Senator Al Franken wrote this letter to the US Attorney General and the Chair of the Federal Trade Commission, saying, in part:
I am writing to encourage you to examine Apple’s content dealings with app developers to determine whether the company is engaging in anticompetitive behavior in the music streaming market. As the digital music industry continues to evolve, we must ensure that this relatively new market allows for meaningful competition and that consumers have access to important information about the products and services available to them. While I am encouraged to see increased competition in this market, I am concerned about certain business practices that have the potential to limit choices and raise prices for consumers.
And:
Apple’s licensing agreements have prevented companies from using their apps to inform users that lower prices are available through their own websites, to advertise the availability of promotional discounts, or to complete a transaction directly with a consumer within their app. These types of restrictions seem to offer no competitive benefit and may actually undermine the competitive process, to the detriment of consumers, who may end up paying substantially more than the current market price point.
I think this one has legs.
It has no legs.
People choose to buy an iPhone.
Apple do not force other streaming services to make apps for their platform.
Developers make apps to make money from Apple’s ecosystem.
They are free to make their apps and services exclusive to Android or Windows phone where they can go and make as much money…
Wait. What?
Every time Al Franken makes the news, I have the same thought: Oh, won’t you please just shut up?
I think the big issue here is the “prevented companies from using their apps to inform users that lower prices are available through their own websites, to advertise the availability of promotional discounts” though the “complete a transaction directly with a consumer within their app” is a different story. The former is kinda poor form – let the customer choose as it has nothing to do with the eco system. The later though, if you are going to use apple’s system to charge and use Apple’s account and infrastructure to take payment, you owe apple a fee.
There should be nothing wrong with, say spotify, offering to either process the membership purchase though your iTunes account for one price (I may trust it and prefer it) or signing up on the web and just logging in through the app. Forcing the iTunes account through the app for this is silly.
It is a little odd that Apple wants a cut of the price of content that isn’t in the App Store just because they were purchased from an app that is in the App Store. They’re not hosting the content and the simple financial transaction should not have the same overhead.
I bet that argument worked really well for Microsoft re: Internet Explorer. FWIW, they were right. A browser is a critical part of an OS and every OS comes bundled with a web browser.
Unless there are very narrowly defined exemptions, everything would turn into “free” on the App Store, and most features would become “content” that could be purchased directly from the developer.
Maybe that’s good for the consumer (who might see price reductions) and for the developers, but obviously it’s not in Apple’s interest to do that.
Granted, narrow exemptions would be created, but developers would still try to slip things by and look for loopholes. And even then, it’s still not in Apple’s interest to create these exemptions.
May Al Franken should create the Frankenphone and the Frankenstore where people can do whatever. But he’d rather stick his nose into other people’s business than create one on his own.
Sorry, I wasn’t clear in my first post. I don’t think this set up should be free. I was referring to subsequent charges after sign up. Using Spotify as an example, Apple should get 30% of the cost for signing up through the Spotify app which is fair, but once a customer signs up how does Apple justify taking 30% every month after that? They are literally doing nothing after the first transaction. The app is on the phone, the stream comes from Spotify. They are taking 30% for the cost of a transaction they’re forcing Spotify to make through the App Store. They won’t even let Spotify say, “Click here to sign up at Spotify.com.” That’s not fair. And FWIW, every free app in the App Store gets to advertise for free.
Amazon could sell ebooks directly through its app and process the payments themselves (just like they do with physical books in the shopping app), but Apple won’t let them. Apple forces apps to process IAPs through them. Fair and reasonable for IAPs hosted by the iTunes Store, but it makes no sense if the content is hosted elsewhere. Apple is the middleman whether you need one or not.
“Does Apple forbid these things or merely demand a cut of resulting revenues?”
They actually do both. The punishment for the latter is the former. I agree, apple does deserve a cut of sales if the user is using their iTunes account to process the purchase – but to ban the alternative is silly. it’s not the same as having an amazon store in iTunes at all. The app isn’t using iTunes store resources to run, just to provide the base app. The app in turn is helping prevent people going to the kindle device – so it is contributing to the iOS ecosystem. Providing the choice to decide which way I want to pay for a service apple isn’t involved in is not a bad thing. I thin you are confusing the Kindle (and spotify, for that matter) as extensions of the iTunes market when it is not. Those are not Apple’s apps. They are just downloaded free from their store. After that, apple shouldn’t have a right to what happens after that – it then becomes a relationship between the developer/service and the customer.
Again, if apple is processing the transaction – like using one’s iTunes account to purchase within the app, I get apple taking a cut – but forcing that to be the only way within the app should be looked at as anti-competitive.
