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Illustration: Rebecca Zisser/Axios

Apple’s very successful iPhone App Store is under attack from multiple directions, with users and developers criticizing its business model.

Why it matters: If the burgeoning criticism leads to concrete legal results, it could undermine an Apple ecosystem that's already under threat from other tech giants like Google and Facebook.

Driving the news: Customers and developers take issue with the portion of some App Store transactions that Apple takes for itself.

  • Users can sue Apple for allegedly exercising monopoly power over the market for third-party apps and driving up prices, the U.S. Supreme Court ruled 5-4 on Monday.
  • Developers have signaled concerns in recent years with Apple’s 30% cut of new in-app subscriptions. Spotify has escalated those worries into a full-blown antitrust complaint against Apple in Europe, on the grounds that the fee hurts its ability to compete with Apple Music.
  • Apple has said that after "using the App Store for years to dramatically grow their business, Spotify seeks to keep all the benefits of the App Store ecosystem — including the substantial revenue that they draw from the App Store’s customers — without making any contributions to that marketplace."

App creators also have no choice but to use Apple's store to get to its customers — unlike on Google's Android, where they can pursue alternate means of access.

Flashback: Steve Jobs was opposed to third-party apps for the the iPhone when it launched in 2007 — believing that web-based applications would suffice — before changing course.

The bigger picture: A change in the App Store status quo would come as Apple looks to broaden and deepen its customers’ relationship with its ecosystem of products and draw more revenue from services.

  • Apple is increasingly rolling out its own services, like Apple News+ and its forthcoming streaming offering, that will compete with third-party apps in its store.
  • The challenges to the App Store could impede that services push should it seriously call this model into question.
  • Plus, Axios’ Joe Uchill notes: The App Store's software curation is an effective cybersecurity tool, since Apple checks for backdoors, surveillance, and privacy flaws, keeping the iOS software pool relatively safe. Any change that reduces Apple's control over app curation could also make using the iPhone a little more dangerous.

What’s next:

  • The Supreme Court didn’t rule on the actual monopoly question — so that may play out in the lower courts.
  • "We’re confident we will prevail when the facts are presented and that the App Store is not a monopoly by any metric," said an Apple spokesperson.
  • The Financial Times has reported that the European Commission is expected to start an investigation into the Spotify case.

Go deeper

6 hours ago - World

Top general: U.S. losing time to deter China

Stanley McChrystal. Photo: Alex Wong/Getty Images

Stanley McChrystal, a top retired general and Biden adviser, tells Axios that "China's military capacity has risen much faster than people appreciate," and the U.S. is running out of time to counterbalance that in Asia and prevent a scenario such as it seizing Taiwan.

Why it matters: McChrystal, the former commander of U.S. and NATO forces in Afghanistan, recently briefed the president-elect as part of his cabinet of diplomatic and national security advisers. President-elect Joe Biden is considering which Trump- or Obama-era approaches to keep or discard, and what new strategies to pursue.

Progressives shift focus from Biden's Cabinet to his policy agenda

Joe Biden giving remarks in Wilmington, Del., last month. Photo: Roberto Schmidt/AFP via Getty Images

Some progressives tell Axios they believe the window for influencing President-elect Joe Biden’s Cabinet selections has closed, and they’re shifting focus to policy — hoping to shape Biden's agenda even before he’s sworn in.

Why it matters: The left wing of the party often draws attention for its protests, petitions and tweets, but this deliberate move reflects a determination to move beyond some fights they won't win to engage with Biden strategically, and over the long term.

Dave Lawler, author of World
8 hours ago - World

Venezuela's predictable elections herald an uncertain future

The watchful eyes of Hugo Chávez on an election poster in Caracas. Photo: Cristian Hernandez/AFP via Getty

Venezuelans will go to the polls on Sunday, Nicolás Maduro will complete his takeover of the last opposition-held body, and much of the world will refuse to recognize the results.

The big picture: The U.S. and dozens of other countries have backed an opposition boycott of the National Assembly elections on the grounds that — given Maduro's tactics (like tying jobs and welfare benefits to voting), track record, and control of the National Electoral Council — they will be neither free nor fair.