Apple's tardy removal of scam ChatGPT app: broken app review is strong argument for breaking App Store monopolies (as Republican House majority intends)

Yesterday the Coalition for App Fairness quoted (on LinkedIn, and via the Washington Post) from an agenda paper by the Republican majority in the House of Representatives the following action item:

"Ensure app stores are not engaging in unfair or deceptive practices against developers without expansive anti-trust authorities for Chair Lina Khan."

Between the FTC and the DOJ, it's actually the latter that is addressing App Store issues. It would be great if the former at least recognized that Microsoft's acquisition of Activision Blizzard can make a major contribution to the #OpentheAppStores effort. But at this stage that may be too much to ask for.

Some people--including some of Apple's and Google's allies--claimed that the narrow Republican victory in last fall's House of Representative elections would spell doom for a revival of the Open App Markets Act initiative (The Open App Markets Act is dead, long live the Open App Markets Act) during the current (118th) Congressional term. It's not going to be easy to put the OAMA back on the agenda. But it's the best proposal that has so far been made by Capitol Hill lawmakers to "[e]nsure app stores are not engaging in unfair or deceptive practices against developers."

Just asking Apple and Google to refrain from such behavior would definitely not be capable of improving the situation. Hard and fast rules are imperative.

Apple's app review is broken for the combination of three reasons:

• It's simply not practicable without major negative effects on the app development process and on many app developers' businesses to have a single company review all apps, and to have more power than governments as rulemakers on what apps (and functionalities) are acceptable.

• Despite its huge levels of profits, Apple employs only a fraction of the number of app reviewers as Google. As an app developer I got the impression that Google--whose app review rules I've also complained of--has developed some better tools for automating parts of the review process, just based on the material (screenshots etc.) that Google sent along with rejection notices.

• Apple's app review is just about enforcement of rules--rules that are largely just designed to strengthen Apple's strangehold on the app economy and to maxmimize user lock-in. If you submit an update to an existing app with new features, they won't care unless those features relate to their economic interests. The moment you create a new in-app purchasing (IAP) item, app review will take longer because taxing app developers is what Apple's app review is primarily about. In one word: greed.

Former app reviewers have criticized the state of affairs. I don't doubt that many of the people working in that department would like to do a good job, but Apple's priority number one is not to do what's best for end users. The only solution is to have third-party app stores so there will be competition among multiple app stores not only on price but also on the quality of app review.

As TechCrunch and others reported, Apple's App Store and the Google Play Store were "flooded with dubious ChatGPT apps": apps that charge end users looking to find a ChatGPT app, which its maker (OpenAI) hasn't published so far. Those apps then monetized ChatGPT through IAP offerings, when in reality anyone can use ChatGPT for free via the web. Some of that scam reached the top of the App Store charts.

After those reports were published, Google reacted, but Apple was slow to respond even with respect to the most successful one of those apps:

Not only is this rip-off app still live on the @AppStore, but Apple's App Store is still running its ad campaign to scam more users. Meanwhile, @GooglePlay seems to have taken the app down.#ChatGPT pic.twitter.com/cUpyPXH6yj

— Mysk 🇨🇦🇩🇪 (@mysk_co) January 10, 2023

As Mysk noted on Twitter, the App Store was even showing ads promoting that app while there were media reports out there flagging the issue:

Now the fake ChatGPT app is gone. But it's kind of funny that while tech websites were warning about this scam, the @AppStore was still showing ads promoting this very suspicious app. It's worth mentioning that @GooglePlay reacted swifter and took the app down first. pic.twitter.com/i0Z5MvndfL

— Mysk 🇨🇦🇩🇪 (@mysk_co) January 10, 2023

TechCrunch updated its article to mention the belated removal of that app, but mentioned that plenty of other apps referencing ChatGPT still remained on the App Store.

It's typical of tyrants that instead of putting out fires quickly, they're too busy celebrating themselves, as did Apple's Eddy Cue in his reflections on last year. No one would deny that the App Store has made a lot of money. It's just that if Apple was not abusing its aftermarket monopoly, app developers would be able to invest even more and customers would get better products at lower prices. If the iPhone had never been created, it might have taken another five years or more for touchscreen phones without physical keyboards to succeed, but it's not realistic that it wouldn't have happened at all. Google showed, albeit as a fast follower, how easy it was to quickly implement that kind of user experience, and Apple's patent assertions failed to kneecap Android. Now, the situation Android is only gradually better, and in my previous post (on Google's efforts to get the enforcement of an Indian antitrust ruling stayed) I stressed the importance of a level playing field for third-party app stores on Android. One company's unreasonableness doesn't justify the other's similar conduct. It would have been possible to have a mobile revolution without an app tax and without an app review tyranny.

Will Apple apologize for having enabled and promoted the scam, and will it automatically refund iPhone and iPad users who were ripped off?

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Developer class action settlement with Google over Google Play tax on Android apps: same sham as in Apple App Store case, offers material benefits only to monopolists and lawyers--meanwhile, new consumer class actions filed in Australia

I don't mean to engage in media bashing, especially not in connection with mobile app stores where press coverage has really informed many people of the serious issues affecting my fellow developers and me. But Elon Musk does have a point about class-action law firms (often) being "the real plaintiffs, not the puppets they find to masquerade as such":

The press always plays along with the class-action law firms, who are the real plaintiffs, not the puppets they find to masquerade as such. Why is this?

— Elon Musk (@elonmusk) June 4, 2022

When class actions are brought against large corporations, they usually appear more formidable than they ultimately turn out to be. In-house lawyers often tell their colleagues in charge of running the business to keep calm because "it's just another class action." In other words, it's only going to be about money, particularly for the lawyers.

However, sometimes good things with a structural effect do come out of class action lawsuits. In the app store context, the Pepper v. Apple case is a great example: it went all the way up to the Supreme Court, which (unlike Judge Yvonne Gonzalez Rogers, and only by a narrow vote) determined that iPhone users are directly harmed by--should there be any--monopoly abuse by Apple in the form of excessive App Store commissions. In a way, Epic Games then jumped on the bandwagon and brought its own cases against Apple and Google, knowing that the class actions (from which Epic opted out as it had to) were not going to be the definitive answer.

Having said that, here's the latest development in mobile app store class actions--a motion for preliminary settlement approval in several cases targeting Google over its Google Play Store terms and practices in the Northern District of California:

https://www.documentcloud.org/documents/22077056-22-06-30-app-developer-class-action-v-google-motion-for-preliminary-settlement-approval

This motion didn't come as a total surprise: a May 25 filing had already announced that an agreement on the principal terms had been reached, and the original plan for last night's motion was to be submitted two weeks sooner.

Those class actions were consolidated with the far more serious cases brought in the same district by Epic and the attorneys-general of 36 U.S. states. There's now going to be some back and forth about whether the settlement should be approved, but it's unlikely that the court will say "no, you gotta keep litigating."

There was also a lot of outrage at a similar deal (involving partly the same people) with Apple, such as a statement by the Coalition for App Fairness, from which I'll quote now because this equally applies to the structurally very similar proposal for a class action settlement with Google:

"Apple’s sham settlement offer is nothing more than a desperate attempt to avoid the judgment of courts, regulators, and legislators worldwide. This offer does nothing to address the structural, foundational problems facing all developers, large and small, undermining innovation and competition in the app ecosystem. [...] We will not be appeased by empty gestures and will continue our fight for fair and open digital platforms."