That’s more than what it is if I download the app and sign up at Spotify.com instead of thru the app, which Apple is totally okay with. The 30% is Apple price’s for charging 30%.
Then how do you explain the hundreds of thousands of FREE apps that do not contribute to Apple’s bottom line, yet receive all the same benefits of being in the App Store that any paid app does? Access to the platform and customer base at no cost to the developer.
Earth to Al Franken. That satellite antenna on your head warped your brain. You need a dose of reality. Find a tech savvy 13 year old to explain things to you.
It’s fine for everyone to opine. But will people here stop commenting as if they know what the law really is. Bet none of you is a lawyer. Even if you are, how often have lawyers been right about this type of situation before it goes to trial? Stop acting like you all know. Dave says this might have legs. And it might. But no one can be confident one way or the other.
Earth to Hrunga. Al Franken has been one of the better politicians when it comes to the tech industry. Get a does of what’s going on before you reflexively comment.
No, not in the least – apple has said many times, and the music store falls under this too, the stores exist to sell devices – additional revenue is gravy. The app store is to make sure there is more incentive to have an iPhone/iPad/watch/iPod than having a kindle/tab/nexus… providing a platform for the things customers want. Apple would rather you do what you do on their devices and having a platform for devs to make them is what drives sales. A free kindle app download means a kindle isn’t purchased and an iPad is used instead. The cuts from purchases go towards covering server usages and transaction fees. If you buy a book from amazon in the kindle app on an iPad, the book comes from Amazon’s servers, not Apple’s. Apple doesn’t host amazon’s books, they host their own so charging a fee for it when no using an iTunes account to process it is a bit ridiculous and worth looking into. All I’m saying is don’t restrict people from signing up through a web portal if they choose to. This is a place where apple can provide a choice by doing nothing and looking good.
“Apple’s licensing agreements have prevented companies from using their apps to inform users that lower prices are available through their own websites, to advertise the availability of promotional discounts, or to complete a transaction directly with a consumer within their app.”
How many stores have you been to that have products on the shelf but a sign in front of the products saying “30% cheaper if you buy it on our website! Ignore the product in this store and buy elsewhere!” or “Want to buy here but still get the same 30% off as on our website? Use this handy payment terminal in front of the product to directly pay the manufacturer instead of the retail establishment!”?
The App Store is Apple’s store. They want to sell products, and they want make some margin. They’re not going to advertise that people buy the same product elsewhere, they’re not going to offer direct-to-supplier payments (cutting off their margin), and they have no obligation (legal or otherwise) to do either of those things.
I’ve agreed with Franklin on some things in the past but this is just asinine.
(Accidentally deleted part of my message; re-typing it now).
He writes angry letters, demanding answers, as if he’s entitled to them, gives stern looks to TV cameras, and then…nothing comes of it. Because there was no issue to begin with.
Franken is also concerned with the privacy policies of Uber, Lyft, smart TVs…all products and services that people choose to use and evidently enjoy. But when it comes to NSA mass surveillance, he’s on board with that. Government spying is cool! But companies using data to provide better service to their customers? I demand a congressional investigation!
He’s a friggin’ joke. He should have stayed in comedy.
It’s all about the experience. Apple wants it to be smooth and painless (one of the many reasons I love them). If they allow signing up on all of these 3rd party systems it’s going to be a huge mess and people will complain about their iPhone when in fact it’s the crappy 3rd party they are frustrated with.
franke proved himself a moron on a Touch ID.
It’s Apple’s decision to make. Their decision was “if you give away your stuff for free, we’re ok with it. If you use our platform to make money, we want a cut.”
Seems reasonable. Some local TV and radio stations (well, they used to, anyway) provide community notices for free, but if it was a commercial endeavour, they had to buy advertising.
He’s made good decisions and recommendations before. But that’s irrelevant. Attack the argument, not the person.
You left out “if a subsequent payment is not facilitated by Apple, we still get 30%” and “if you offer a more affordable price at you website, you’re not allowed to say so.”
“Apple’s licensing agreements have prevented companies from using their apps to inform users that lower prices are available through their own websites, to advertise the availability of promotional discounts,…”
Does this idiot never hear about email? Actually Spotify just sent me this kind of promotional email a week or so ago.
There is nothing to say that Apple can’t enforce guidelines in which to do so and dictate how that process happens so that it is uniform, and flawless to the best of it’s ability. However, not letting the app of a competitor (of a service they too provide) sign in – or sign up though their own servers deserves scrutiny. Also, taking a cut from a competitor for signing in and signing up is beyond fishy. In app purchases are one thing, but a monthly subscription is not on par with it since the service can be accessed from multiple points. This isn’t another level on angry birds, it’s a monthly bill that has nothing to do with apple.