Posts tagged with "Legal"

The European Commission Opens Two iOS Interoperability Proceedings Against Apple

The European Commission (EC) issued a press release today summarizing two specification proceedings that they have commenced against Apple:

The first proceeding focuses on several iOS connectivity features and functionalities, predominantly used for and by connected devices. Connected devices are a varied, large and commercially important group of products, including smartwatches, headphones and virtual reality headsets. Companies offering these products depend on effective interoperability with smartphones and their operating systems, such as iOS. The Commission intends to specify how Apple will provide effective interoperability with functionalities such as notifications, device pairing and connectivity.

The second proceeding focuses on the process Apple has set up to address interoperability requests submitted by developers and third parties for iOS and IPadOS. It is crucial that the request process is transparent, timely, and fair so that all developers have an effective and predictable path to interoperability and are enabled to innovate.

In a nutshell, the EC is unhappy with connectivity between iOS and third-party devices and plans to tell the company how to comply. The second part requires Apple to set up a process for third parties to request connectivity with iOS.

The EC has given Apple six months to comply with its latest proceedings, during which the commission will share its preliminary findings with Apple and publish a non-confidential summary of the findings publicly so third parties can offer comments.

Apple prides itself on its tight integration between hardware and software, and the EC is determined to open that up for the benefit of all hardware manufacturers. While I think that is a good goal, we’re getting very close to the EU editing APIs, which I find hard to imagine will lead to an optimal outcome for Apple, third-party manufacturers, or consumers. However, if you accept the goal as worthwhile, it’s just as hard to imagine accomplishing it any other way given Apple’s apparent unwillingness to open iOS up itself.

The Risk to Apple of OS Envy→

With the rerelease of iOS 18.0, the EU and the rest of the world will have two flavors of the iPhone’s operating system. As Jason Snell writes for Macworld, this is one of Apple’s greatest fears, but there are potentially bigger risks on the horizon for the company. As Jason explains:

…to me, the bigger danger is envy. It strikes me that Apple has tried to make residents of the European Union envious of other regions by withholding Apple Intelligence, at least at first. There are legal reasons to do so, of course, but it’s also a lesson to Europeans that if they support such a strict regulatory regime, they’re going to be left on the side of the road while the rest of the world enjoys the bounty of AI features inside iOS. (Whether that bounty actually exists is beside the point.)

Yet, when I consider everything being experimented with in the EU, I start to wonder if the envy is actually going to flow in the other direction. The Verge said that the iPhone is now “more fun” in the EU. Noted iOS expert Federico Viticci wrote that the EU version of iOS “is the version of iOS I’ve wanted for the past few years,” and that “we can finally use our phones like actual computers.”

As someone who loves clipboard managers and uses several apps that aren’t Apple’s defaults, I am warming up to their point of view.

I’m right there with Jason. At first, the differences between my iOS and Federico’s didn’t seem like that big of a deal. Sure, it was easier for him to access AltStore, but it’s available outside the EU if you jump through some extra hoops. However, over time, the differences have multiplied. I’ve also had the chance to try Apple Intelligence in 18.1, and although there’s more to come from Apple on the AI front, which could change my calculus, from where things stand today, I’d gladly trade iOS 18.1 for the EU’s 18.0.

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Google’s Antitrust Loss, Why Apple Doesn’t Just Build a Search Engine, and What Comes Next

Yesterday, Federal District Judge Amit Mehta issued a ruling in the U.S. Justice Department’s antitrust case against Google in favor of the government. Judge Mehta didn’t mince words:

Google is a monopolist, and it has acted as one to maintain its monopoly. It has violated Section 2 of the Sherman Act.

The Judge further explained his ruling:

Specifically, the court holds that (1) there are relevant product markets for general search services and general search text ads; (2) Google has monopoly power in those markets; (3) Google’s distribution agreements are exclusive and have anticompetitive effects; and (4) Google has not offered valid procompetitive justifications for those agreements. Importantly, the court also finds that Google has exercised its monopoly power by charging supracompetitive prices for general search text ads. That conduct has allowed Google to earn monopoly profits.