Just like in the Apple case, it's about

• roughly $100 million to be distributed to small developers,

• meaningless promises (for instance, Google won't backtrack on its small business program for the next few years, which I'm sure it wouldn't have intended during that timeframe at any rate), and

• above all, it's about this:

  "Plaintiffs will make a request for attorneys’ fees of up to $27 million, which represents 24% of the sum of the cash Settlement Fund ($90 million) and structural relief ($22 million) that can be reasonably quantified ($112 million total). This does not account for the other forms of structural relief that were likewise included in the Apple settlement and found, at final approval, to be 'valuable to the settlement class.'" (emphasis added)

What could be more befitting of a sham settlement than seeing Google--the company that says it manages the world's information--not even getting the date of its blog post on this deal right? Look at this screenshot (I'm pretty sure they'll fix it shortly, but I took this screenshot around midnight Pacific Time with Chrome for Windows):

The post was made on June 30, but Google (until they fix(ed) it) said July 30.

The real issue, however, is that this is simply a cheap way for Google to be let off the hook and to make it look like the issues that Epic and 36 state AGs are still suing them over have gone away--which they haven't.

The blog post says this about the lower commission rate for little guys:

"To continue to provide developers with a tiered pricing model, we’ll maintain Google’s 15% commission rate for the first $1 million in annual revenue earned from the Google Play Store for U.S. developers, which we implemented in 2021."

What Google omits there is that it's only a short-term commitment. The court filing itself says this:

"The Settlement requires that Google maintain this program for U.S. developers through at least May 25, 2025." (emphasis added)

Like in the Apple case, some out-of-app communication with users will be allowed. With respect to how little value that has, may I just refer you to the Coalition for App Fairness statement mentioned further above.

Google is also leveraging this settlement to make it sound like alternative app stores had a level playing field on Android:

"In new versions of Android, Google will maintain certain changes implemented in Android 12 that make it even easier for people to use other app stores on their devices, while being careful not to compromise the safety measures Android has in place." (emphasis added)

With that safety (security) pretext, Google can still strongly discourage users from using other app stores than Google Play, or "sideloading." Let's again take a look at what the actual court filing says:

"Competing Stores. Developer Plaintiffs have alleged that one impediment to distributing apps outside of Google Play is that apps downloaded from other Android app stores do not automatically update. [...] The Android 12 operating system, released by Google on October 4, 2021, facilitates auto updates by allowing 'installer apps to perform app updates without requiring the user to confirm the action.'" (emphasis in original)

So this is about a feature that is almost a year old. I'm not saying it's totally useless. But this falls far short of addressing the host of issues identified and tackled by Epic and the 36 states.

Google also promises to do something it hasn't done yet, but which I'm pretty sure it intended to do at any rate:

"One of the most significant challenges for small developers is getting their apps discovered. The Settlement improves discoverability by requiring Google to create an 'Indie Apps Corner' on the apps tab on the U.S. homepage of Google Play and maintain it for at least two years following final approval. [...] This feature will spotlight a revolving roster of apps created by independent and small startup developers. Developers within the Settlement Class will be able to submit their apps for inclusion in the Indie Apps Corner, and Google will select qualifying apps based on objective criteria."

This isn't bad at all, but again, the issues are so fundamental that they can't be cured with cosmetics. Also, in my experience, "objective criteria" for app review (whether for the purpose of approval or for the selection of apps to be showcased) don't really exist beyond whatever may be measurable, such as memory footprint.

There's also an item that Google doesn't even mention in its blog post:

"For at least three years from final approval, Google will publish an annual 'transparency report' that (at a minimum) will convey meaningful statistics such as apps removed from Google Play, account terminations, and objective information regarding how users interact with Google Play."

The bottom line is that class action lawyers and Google have agreed on a window-dressing package. The primary beneficiary are the lawyers; the secondary one is Google, which saves litigation costs, avoids the risk of potentially having to pay really large amount to developers (as most developers will likely not care to opt out of the settlement) should Epic and the 36 states prevail, and will way overstate the significance and usefulness of those promises.

Meanwhile, Apple and Google have been slapped with new class action lawsuits in Australia.

The Australian Financial Review was first to report (though largely behind a paywall) on "twin legal actions" against Apple and Google brought on behalf of Australian consumers, arguing that Apple and Google are charging excessive commissions on in-app purchases, which consumers end up paying for. That's the same kind of argument as in the Pepper v. Apple case I mentioned further above.

News.com.au picked up the story as well.

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ACT | The App(le) Association claims to represent thousands of small developers, but in Twitter debates they are supported only by employees, service providers, other pro-Apple lobbyists

From time to time it's unfortunately necessary to expose astroturfers. As someone who has published apps, and has a new one (a productivity app) in the works, the kind of astroturfing that offends me more than any other is when lobbyists for Apple and/or Google claim to defend our interests.

I'm sure many Ukrainians would be offended if a bunch of lobbyists funded by Russia were running around in D.C. and Brussels, claiming to be representing the Ukrainian population at large while arguing that Ukraine drew first blood and has no right to exist other than as a Russian oblast or in the form of a few "autonomous" regions with close ties to Russia, and saying that Ukrainian citizens want the West to let Russia get its way because it will be better for ordinary citizens. The outrageous part about that would not (only) be the messaging, but the false representation of masquerading as representatives of victims.

Masquerading as representatives of victims is at the heart of the kind of astroturfing we see happening in connection with initiatives to open up app markets. The story is that whether it's Apple's (or Google's) app tax or heavy-handedness, it's all in the best interest of the little guys.

A significantly less appalling--but equally untrustworthy--ploy is to lobby for the devaluation of standard-essential patents (SEPs) based on false claims that small app developers struggle to deal with SEP licensing or litigation. That's like saying that low-income workers have a problem with regulation relating to private jets: they're not affected, so the claim makes no sense, but at least they aren't victims of those funding the campaign. They're being used, but not against their own interests--just for someone else's interests of a kind that doesn't matter to them.

A few months ago I had a conversation with a policy officer of one of the other large corporations supporting ACT. By now it seems it really is mostly Apple who's footing the bill and setting the agenda, but they're not alone (yet). When ACT came up, I criticized that company for supporting an organization that claims to speak on small app developers' behalf while actually working against them (and for Apple). The excuse was this: "But in the SEP policy debate we are faced with all those professors who are funded by Qualcomm." Qualcomm does fund a lot of academic research--very transparently so. What has not been shown is that it leads professors to agree with Qualcomm: they may harbor those views anyway, and Qualcomm just enables them to do more work on the subject of SEPs. But the fundamental difference is that those professors speak for themselves as researchers, as do others who agree with Apple and its SEP devaluation friends. Those professors don't claim to have a mandate from other stakeholders, much less from the victims of a digital tyranny.

This week there's been some Twitter debate between ACT | The App Association--more appropriately called ACT | The Apple Association--and Epic Games CEO Tim Sweeney, who picked up an ACT tweet attacking the Epic-founded Coalition for App Fairness (CAF) based on a quote from an Epic Games v. Apple court document:

Apple's fake small developer lobbying group goes on the attack and it's getting spicy! Check it out below! https://t.co/GKM2yeRWHJ

— Tim Sweeney (@TimSweeneyEpic) June 22, 2022

Is the pot calling the kettle black and vice versa? Not really. ACT has no more legitimacy for the claim to speak on small developers' behalf than Apple itself would have. The CAF, however, does represent actual app developers, all of whom are listed on the organization's website and--as far as I know--every single one of whom pays membership dues, which is more than ACT can say. It's true that some Epic-internal documents surfaced in the Epic Games v. Apple dispute that I never liked. For instance, the plan was for the CAF to raise App Store issues whether real or "manufactured." However, the CAF has now been around for about two years, and even though I'm reading their messages on Twitter, LinkedIn, and their website, I haven't spotted a single "manufactured" issue.

