Reciprocity clauses are found in the GPL (GNU General Public License), which is called a "copyleft" license for that reason and known for Linux (the technical basis of Android) and MySQL/MariaDB, and in the versions of the Creative Commons license that come with the "Share Alike" requirement. Those contractual structures have one key objective: whoever incorporates material into their own works under such a license should have to respect those values not only by lip service but also by contributing back to that values-based community the derivative work.

The GPL doesn't prohibit dual licensing. A long time ago I was an adviser to MySQL's CEO, and that company held all the copyrights (which no single entity does in the case of Linux), so they offered it to the whole world for free under the GPL--with the copyleft string attached--or, if you made a deal with them and paid license fees, you could incorporate it into your own products as a software component without having to publish your source code and allow free downloads.

What I'm proposing here for the iOS app ecosystem bears a strong resemblance to "copyleft" and to dual licensing:

  • App developers would be free to submit a given app to as many iOS app stores as they please.

  • Apple would not "tax" developers' revenues generated via other app stores. (A reasonable developer program fee is not what I mean by "tax.")

  • The values-centric "contribute back" clause, however, would impose an obligation on developers to simultaneously--and in good faith--submit their app to the App Store.

    The only exception would be if an app would undoubtedly be rejected by Apple (for example, certain types of adult content). In that case, a submission to Apple would just waste everyone's time.

    Note that there would be no requirement for the app to be actually approved by Apple before other app stores could carry it. It would be submitted to all stores near-simultaneously (such as on the same day). The requirement is just to submit it in good faith.

  • "In good faith" means that the App Store version of an app would have to be reasonably compliant. For example, if Apple insists on ad tracking ("ATT"), then a submission that flagrantly and unnecessarily violates that rule would have to be considered a bad-faith submission.

This way, competitive constraints would discipline Apple in many ways. If users found the App Store too expensive, or if Apple rejected too many apps that are worth publishing, or if others made themselves a name by outperforming Apple on curation quality, that could reduce Apple's app market share. The number one issue that Judge Yvonne Gonzalez Rogers raised on the last day of the recent Epic Games v. Apple trial is that Apple may compete for end users, but doesn't have to compete for developers. That's why app store diversity is needed. But a "contribute back" requirement to preserve Apple's differentiation and exceptionalism isn't antithetical to competition--and it means more choice, not less, for consumers.

I believe it would be fair to require developers not to charge more for themselves on Apple's App Store than on others. Developers should just say how much they want, and then the different app stores will add their margins on top. (When I do consulting for financial investors through expert networks, it works that way and I don't even know what the markup is.)

To the extent that Apple dissuades end users from granting that ATT permission, apps should be allowed to give users the choice to either enable ad tracking (particularly with a view to rewarded ads, which are key to ad-based games business models) or pay for certain goodies.

Then there's the question of how easy it should be for users to switch from one app store to another if they wish to use a given app on a different app store's terms. For example, they might download a game from Apple's App Store first, but later have an incentive (such as lower IAP prices) to continue playing that game, but redownload it from a rival app store. One would have to think this through, but where there is a will, there is a way. Consumers should have that choice--and app developers should have the right to inform them of the potential benefits, for the sake of having a serious competitive constraint.

Could there be functional differences? Yes. If Apple disallowed something that other app stores permit, there might be additional features once users download an app from another app store. This goes both ways, of course.

Is this going to happen? I'll be perfectly honest: I think the two sides of the debate are so entrenched that in the end there'll be a winning camp and a losing one instead of a win-win-win-win (Apple, developers, consumers who are totally Apple-aligned, and consumers who are not absolutely loyal to Apple). But at least I wanted to outline my thinking, now that Apple may really begin to think about how to mitigate the damage.

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