May 14, 2019

Critics smell blood around the iPhone App Store

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

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 7 p.m. ET: 855,007 — Total deaths: 42,032 — Total recoveries: 176,714.
  2. U.S.: Leads the world in confirmed cases. Total confirmed cases as of 7 p.m. ET: 186,265 — Total deaths: 3,810 — Total recoveries: 6,910.
  3. Business updates: Should you pay your rent or mortgage during the coronavirus pandemic? Find out if you are protected under the CARES Act.
  4. Public health updates: More than 400 long-term care facilities across the U.S. report patients with coronavirus — Older adults and people with underlying health conditions are more at risk, new data shows.
  5. Federal government latest: President Trump said the next two weeks would be "very painful" on Tuesday, with projections indicating the virus could kill 100,000–240,000 Americans. The White House and other institutions are observing several models to help prepare for when COVID-19 is expected to peak in the U.S.
  6. U.S.S. Theodore Roosevelt: Captain of nuclear aircraft carrier docked in Guam pleaded with the U.S. Navy for more resources after more than 100 members of his crew tested positive.
  7. What should I do? Answers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk.
  8. Other resources: CDC on how to avoid the virus, what to do if you get it.

Subscribe to Mike Allen's Axios AM to follow our coronavirus coverage each morning from your inbox.

White House projects 100,000 to 240,000 U.S. coronavirus deaths

President Trump said at a press briefing on Tuesday that the next two weeks in the U.S. will be "very painful" and that he wants "every American to be prepared for the days that lie ahead," before giving way to Deborah Birx to explain the models informing the White House's new guidance on the coronavirus.

Why it matters: It's a somber new tone from the president that comes after his medical advisers showed him data projecting that the virus could kill 100,000–240,000 Americans — even with strict social distancing guidelines in place.

Go deeperArrowUpdated 1 hour ago - Health

Paying rent in a pandemic

Illustration: Aïda Amer/Axios

For many people who've lost jobs or income because of the coronavirus pandemic, tomorrow presents a stressful decision: Do you pay your rent or mortgage?

Why it matters: The new CARES Act that was signed by President Trump on Friday protects homeowners and renters who are suffering from the response to the coronavirus pandemic — but it's not “a one-size-fits-all policy rulebook,” a congressional aide tells Axios.

Go deeperArrow3 hours ago - Health