There's a host of real (and serious) issues surrounding app store governance--no need to make up any additional ones. That's why I would attribute the questionable passages of those 2020 documents to a lack of experience coupled with an excess of zeal. Whatever the intentions behind the creation of the CAF may have been, let's judge the entity by its track record of now approximately two years. As long as the CAF continues to truly advocate the interests of developers of all sizes, and raises actual (rather than manufactured) issues, it doesn't matter what someone at Epic may have written two years ago--and falls far short of what would create a situation of the pot calling the kettle black.

Mr. Sweeney effortlessly ratioed (click for an explanation of the term)--sometimes also spelled "ratio'd"--ACT. His tweet got a couple hundred likes vs. ACT's (by the time I write this line) 35 likes, a high percentage of which came from ACT employees and other pro-Apple lobbyists.

One of the 35 likes of ACT's tweet and an immediate response to Mr. Sweeney came from an account named "Chris Sims is Agile" (@chris_is_agile):

"Bless your poor little billionaire heart. You’re supporting legislation and policies that are fundamentally toxic to the safety of the American free market. I’ve been connected with @actonline for sometime [sic] and they have done far more to make a better world than you!"

Mr. Sweeney's billionaire status is unrelated to the merits of his positions on mobile app distribution as long as the positions he takes benefit developers of all sizes, which has been the case so far. It's a transparent distraction from the real issues, and consistent with what ACT's president Morgan Reed told Mr. Sweeney:

Enough with the bullying and insults. We get it, you want to make more money for the same work. Who doesn’t? But we are not going to support bills that make you richer at the expense of the rest of us. 1/ https://t.co/llFJZMgYXs

— Morgan Reed (@morganwreed) June 23, 2022

It's just absurd to argue that legislation like the EU's Digital Markets Act (which is soon going to be adopted) or the Open App Markets Act, for which there is ever more support among Capitol Hill lawmakers, makes Epic richer at the expense of small developers. No developer can have an interest in being taxed by the world's richest corporation, or in apps being rejected by Apple for reasons other than being malware or out of compliance with applicable local laws.

So, @chris_is_agile basically echoes ACT's "argument" in different words. Mr. Sweeney, for good reason, mocked @chris_is_agile as follows:

Thanks for sharing your authentic views, totally disinterested commenter whose Twitter feed is mostly comprised of app distribution monopoly advocacy material.

— Tim Sweeney (@TimSweeneyEpic) June 23, 2022

A fact check shows Mr. Sweeney is right and @chris_is_agile doesn't make ACT's claim to represent small app developers any more credible. If ACT really did represent approximately 5,000 small app developers, we'd see true developers (who've actually published apps) supporting ACT and its leadership.

"Chris Is Agile" has a website, which links to other pages. His YouTube channel has--lo and behold--32 subscribers (as we speak). The "Upcoming Classes" link appears broken (404 error; I tried more than once). SIGAO Studios is a service provider ("Our team specializes in breaking down business problems, identifying high value targets, and creating technology solutions that meet the needs of our customers"). And Mr. Sweeney is right about the content of Mr. Sims's Twitter feed. I just checked on the Tweets & Replies page of his profile, and at this point (approximately 8:30 AM EDT on June 25), the most recent 50+ tweets are related to the debate with Mr. Sweeney that I just mentioned; then a couple of retweets of ACT's Morgan Reed's statements on app distribution; and so it goes. Then, finally, I could find a few tweets (including retweets) related to Scrum training (Scrum is a means of managing software development projects in an "agile" fashion), followed by--again--various tweets over the course of the previous month relating to ACT's work, mostly its opposition to the American Innovation and Choice Online Act.

It's interesting to see that those standing up for ACT are typically service providers, not actually organizations publishing their own apps. Even in the SEP context, the app developer ACT's Save Our Standards campaign presented was just a contract developer for others. And now there's this @chris_is_agile account, which apparently belongs to someone who works as a consultant and trainer in the Scrum context.

I'm not going to believe ACT that they truly represent small app developers (or IoT companies, which they claim in connection with SEP licensing) until they start taking positions against Apple on at least some important issues where doing so is in the interest of developers. There is no indication whatsoever of those "members" paying any membership dues--they may just have filled out a web form to subscribe to a newsletter, which is the closest thing to a membership application process.

Only recently have I found such a thing as a membership directory on ACT's website--but there's no reason to believe ACT's claim that they represent 5,000 small app developers. All one can find right now on the "Members" page of ACT's website is 38 company logos, and a number of them describe themselves as service providers:

Accedia ("Services: Consulting, Applications, Operations, Outsourcing"); innovify ("we build your #Web3 products for your business"); synesthesia (they create marketing campaigns); appsgarden ("software development ... We will make your ideas work!"); Concentric Sky ("product design and realization", "we excel in building end-to-end solutions"); SheerID ("collect customer data you can trust and create bold campaigns with SheerID's Identity Marketing platform"; Dogtown Media (app development for hire); Project Hosts ("providing Cloud Compliance-as-a-Service on Microsoft Azure for the US Federal government, healthcare organizations, and ISVs"); Colorado Technology Consultants, Inc; MotionMobs (yes, the contract developer who incredibly claimed to have a SEP licensing problem); SouthernDNA ("Atlanta-based digital agency"); devscale ("we build your software"); BadVR (immersive analytics platform); CannedSpinach ("we supercharge businesses to tackle their problems using strategy, technology, & design"); SentryOne ("provider of database performance monitoring and DataOps solutions"); 1564B (Marketing, Content development Speaking & Writing); bridge the gaps (digital education); TelemetryDeck ("a service that helps app and web developers improve their product by supplying immediate, accurate analytics data"); Nebula Labs ("we deliver top quality digital solutions"); Layers ("Layers helps its clients design and develop their brands and products"); and LoopCycle ("we help commercial equipment manufacturers and operators trace, manage and recover physical assets").

ACT has no reasonable basis to claim to speak for a $143 billion ecosystem.

By contrast, the CAF's membership includes companies whose apps everyone knows, such as Epic (Fortnite), Spotify, Match (Tinder etc.), and Tile. And they don't claim to represent 5,000 others without listing them.

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Apple App Store critics lose another key player as head of Epic-Spotify-Tinder Coalition for App Fairness gets hired away by major brewery only three months after Spotify's top lawyer left for Disney

App distribution on iOS must open up--the question is just how, when, and where. In the Netherlands, Apple has just set the stage for another round of litigation with antitrust authority ACM by way of a new proposal it submitted this morning. In the U.S., its response to the Epic Games v. Apple Ninth Circuit appeal is due on Thursday. And while Apple is standing its ground, its adversaries are two strategic thinkers down compared to where they stood a few months ago.

In December it became known that Horacio Gutierrez, a former Microsoft IP chief whom I've known for well over a decade, was leaving Spotify to become Disney's top lawyer. Horacio was an incredibly effective and persistent advocate of the cause to open up app distribution on iOS. At Disney he's now going to have other priorities. Disney's relationship with Apple is hugely better than Spotify's.

And a few hours ago, Meghan DiMuzio--the first Executive Director of the Coalition for App Fairness (whose key members are Epic, Spotify, and Tinder operator Match Group)--confirmed on LinkedIn that she "couldn’t be more excited to join [brewery giant] Anheuser Busch to lead their corporate reputation efforts."

Formally, she worked at Forbes Tate, a major lobbying firm that effectively runs the CAF for Epic, Spotify, and Match Group. Her deputy Hannah Ricketts--also a senior director at Forbes Tate--recently explained the CAF's position on Apple's efforts to avoid giving app developers viable alternatives to its 30% tax (I disagree at least with respect to the situation in the Netherlands):

CAF deputy director, Hannah Ricketts, breaks down @downdogapp’s experience with @Apple’s anti-competitive practices in the #AppStore: pic.twitter.com/dqyk7CsN80

— Coalition for App Fairness (@appfairness) March 16, 2022

The career changes by Horacio Gutierrez and now also Meghan DiMuzio definitely weaken the Coalition for App Fairness, and it seems that the CAF's backers don't do enough to keep their key players on the team. But even Apple has a brain-drain problem as its long-time head of litigation Noreen Krall left a few months ago--just shortly after Apple's remarkable post-trial victory over Epic.