It’s a long opinion, coming in at nearly 300 pages, but the upshot of why Judge Mehta ruled the way he did is summed up nicely near the beginning of the tome:

But Google also has a major, largely unseen advantage over its rivals: default distribution. Most users access a general search engine through a browser (like Apple’s Safari) or a search widget that comes preloaded on a mobile device. Those search access points are preset with a “default” search engine. The default is extremely valuable real estate. Because many users simply stick to searching with the default, Google receives billions of queries every day through those access points. Google derives extraordinary volumes of user data from such searches. It then uses that information to improve search quality. Google so values such data that, absent a user-initiated change, it stores 18 months-worth of a user’s search history and activity.

If you’re interested in how web search works and the business deals that drive it, the opinion is a great primer. Plus, although the details already dribbled out over the course of the 10-week trial, there are lots of interesting bits of information buried in there for anyone interested in Apple’s search deal with Google.

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US Department of Justice and States Sue Apple Under Federal and State Antitrust Laws

The US Department of Justice and 16 states have sued Apple for antitrust violations in an 88-page complaint filed in New Jersey federal court. At the time of publication, the DOJ’s press release, which has been shared with some media outlets, has not been published on the DOJ website, although I expect it will be before long. In response, Apple says:

At Apple, we innovate every day to make technology people love—designing products that work seamlessly together, protect people’s privacy and security, and create a magical experience for our users. This lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets. If successful, it would hinder our ability to create the kind of technology people expect from Apple—where hardware, software, and services intersect. It would also set a dangerous precedent, empowering government to take a heavy hand in designing people’s technology. We believe this lawsuit is wrong on the facts and the law, and we will vigorously defend against it.

We’ll have a more detailed breakdown of the plaintiffs’ allegations against Apple soon, but the allegations are broad, claiming that:

  • Apple has monopolized or attempted to monopolize the smartphone market under the federal Sherman Act;
  • Apple has monopolized or attempted to monopolize the performance smartphone market under the federal Sherman Act and Wisconsin and New Jersey antitrust laws

(emphasis added).

The DOJ and states argue that Apple’s alleged anticompetitive behavior extends beyond its effect on users and developers to touch a wide swath of the economy:

Critically, Apple’s anticompetitive conduct not only limits competition in the smartphone market, but also reverberates through the industries that are affected by these restrictions, including financial services, fitness, gaming, social media, news media, entertainment, and more. Unless Apple’s anticompetitive and exclusionary conduct is stopped, it will likely extend and entrench its iPhone monopoly to other markets and parts of the economy. For example, Apple is rapidly expanding its influence and growing its power in the automotive, content creation and entertainment, and financial services industries–and often by doing so in exclusionary ways that further reinforce and deepen the competitive moat around the iPhone.

The DOJ and states seek a number of different remedies, including:

a. preventing Apple from using its control of app distribution to undermine cross-platform technologies such as super apps and cloud streaming apps, among others;

b. preventing Apple from using private APIs to undermine cross- platform technologies like messaging, smartwatches, and digital wallets, among others; and

c. preventing Apple from using the terms and conditions of its contracts with developers, accessory makers, consumers, or others to obtain, maintain, extend, or entrench a monopoly.

There’s a lot to digest in the complaint, which you can read for yourself here. I highly recommend reading at least the introduction to get a better sense of what Apple is being accused of. Keep in mind that this is just one side of the story, but Apple will tell its side in more detail soon enough. And, of course, I will be back soon with a more detailed look at what this lawsuit is all about and what’s at stake.

What’s Next for Apple and Epic’s Legal Disputes?

Yesterday, the US Supreme Court told Epic Games and Apple, “No, thank you,” and Apple served up an ugly alert to developers who can now offer payment options outside the App Store. If you’re thinking, “Wait, didn’t this all get resolved ages ago?” I feel you. The legal system moves at its own pace, which is an order of magnitude slower than technology. However, what might feel like a lifetime ago to many MacStories readers is pretty typical. It also means that it’s time to put on my ‘former lawyer’ hat for a moment to revisit where things stand with Epic and Apple and consider what’s next.

