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Apple’s App Store Monopoly: Stifling Competition and Harming Consumers

Apple, the world’s second most valuable company, has come under intense scrutiny in recent years for its anticompetitive practices around the iOS App Store. With a nearly $3 trillion market cap and products used by 64% of Americans, Apple wields immense power over the digital economy. But instead of fostering innovation and fair competition, Apple has repeatedly abused its position as a gatekeeper to extort app developers and limit consumer choice.

One of the most egregious examples is Apple’s 30% tax on digital transactions in iOS apps. This has forced major companies like Netflix, Spotify, and Fortnite-maker Epic Games to raise prices for consumers. In 2018, Netflix stopped allowing new users to sign up via the App Store to avoid the 30% fee. Last month, they began forcing existing subscribers off App Store billing. Spotify filed an antitrust complaint that led to a massive $2 billion fine against Apple in the EU.

The most recent battle in this ongoing war has been between Apple and Fortnite-maker Epic Games. Epic CEO Tim Sweeney has been an outspoken critic of Apple’s practices for years. In 2020, Epic tried to circumvent Apple’s 30% fee on in-app purchases by adding its own direct payment option in Fortnite. Apple swiftly removed Fortnite from the App Store, and Epic sued Apple for antitrust violations.

The legal battle has raged on multiple fronts since then. Most recently, in the wake of the EU’s Digital Markets Act (DMA), Epic tried to launch its own competing app store and game store on iOS. Though Apple had initially approved Epic’s developer account for this, it later terminated the account in what appeared to be retaliation for Epic’s attempts to compete with the App Store monopoly.

Sweeney had previously blasted Apple’s proposed changes to comply with the DMA as “hot garbage” that failed to meaningfully address the core issues. In a tweet, he accused Apple of contradicting its stated principles with monopolistic policies around the App Store, in-app payments, competing browsers and web apps.

Sweeney is not alone in this view. Critics argue that Apple’s conduct towards Epic, including apparently retaliating against the company for its vocal dissent, demonstrates the tech giant’s disregard for fair competition. Though Epic is a multi-billion dollar company, Apple’s monopoly power allows it to punish even large developers for stepping out of line.

Many worry about the chilling effect this could have on smaller developers who lack Epic’s resources to fight back. If Apple can bully a company of Epic’s size merely for criticizing its policies, how can startups or indie developers hope to build businesses in the iOS ecosystem?

Policymakers have taken notice as well. The DMA prohibits the kind of retaliation Apple took against Epic. Some observers, like Sumit Sharma at Consumer Reports, argue that Apple’s defiant stance and continued restrictions on Epic even after the DMA took effect likely do not comply with the law and could provoke further action from regulators.

The Epic case illustrates the high stakes of Apple’s monopoly and the difficulty of challenging it, even for a large and popular developer. It remains to be seen how the battle will play out in court. But one thing is clear: app developers will not stay silent about Apple’s anticompetitive practices forever. As more companies speak out like Epic has, pressure will continue to mount for serious reforms to rein in Apple’s vast power over the iOS ecosystem.

Apple has become the gobbling green slime monster of the tech industry, chomping every last cent from consumers and developers alike. Like a creature from a 1950s B-movie, it grows bigger and more powerful with each transaction, seemingly insatiable in its appetite for profits. So as we navigate this sticky situation, let’s not forget the importance of wielding the regulatory sword to ensure this giant is tamed, turning our digital marketplace back into a vibrant ecosystem rather than a feeding ground.

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