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Tinder pricing scandal: Dutch regulator should also investigate Apple antitrust foe Match Group if 'C' in 'ACM' truly stands for Dutch 'Consumers', not American 'Companies'

Who is hurting consumers more:

1. a dating-app maker that clandestinely charges some of its users up to five times more for the same service than it charges others; or

2. a smartphone operating system maker that transparently and consistently imposes a 30% tax on payments in dating apps (and roughly the same for out-of-app payments)?

Sorry to say so: even a vocal App Store critic like me can't possibly answer the question with "Apple."

Unfortunately, the correct answer is a company that co-founded the Coalition for App Fairness. How is it fair to intransparently charge some users five times more than others, for the very same thing?

Next question; closely related to the first. Who is helping consumers more:

1. non-profit foundations Mozilla and Consumers International, who investigated Match Group's pricing strategies and proved that "Tinder Plus can offer up to 31 unique prices in a single country, and that older users are often charged more" (and that "Tinder's opaque, unfair pricing algorithm can charge users up to five times more for same service"); or

2. competition watchdogs who fire cheap shots at Apple with legally and technically questionable allegations of non-compliance with a ruling that Apple has every right to appeal?

Admittedly, it was a leading question, but that's because the facts are what they are.

Double standards never work in the long run. At least not in competition policy and enforcement.

On the one hand, something must be done about Apple's App Store monopoly. The iPhone maker continues to drip-feed us with microscopic concessions such as removing a prohibition of app transfers from its requirements for getting a small business discount. The real issue--which is app review and, therefore, the unavailability of alternative app stores--is still far from being tackled other than through some legislative initiatives.

On the other hand, this doesn't mean that anything "anti-Apple" is necessarily meritorious, much less principled.

The Dutch Autoriteit Consument & Markt (Authority for Consumers & Markets; ACM)--sort of the Dutch equivalent of the United States Federal Trade Commission--has the potential to make a very significant contribution to the fight against the mobile app store duopoly if it makes prudent decisions that other jurisdictions adopt. Also, EU competition chief Margrethe Vestager is wielding a huge stick, though she has so far not used it much against App Store abuse (other than the Statement of Objections in the Spotify case, which is good but limited to direct competition by music streaming app makers with Apple). But both the ACM and Commissioner Vestager, whose condemnation of Apple's alleged non-compliance with the rule of law actually raises some rule-of-law questions in and of itself, should really think again--and think hard--about whether it reflects sound judgment to be in the tank for Tinder maker Match Group against Apple even to a post-factual extent and while turning a blind eye to Match Group's own questionable practices that harm consumers.

Dating apps were never the most uncontroversial app category to begin with. Why did the ACM focus on that field--when there is no reason why the Netherlands would have to care more about dating apps than literally any other country in at least the Western hemisphere? It's a bit of a mystery. But I'd have welcome anything that helps address the App Store situation, hoping that whatever works in one segment of the app market today may work in another--or all others--tomorrow.

Tinder's chief lawyer testified in the U.S. Senate that Match Group's apps are all about building "meaningful relationships," which is the height of hypocrisy not because I would (as I could not) deny that meaningful relationships indeed come into being as a result of online dating--but because that's just a part of the picture. The fact of the matter is that a lot of it is about cheating on partners, and the line between dating and prostitution is blurred. Yeah, maybe Match Group has some rules that users theoretically get thrown out if they ask for money, but do they enforce those rules vigorously? Weren't their credible media reports at the start of the pandemic that restrictions on a certain industry resulted in parts of the world's oldest profession increasingly going about their business via dating platforms?

Furthermore, just like Apple's app tax is arbitrary, so are the fees charged by services like Match Group's Tinder. They exploit network effects, just that compared to Apple they've made a negligible contribution to innovation. Chances are Apple innovates more on any given day than Match Group did in its entire corporate history.

Sure, dating apps can serve a wonderful purpose, and I'm not a hypermoralist, but Match Group distorts the reality of online dating in general and its own services in particular.

Even if we assumed for the sake of the argument that Match Group is eligible for sainthood among dating-app makers, the pricing scandal that Mozilla and Consumers International uncovered is truly shocking.

The Dutch ACM is not just an antitrust enforcement agency. They have a broader mandate, which is why I likened them to the FTC. They do look into all sorts of issues. Now, the problem they are facing here is simply this: people wonder why they are pursuing their Apple case at all, given that it benefits Match Group and a few other foreign companies, but no major Dutch player, and the answer is the "C" in the Autoriteit's name. The argument is that it's about Dutch consumers. Now, if there is one huge problem affecting dating-app users in the Netherlands that is worth looking into and addressing, the ACM should follow up on Mozilla and Consumers International's first-rate investigative work. Those non-profits do the job that organizations like the ACM should be doing in terms of "your tax dollars (or euros) at work."

They're not going to abandon their App Store case, and I wouldn't even want that. But they should sit back and think again. They should keep a low profile in this enforcement context because Apple's requirement for submitting a separate app for the Dutch market is reasonable even in the eyes of an Apple critic like me. Commissioner Vestager supported the ACM in her recent Berkeley speech despite DG COMP neither having reached any conclusion on the App Store (not even in the Spotify case) that comes close to the underlying Dutch ruling nor DG COMP having to resolve that Dutch enforcement dispute (which will be for Dutch courts, and possibly the European Court of Justice if a question of EU law needs to be sent to Luxembourg).

Maybe the Match Group case against Apple in the Netherlands isn't all that great, neither legally nor technically or politically. Maybe it's like a company putting out a first product and then doing better on the second. There are presumably plenty of complaints, some of which will relate to app categories with a much better reputation and will come from companies that don't charge up to five times more if an older user pays for a particular service than if a younger one does, without at least telling everyone that this is the case.

The ACM should build a better story, a better case, and ultimately impose better remedies--remedies that can clearly be enforced in a way that makes a positive impact. Apple is playing sort of a legalistic game, but it's a pretty universal rule--which the European Commission is also perfectly aware of--that if someone has to comply with a ruling, anything counts as compliance that is not based on a wholly unreasonable interpretation or application of the underlying decision. The standard is not whether another position may make more sense. I would even agree that the ACM's apparent position on what Apple should be doing in the Dutch dating-app market is more reasonable than Apple's--but that doesn't make Apple's wholly unreasonable.

Regrettably, the Tinder pricing scandal is also unhelpful to Epic Games. The Fortnite maker co-founded its Coalition for App Fairness with Match Group and Spotify. It's bad enough that an amicus brief proposed by the CAF was rejected by the United States Court of Appeals for the Ninth Circuit, the most important regional appeals court in the world--it's arguably more important to the global economy than almost any national top court. Now a CAF co-founder faces a major credibility problem when it comes to the question of who really overcharges app users.

It didn't help Epic that some internal emails surfaced in the Apple litigation that called its motives into question. But that was really just anecdotal evidence as Judge Gonzalez Rogers called it toward the end of the trial. And Judge YGR may dislike impulse purchases, especially by (Fortnite-playing) kids, which is why she sort of invited litigation against both Apple and Epic over that question. Then dating apps are also about impulse purchases, and there is no type of purchase where transparency is more critical than (in-app) impulse purchases.

As an advocate for the rights of app users not to be overcharged by abusers, Match Group has zero credibility left. Literally zero. This will have major ramifications also for its lobbying efforts. Hopefully more companies will advocate for App Store reform--companies who really practice what they preach when it comes to "App Fairness." If they're large and have been around for a long time, someone will always find something to criticize about what they did, even if it happened ages ago--but at least they shouldn't be App Unfairness hypocrites.