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What Does It All Mean?: A Look at Judge Gonzalez Rogers’ Decision in the Epic Versus Apple Trial

Yesterday, US District Judge Yvonne Gonzalez Rogers decided Epic Games’ antitrust lawsuit against Apple, delivering a ruling in favor of Apple that comes with significant caveats. Although the Judge found that Apple‘s operation of the App Store isn’t an exercise of monopolistic power, she concluded that App Review Guidelines and related provisions of its agreements with developers foster a lack of pricing transparency store-wide that undermines competition under California law. So, while the decision is undeniably a win for Apple in many respects, it’s also a decidedly mixed bag. I’ve taken the time to read Judge Gonzalez Rogers’ 185-page decision and having written an in-depth look at the issues going into the trial, I thought I’d follow up with what the Court’s ruling is likely to mean for Epic and Apple as well as all developers and consumers.

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Apple to Allow Reader Apps to Link to Account Management Pages on the Web in Early 2022

Apple has resolved an investigation by the Japan Fair Trade Commission by agreeing to allow ‘reader’ apps to link to websites to set up and manage an account with the app’s provider beginning in early 2022. The agreement reflects a loosening of existing App Store Guidelines and will be applied worldwide, but it’s also narrow.

First, the agreement is limited to what Apple refers to as ‘reader‘ apps. In App Review parlance, these are apps like the Netflix or Spotify apps, which “provide previously purchased content or content subscriptions for digital magazines, newspapers, books, audio, music, and video.’

Second, the developers of ‘reader’ apps can only share ‘a single link to their website to help users set up and manage their account.’ That language suggests, for example, that users could follow a link in the Kindle app to manage their Amazon account and perhaps initiate Kindle book transfers to an Apple device, but it seems to preclude the Kindle app from offering a catalog of books with links to a product page in a web browser. However, the press release does suggest a link could be used to set up a subscription to digital content like Netflix or Comixology Unlimited.

Third, the agreement doesn’t address videogame streaming services, which Apple does not consider to be ‘reader’ apps. Streaming games fall under a separate section of the App Review Guidelines, which require each game to be submitted to App Review.

The changes announced to end the Japan Fair Trade Commission investigation only affect a narrow category of apps and will only provide a single link out to the web. However, the agreement is a sign that the legal and regulatory scrutiny around the world is beginning to force Apple to change how it runs the App Store. With the number of pending lawsuits and investigations that remain outstanding worldwide, I expect we’ll see more of this sort of adjustment to App Store practices in the upcoming months.

Epic Versus Apple: The MacStories Overview

Later today, Epic Games and Apple will square off in a high-stakes trial in US federal district court that’s nominally about money. However, if that were all that was at stake, the claims each company has made against the other would likely have been resolved by now. Companies the size of Apple and Epic settle because it’s rarely in their interest to have a judge make decisions for them. However, this trial is different.

There’s more to these disputes than Epic’s allegation that Apple violated antitrust laws and Apple’s claims that Epic violated its developer agreement. Underlying it all is the way the dispute was precipitated by Epic. The Fortnite creator’s actions don’t necessarily absolve Apple of antitrust violations, but Epic’s calculated orchestration of events leading to the dispute have not gone unnoticed by the judge presiding over the case and may influence the trial’s outcome. Coupled with Epic’s efforts to get regulators around the world to take up its cause and its very public crusade against the way Apple operates the App Store, it’s not surprising that the claims haven’t settled. Instead, the parties will begin today with opening arguments in front of US District Judge Yvonne Gonzalez Rogers, who the parties have agreed will decide the dispute instead of a jury.

Regardless of your opinion of the way Apple runs the App Store or Epic’s litigation tactics, the thing to keep in mind as the trial starts is that the judge is being asked to settle a legal dispute, not set policy. Both companies have made specific claims against the other, which by definition means the judge’s ruling will likely be narrower in scope than it would be in an antitrust case brought by the US government. Nor is any remedy imposed by the judge likely to be as broad as government regulation of the App Store might be someday.

Still, that doesn’t mean the stakes aren’t high; they are. An adverse ruling against Apple could significantly change the way the company operates the App Store and would likely trigger more antitrust lawsuits and regulatory scrutiny in the future. As a result, I thought it would be useful to dig in and take a closer look at some of the parties’ arguments and the context in which this dispute arose to provide a better sense of what to expect from the trial, which is expected to run about three weeks, and what the outcome might be.

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