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Biden Administration backs Epic Games against Apple in Ninth Circuit #FreeFortnite antitrust appeal (though brief is formally filed 'in support of neither party')

Wow, this Epic Games v. Apple thing is getting better and better...

In my previous post I already described the tremendous support Epic Games got against Apple in its Ninth Circuit antitrust appeal from amici curiae (most notably, 35 U.S. states, Microsoft, and the Dean of American Antitrust Law) as an 8 out of 10, and said the following:

"It would only have made the case stronger if companies like Facebook or even Tesla (Elon Musk is clearly on Epic's side, though Tesla would have had to come up with a good explanation as to why it cares) had made submissions, and if the Biden Admistration had stepped in, though 35 states (red and blue ones alike) are a powerful political alliance and make this a bipartisan issue." (emphasis added)

My #1 wish was granted--I just didn't know it when I wrote the above sentence :-)

The Antitrust Division of the United States Department of Justice, speaking on behalf of the United States of America, has filed the following brief, formally in support of neither party but practically supporting some of the most important elements of Epic's appeal (this post continues below the document):

22-01-27 United States Acb ... by Florian Mueller

I'm so happy. But why is this great if the front page says "in support of neither party" instead of overtly backing Apple? Let me explain:

• A brief in support of Epic has to urge reversal on the Sherman Act counts. The filing by the federal government on behalf of the United States says: "The Court should ensure that the Sherman Act is not unduly narrowed through legal error." In other words, the district court should have side with Epic on more legal questions than it did.

• It's politically always easier in an inter-company conflict for the U.S. government to just focus on issues and not throw its weight behind one party.

• Technically speaking, Apple could still win even if the United States Court of Appeals for the Ninth Circuit agreed with the United States government on all of the issues it addresses. A chain is a strong as its weakest link, and the U.S. government addresses almost everything that matters, but Apple would still have a path to victory under the rule-of-reason analysis (while all the amicus briefs in Epic's favor also urge reversal of that one). It's not, however, like the DOJ-ATR filing would automatically make Apple a winner: the government simply doesn't address certain other aspects, which doesn't mean it agrees with Apple on them (most likely, it doesn't).

Like others, the DOJ-ATR argues that Section 1 of the Sherman Act should apply even to contracts of adhesion that are unilaterally imposed by one player. I still don't agree, but I wouldn't mind if that was the ultimate outcome.

But the United States also helps Epic with respect to Section 2, disagreeing with the district court's market-power analysis.

And market definition comes up. That's the strategic battlefield here, really, also with a view to other App Store issues than just Epic's case. Now, one can reasonably read the federal government's submission as being--between the lines--sympathetic to even a single-brand market definition. That's because the very first step of the single-brand market analysis (Kodak, Newcal) also relates to whether Epic was right when it said there was an operating system (iOS) foremarket (and then an app distribution aftermarket). On this one, the United States supports Epic, though other hurdles remain and are not addressed by the brief. Furthermore, the DOJ supports Epic on tying.

Jonathan Kanter, the Assistant Attorney General in charge of the Antitrust Division, did not sign the brief in his own name. People working for him did. I attribute this to a simple fact: he used to be (until his appointment to his current post) counsel of record for the Coalition for App Fairness, an Epic-founded organization that supports Epic in this context. By becoming a signatory in his own name, he'd have invited allegations of a conflict of interests. Similarly, his predecessor Makan Delrahim didn't put his name on the DOJ's filings in support of Qualcomm (his former client). Apple is a bit out of luck with Antitrust AAGs: when their main rival was Qualcomm, Makan Delrahim was at the helm of DOJ-ATR; and now that Apple's primary rival is Epic, there's a former CAF counsel in charge.

What an incredible backing Epic has received. I upgrade my rating from 8/10 to 9/10. I'd still have liked to see companies like Facebook, Tesla, Activision-Blizzard chime in. But can't have everything. And there's still a couple more hours for more filings.

Apple should alter course. Why does it have to be the Evil Empire? The tyrant who makes app developers' lives miserable? Time for change, and I don't see why such change couldn't still happen under Tim Cook.

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Mixed news for Apple: App Store accusers lose their most effective voice as Spotify's top lawyer Horacio Gutierrez joins Disney--but State of California may support Epic Games on appeal

Yesterday I saw on LinkedIn that Horacio Gutierrez is leaving Spotify. He served as Spotify's Head of Global Affairs and Chief Legal Officer for six years after a long and successful career at Microsoft where he was basically the #2 lawyer (and would easily have become #1, but Microsoft already has the one and only Brad Smith). Now he is joining Disney as General Counsel and Secretary (press release on BusinessWire).

Horacio and I didn't always agree. We've known each other for well over a decade, and about each other for even longer as we were on opposing sides of the European software patent-eligibility debate in the early to mid 2000s. Even when we were partly aligned, we weren't of exactly the same opinion. But as an app developer (currently working on a new app, not a game this time) I'm profoundly disappointed because this means the App Store-critical movement loses the most effective and forceful advocate it ever had. There are some other people I consider similarly important, but at least for now they are acting in the background.

Disney also faces the gatekeeper problem of mobile ecosystems (Apple's and Google's "vice-like"--maybe they meant "vise-like"--grip that the UK's competition authority called out this month), but at least for the time being and probably for the foreseeable future, they're nowhere near as antagonistic as Spotify. Apple's insatiable appetite for grabbing additional revenue streams by leveraging the monopoly power it enjoys in its single-brand aftermarket make it a possibility that Disney, too, will feel as threatened by the app distribution duopoly as Spotify, but it's not sure to happen, and not on the horizon for now.

Horacio's career move is a great opportunity for him, possibly a childhood dream-come-true, but leaves a gigantic vacuum. This is the second major loss for the Epic-Spotify-Tinder Coalition for App Fairness this month. The first blow was when the CAF was stigmatized as a lobbying front that saw an amicus curiae brief rejected by the most influential regional appeals court of the United States, the Ninth Circuit (despite the normally rather permissive practice when it comes to accepting such submissions).

Spotify, which has to compete with Apple Music on the exact opposite of a level playing field, was the first major app developer to make a strategic (in that regard, Epic has room for improvement) effort to instigate antitrust investigations and legislative initiatives targeting Apple's abuse of its App Store monopoply. Spotify launched a website--Time to Play Fair--that raised issues hardly anyone out there was aware of. I doubt they reached huge numbers of people, but certainly some of the powers that be. Constant dripping wears away the stone, while Epic's more "explosive" and dramatic approach apparently wasn't to Judge Gonzalez Rogers's liking and may not be viewed favorably by the appeals court either.

Horacio started writing letters to Apple in which he (rightly, in my opinion) accused Apple of antitrust violations and demanded a change of behavior. At some point, parts of the correspondence were leaked by the parties (first by Spotify, then by Apple) to the media. Those kinds of exchanges are a prelude to formal antitrust complaint. Spotify brought an EU antitrust complaint against Apple a few years after Horacio had joined. In 2020, the EU launched formal investigations, and this year handed down a Statement of Objections (SO), which is like a preliminary ruling. I'm concerned that it's "too little, too late" if competition enforcement limits itself to cases in which Apple directly competes with other companies, and Spotify is a subscription business, so any remedies might ultimately not benefit those of us who rely on in-app purchasing. My next app will have a subscription model, but also IAP offerings.

Shortly before the Epic Games v. Apple trial, the United States Senate held a hearing on mobile app stores and the need for supplementary legislation designed to specifically address those issues (on top of generally strengthening antitrust enforcement, which is also badly needed). Horacio was clearly the most persuasive panelist, owing to the unique combination of Spotify being a prime victim of Apple's misconduct and Horacio being so strong. He was authentic and sophisticated at the same time--it was really great to watch his performance. He apparently anticipated Epic's defeat when he stated clearly that litigation under current U.S. antitrust law was not going to bring about a solution, and especially not soon enough.

Epic's Tim Sweeney has also done great things. He apparently can't deal with people putting the finger in a wound for the sake of accurate analysis, which is why he unfollowed me on Twitter after I started explaining the narrow scope and uselessness of Epic's consolation-prize UCL injunction and predicted precisely what was going to happen (clarification of scope by district court and stay by appeals court). That's OK. I continue to like and share tweets of his that I agree with, and I wish him luck, but some mistakes have been made by Epic that the Fortnite maker can't correct anymore. In fact, Mr. Sweeney himself made a far stronger argument in some Twitter debates against Apple's "Progressive Web Apps" smokescreen than Epic did in court. It has helped and continues to help that Mr. Sweeney draws attention to Apple's behavior and double standards. But Horacio was the far better chess player in the competition policy arena and the kind of advocate who can convince politicians and regulators of the need to take action.

The Coalition for App Fairness needs a new strategic leader whose primary challenge it will be to make the CAF a credible voice of many developers even though there is no indication that anyone other than Epic, Spotify, and Tinder company Match Group has contributed substantial funding or has much of a say. It has to define its focus more broadly than just dealing with the 30% cut, and it also needs to find outside counsel capable of taking on Apple. As a motion to quash subpoenas shows, the CAF was at some point represented by the Kanter Law Group, the law firm of Jonathan Kanter, who is now the U.S. antitrust chief (official title: Assistant Attorney General, Antitrust Division, DOJ).

Let me also report on a new development in the Epic Games v. Apple appellate proceedings: the State of California will file an amicus curiae brief with respect to the California UCL injunction, but has explicitly indicated it may support Apple, Epic, or neither party, depending on what exactly the scope of Apple's cross-appeal is going to be. The briefing schedule is as follows:

"First cross appeal brief due 01/20/2022 for Epic Games, Inc.. Second brief on cross appeal due 02/22/2022 for Apple, Inc.. Third brief on cross appeal due 03/24/2022 for Epic Games, Inc.. The optional cross appeal reply brief is due 21 days from the date of service of the third brief on cross appeal."

Normally, this means a stakeholder supporting Epic would have to file in late January, and an Apple amicus would have to file on March 1. However, the state of California wants to await Apple's brief and then decide. Should it side with Epic, then it wants to support Epic's second appellate brief (which will be Epic's response to Apple's UCL cross-appeal). That makes sense and I'm sure the motion will be granted.

It's going to be a tough call for the State of California. On the one hand, Apple is the state's most important and iconic company (though all the worldwide noise around App Store monopoly abuse threatens to adversely affect Apple's image at least in certain circles). On the other hand, California is a progressive state that would like its state UCL to be strong and to have a broad scope. And if California had already decided to support Apple, the Golden State wouldn't have to request this extension as the motion changes nothing about the briefing schedule in that event (to support Apple, California would have to file by March 1 one way or the other). They need the extension only to preserve their ability to support Epic or neither party, which they'd normally have to do in late January. So it does look a little bit like Epic may actually get some support from the State of California for competition policy reasons, but if so, it would only relate to a secondary issue (anti-anti-steering). In an even better scenario for Epic, the State of California would make points in the UCL context that also have persuasive impact on the Ninth Circuit in connection with the (infinitely more important) federal antitrust claims.

Finally, here's the procedural motion by the State of California:

21-12-22 Motion by State of... by Florian Mueller

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Apple gets injunction stayed as predicted AND deals major blow to Epic-Spotify-Tinder Coalition for App Fairness: U.S. appeals court denies motion to file amicus brief

Epic fail.

By that wordplay I don't mean the order by the United States Court of Appeals for the Ninth Circuit granting Apple's motion to stay the consolation-prize injunction under California Unfair Competition Law (UCL) that the district court had granted Epic Games. Anything else would have been a major surprise. I explained on a few occasions that Apple handily met the criteria for a stay. In fact, I got a 3 out of 3 for my predictions in this context: I said the district court would clarify the narrow scope of the UCL injunction (as it did, though people are free to still pretend to be obtuse), and would uphold its own injunction, but the appeals court would stay it. Actually, it's even 4 out of 4 as you'll see further below in the context of an amicus brief Apple successfully opposed.

The order granting Apple a stay (that will practically be in effect for a couple of years) is terse and doesn't take a position on whether Apple's conduct raises competition concerns or not. However, a binary outcome is now most likely as the federal appeals court for the West Coast cites California's Chavez case law, according to which the failure of a theory under federal antitrust law (Sherman Act) spells doom for a California UCL claim on the same basis. I continue to wish Epic luck with their own appeal (of the rejection of nine of Epic's ten counts), though the hurdle is high and Epic has made some mistakes that it's too late to fix now. My guess is that the appeals court will not overturn the district court's finding that Apple is not a monopolist, and Epic's failure to prove something that is so obvious to me--that so-called Progressive Web Apps are not a viable alternative to native apps--is not the only issue but that one alone is probably sufficient all by itself to make Epic lose again.

But the real #epicfail here--which has significant implications beyond Epic Games v. Apple has apparently not been noticed yet by others reporting on the case. The largest and most influential U.S. regional appeals court denied a motion by the Coalition for App Fairness and some of its members to submit an amicus brief in support of Epic's opposition to Apple's motion, and the denial of an amicus motion is nothing short of a nightmare for any advocacy group (this post continues below the document):

21-12-08 Order Denying CAF ... by Florian Mueller

This is a 4 out of 4 for me as I wrote last Thursday that I agreed with Apple's opposition to that amicus brief submission.

U.S. courts--and especially appeals courts--normally have a permissive approach toward amicus briefs, above all in high-stakes high-profile cases like this one. It rarely happens that they tell stakeholders they are unwelcome to join a proceeding as "friends of the court" contributing potentially useful information. Here, however, a filing by the Coalition for App Fairness (whose three key members are Epic, Spotify, and Match Group, which is best known for Tinder) and four of its members (Match Group, Tile, Basecamp, and Knitrino) has been flatly rejected by the Ninth Circuit.

As a result, the CAF now faces a credibility issue in any other App Store cases around the globe in which it may try to support Epic or even another one of its large members. Even if other courts ultimately allowed the CAF to join other cases, Apple would point to the Ninth Circuit decision, which at a minimum would diminish the credibility of anything the CAF would say on Epic's behalf. The CAF has now been stigmatized as part of an Epic anti-Apple initiative designed to raise issues regardless of whether those were "organic or manufactured" as the evidence shows.

The CAF and its members even sought to defend their motion by filing a reply brief shortly after Apple's opposition--but to no avail.

What I hope, however, is that courts will apply the same standard at the merits stage when ACT | The App(le) Association intervenes on Apple's behalf, claiming to represent small app developers though it's unclear whether any small app developer ever paid a cent in membership dues to ACT--while Apple is a major financial backer of that lobbying front. Compared to ACT, the CAF is like 100 times more credible--even if not credible enough in the Ninth Circuit's eyes.

The appeals court did not state a particular reason for denying the motion. But again, this is an unusual decision. It means that the CAF was unable to overcome the credibility issues Apple had raised, despite the considerable effort it made. The stay of the injunction was expected: the hurdle for that was relatively low. However, the denial of that amicus motion is unusual, and I suspect some people in Cupertino are really excited about it.

I wish to thank Richard Hoeg of Hoeg Law, who runs a YouTube channel named Virtual Legality. In a video he posted yesterday, Richard recommends my blog (click here to get directly to that part of the video) while clarifying that my take on Apple's App Store policies differs from his in the sense that I'm more critical of Apple's App Store governance (which is true). This shows again that people can agree at a rational and analytical level regardless of their personal preferences and opinions. His commentary on Epic v. Apple is always insightful--and I say that because I mean it, not just to reciprocate his shout-out for this blog.

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Apple will most likely get Epic's injunction stayed and reasonably disputes independence of Coalition for App Fairness, but should apply same standard to ACT | The App(le) Association's astroturfing

Briefing concerning Apple's appellate motion for a stay of the Epic Games v. Apple anti-anti-steering injunction is complete. Shortly before midnight local time on Tuesday, Apple filed with the United States Court of Appeals for the Ninth Circuit

1. its reply to Epic's opposition brief and

2. a response opposing the submission of an amicus curiae brief in support of Epic Games by the Epic-founded Coalition for App Fairness (CAF) and other CAF members.

Theoretically, the district court's injunction is scheduled to enter into force on December 9 (next week's Thursday), but I strongly doubt that it's going to happen then.

I still hope Epic will succeed with its appeal of the district court's flat rejection of Epic's federal antitrust claims against Apple, though the odds are against Epic now, primarily because of the high hurdles for private antitrust litigation in the United States (prior to the kind of reform that Capitol Hill lawmakers are working on) and secondarily because Epic missed out on certain opportunities (such as to convince the trial court that so-called Progressive Web Apps are not a viable alternative to native apps for a mix oftechnical, commercial, and legal considerations). But my personal hopes for loosening Apple's ironclad grip on the iOS app market are one thing, and the fundamental flaws of the California Unfair Competition law (UCL) injunction the district court awarded Epic as a consolation prize are another. Also, the end of opening up the iOS app market doesn't justify the means of trolling Apple with foreseeably aggressive contempt motions should the injunction get enforced (which in turn would place an unnecessary burden on the federal judiciary).

In procedural terms, the first question for the West Coast appeals court to decide on Apple's request for an administrative stay or whether to proceed directly to the adjudication of the motion, which would also be possible pretty quickly as Apple handily satisfies the criteria for a stay. I call an administrative stay a "micro-stay": it's a stay for the purpose of preserving the status quo while the court is weighing, for a few more days or weeks, the motion and deciding on whether to grant a stay for the entire duration of the appellate proceedings.

Apple has already requested an administrative stay for the event it petitions the Supreme Court. In its appellate motion, Apple wrote:

"In the event the full stay is denied, Apple requests that the administrative stay be extended for an additional 30 days to allow Apple to seek Supreme Court review while undertaking the substantial changes that would be required to comply with the injunction while attempting to mitigate—but not eliminate—the irreparable harms it will cause Apple, customers, and developers."

Apple would take this matter up with the top U.S. court if it had to, but again, I don't think it will be necessary. Now that briefing is complete, I find it not impossible but somewhat hard to imagine any outcome other than the stay Apple is seeking.

Here's Apple's reply brief, and it truly is a lot more compelling than Epic's opposition filing (this post continues below the document):

21-11-30 Apple Reply in Sup... by Florian Mueller

For the reasons I already discussed last month, it makes a whole lot of sense for the Ninth Circuit to grant Apple's motion for a stay.

In order for that to happen, Apple merely needs to convince the appeals court of there being pretty good grounds on which the UCL injunction may be overturned. As I explained before, it would be an unprecedented kind of anti-anti-steering injunction under U.S. law. Apple has other arguments that the district court wasn't receptive to but which are likely to bear weight with the appeals court, such as that Epic's defeat under the Sherman Act is also dispositive of its UCL claims. Even if one doesn't agree with Apple on this 100% (I, for one, am convinced that California UCL does give courts more wiggle room than federal antitrust law), the fact that Apple's business model was (regrettably, if you ask me) cleared under federal antitrust law at least makes it a pretty good possibility that the UCL injunction won't be affirmed.

There's also the notable absence of a market definition from the UCL part of the district court's judgment and question, and Apple continues to dispute Epic's standing, pointing to a decision by the Second Circuit that found merchants who don't accept Amex cards lack standing to challenge Amex's anti-steering provision. Epic is not on the App Store anymore; some of its subsidiaries are, but Epic elected not to make them parties to the case, as Apple accurately notes (and which may be one of those decisions that Epic regrets in retrospect--they made some brave and smart decisions, but also some that weren't great).

Apple argues that the amicus brief submitted by the Coalition for App Fairness (CAF) is just another filing by Epic itself. On this one, I agree with Apple, even though I very much agree with the CAF's #OpentheAppStore policy goals. However, courts are rather permissive when it comes to amicus briefs. And as I already did in the headline of this post, I can't help but notice Apple's dual standards in this regard.

Here's Apple's opposition to the CAF's amicus brief filing (this post continues below the document):

21-11-30 Apple Response to ... by Florian Mueller

Apple makes some strong points in that opposition filing when it argues that the "CAF is not independent of Epic." Of course it's not. It came into being shortly after Epic provoked the removal of Fortnite from the App Store (and from Google Play). Apple's filing recalls the following:

"Epic was then in control of CAF, 'charg[ing] [it] with generating continuous media and campaign tactic pressure on Apple,' even hiring and paying for 'a consultant to help to establish a reason for [CAF] to exist (either organic or manufactured).'"

The "organic or manufactured" quote from the evidentiary record is pretty damning, and that kind of attitude did nothing to persuade the district judge to enter a judgment in Epic's favor on the key claims. (Again, I say so even though I'd like the CAF to succeed.)

Apple accurately disputes that the CAF is, as its proposed amicus brief claims, an "independent nonprofit organization" (emphasis in Apple's--but not the CAF's--filing). Epic has too much influence over the CAF for that claim to be true, and Apple accuses the CAF of failing "to disclose to this Court even that Epic is a member, much less that Epic created and controls CAF." Even if the appeals court accepted the amicus brief nonetheless, Apple has already destroyed its credibility.

The CAF's amicus brief's deficiencies extend beyond a lack of forthrightness in that one regard. In order to obfuscate Epic's control (together with Spotify and Match Group) over the organization, the CAF was formally joined by four of its members: Tile, Match Group, Basecamp, and Knitrino. But as Apple notes, all four of them offer subscription apps, which the district court noted "are not part of this case." Epic's case against Apple is all about in-app purchasing, and while subscriptions are closely related, it's true that "subscription apps are subject to a different anti-steering provision that is unaffected by the injunction." Therefore, it's easy to see that those four CAF members simply decided to lend their names to the motion in order to divert attention away from the fact that the CAF is simply trying to submit an amicus brief on Epic's behalf.

Of course, those companies might make IAP offers at some point, but that would be a change of business model for them.

Apple says that "CAF's motion is nothing more than an attempt by Epic to file two responses rather than one to Apple's stay motion." That characterization goes a bit far. Still, it is true that this attempt by the CAF to influence the Ninth Circuit's decision on Apple's motion is probably going to fail. Even if the brief was accepted, it would hardly benefit Epic.

But Apple is now the proverbial pot calling the kettle black. Two months ago I criticized Apple for utilizing ACT | The App Association, which is more accurately described as ACT | The Apple Association. ACT issues statements on App Store issues all the time, and I guess we'll see amicus briefs from them in this case, too. While CAF did a poor job on that amicus brief (failing to disclose even that Epic is a member is an unforgivable mistake and diminishes its credibility), there can be no doubt that not only all of its members but also all of its financial backers are genuine app developers (like Epic and Spotify). That is more tha ACT can say: ACT simply renamed itself "The App Association" at some point, but there is no indication that many of its curent members actually make apps, as I'm not aware of ACT only accepting sign-ups from actual app makers (apparently there's no vetting, and I know of a U.S. professor who held a position with the Clinton White House and at some point signed up for free just to verify the hypothesis of ACT not applying any criteria to who joins, or charging a cent) or that they kicked out members who don't make apps when ACT repositioned itself as an app developer organization.

Apple should refrain from astroturfing, and I absolutely don't understand why some other major tech companies condone ACT's disingenuous pro-Apple advocacy on App Store issues (especially members who don't like Apple's App Store model). ACT supports Apple not only in the App Store context but also on standard-essential patents, and interestingly that chameleon of a lobbying front then claims it has members who make IoT products. So it is an App Association or an IoT Association? This is called "géométrie variable" in French.

Astroturfing is so serious an issue that Politico recently reported on it. ACT doesn't get mentioned there, but that's the kind of organization policy makers can't trust to represent whom they say they represent.

We'll see a decision from the Ninth Circuit in a few days. Maybe even before the weekend. An administrative stay is a no-brainer, but they might even consider the motion to be strong enough to grant a full stay right away. The U.S. judiciary will do itself a favor if it doesn't have to rule on motions for contempt-of-court sanctions that would potentially try in more or less absurd ways to stretch the envelope of that unprecedented anti-anti-steering injunction.

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Today is the first anniversary of app developers' D-Day: #FreeFortnite -- Apple will lose if it doesn't change course and present real solutions

August 13, 2020. One year ago, to the day. At 2 AM local time, Epic Games CEO Tim Sweeney threw down the gauntlet to Apple by email, telling Tim Cook that Epic would from there on out refuse to comply with Apple's in-app payment rule and expressing "the firm belief that history and law are on [the Fortnite maker's] side."

The timing of the email was deliberate. This way, it was going to take a few hours before Apple would see this (and the fact that Epic activated a "hotfix" that presuambly was just a simple server-side value) and made an alternative payment system available in Fortnite. Apple kicked out Fortnite. So did Google, where Epic did the same thing. Epic filed its private antitrust complaints in the Northern District of California that day.

At the end of closing argument in Epic Games v. Apple (in late May), Judge Yvonne Gonzalez Rogers jokingly said she'd try to hand down her judgment by today. She later clarified that she just said so because of the first anniversary of the dispute, but cautioned that this important decision might take time given the complexity of the case.

Looking at the landscape a year after the launch of the #FreeFortnite campaign, it really does seem that the days of Apple's App Store monopoly abuse are numbered.

That's the way it should be according to common sense. Just imagine how totally absurd the current situation is: developers may spend what is a lot of money for them (even if not for the richest company in the world) on the development of an app, and they won't know whether they may actually publish it on iOS until it's done and they submit it to Apple's app review department. Apple's app review is intransparent, and some of the rules are neither fair nor reasonable, and they are not even clear, which results in an inconsistent application all the time.

Apple's abusive conduct is by far the worst that any company has ever done in the history of the technology industry to innovation and creativity. Forget about the IBM mainframe monopoply or the peripheral issues over which the EU imposed a huge fine (by the standards of the 2000s) on Microsoft. No company has ever shown as much disdain for the software developer community as Apple, which is closely followed by Google, though Android is the lesser evil than iOS, and Google is still nerdier, which I like despite everything that I criticize them for.

I wonder what must be going on in the minds of the people who make their company a tyrannical version of "Judge Dredd" (prosecutor, judge, and executioner) over developers' investment of time, energy, and money. Is it just hubris? Do they really believe they know better than everyone only because the late Steve Jobs did the right things at the right time, and because they've built an unprecedent tech empire on that basis, which is of course a huge achievement?

Even the brilliant Tim Cook was checkmated by Judge Gonzalez Rogers when she examined him in May. The facts forced him to acknowledge that the only reason for Apple's 15% cut (small business program) was little more than a response to antitrust pressures. The most important admission was that he, as Apple's CEO, doesn't even get reports on how satisfied developers are with how Apple is treating them. The judge mentioned a survey according to which 39% of developers are dissatisfied, and that's actually flattering for Apple because one could easily ask questions that would lead 99% of developers to confirm that there are real issues.

Let that sink in. The CEO of one of the two companies that have like 1,000 times more power over developers than even Microsoft ever had doesn't even care to know whether developers feel they're being treated fairly. The court knows why: because Apple has to compete with other phone makers for users, but then there's the app aftermarket in which Apple doesn't have to compete for developers. It's a two-sided market in which there's practically no competition at all on one side.

Epic is one of the largest and most profitable game makers. They knew that they weren't necessarily going to be "sympathetic" at the time they launched their #FreeFortnite campaign. I wasn't totally sold in the beginning, but what I immediately liked about Epic's initiative was that they were raising a broader issue than Spotify, which I feared was just going to improve the situation for those who compete with Apple's subscription services (i.e., just a very few players). Still, I do have to give credit to Spotify's Horacio Gutierrez, a former Microsoft IP chief. He had been fighting against Apple's abusive behavior for years, and raised awareness for the issue in important circles. Arguably, Epic was standing on the shoulders of this giant when it launched its fight for app developers' essential freedoms a year ago--and just on the last business day before the Epic Games v. Apple trial, the European Commission handed down its Statement of Objections based on Spotify's complaint.

Shortly after Epic's complaints, Epic, Spotify and others (with the most significant third player being Match Group, which is known for the Tinder app) founded the Coalition for App Fairness. Again, I wasn't initially sold, but I watched the further developments with an open mind and less than a year later I think--in light of the recent announcement by three United States Senators--that the CAF may go down in history as one of the most impactful and important policy efforts in the history of the tech industry.

The tide has turned. Apple may be losing this war much more quickly now than it would have considered realistic when this started a year ago. Legislative, regulatory and judicial developments reinforce each other. Apple and its army of loyalists (though I sometimes wonder how many of those Apple apologists on Twitter are simply Apple employees) can't explain away that the current situation is unsustainable and has to be brought to an end. The sooner, the better for the world in economic and other terms.

I noted on Twitter today that Apple may already have had more negative news cycles--not just in a quantitative but also a qualitative sense--in 2021 than in the decade(s) before. It becomes clearer and clearer that Apple is doing harm now that does not constitute the kind of "creative destruction" under Steve Jobs. Now it's just destruction for Apple's economic gain, with zero benefit to innovation. Ad tracking is an example. Apple has done and continues to do enormous harm to both advertisers and app developers selling their inventory, but third-party app stores can also remedy that problem.

Privacy is a mix of a policy pretext, marketing mantra and PR stunt for Apple. If it's about Apple selling you music, you should consent to GPS tracking. If it's about governments containing the COVID pandemic, Apple doesn't even allow that an app asks users to scan a QR code at the entrance of a venue. Applying such double standards is the "best" way for a company to lose its credibility with decision makers and opinion leaders.

Another example is that Apple seeks to justify its COVID app (mis)guideline with public health concerns while selling homeopathy crap. Homeopathy is fake science, bogus medicine--but never mind as long as Apple can make money with it.

A year after #FreeFortnite and the Nineteen Eighty-Fortnite video (which has almost 8 million YouTube views by now and even understates the problem), and less than a year since the Coalition for App Fairness was founded, the noose is tightening and change is coming.

Apple can counterlobby, defend, appeal. That's what it's currently focusing on. The alternative would be for Apple to realize that

• it can do even better if it unleashes the app developer community's creativity,

• it can still do well even with competition in the app distribution aftermarket, though it will face challenges, and

• if Apple decided to make amends and engage constructively, it might do better than if it just kept opposing the structural change that is inevitably needed. Apple could--if it wanted to--go from app developers' worst enemy to one of app developers' best friends. They could focus on making the cake bigger rather than just focusing on their share and their control. But such ideas as my "contribute-back" licensing proposal aren't going to get traction, realistically. Apple looks set to hold out until the bitter end, because they think it's most profitable.

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