Apple ecosystem at risk from US antitrust legislation – analyst

Analyst Ben Thompson believes that US antitrust legislation could put the Apple ecosystem at risk unless the company is prepared to compromise on the App Store.

The danger is that legislators may view the various ecosystem components as anti-competitive, but would be less likely to do so without the App Store playing such a central role …

Background

We recently summarized the background to some new planned antitrust legislation in the US.

2019 saw the start of a year-long investigation into whether tech giants were guilty of anti-competitive behavior. Apple was one of the companies investigated, with Tim Cook required to testify before Congress – and was among the tech companies found to engage in “deeply disturbing” anticompetitive behavior.

It was initially expected that the result would be a single antitrust bill designed to address all of the issues revealed, from tech companies like Facebook buying up rival social media platforms like Instagram, to Apple favoring its own apps over third-party ones.

However, we learned back in March that it was possible the Democrats would instead introduce muitiple antitrust bills, each designed to tackle different issues.

One of those bills is the American Choice and Innovation Online Act, which includes the following provision:

It shall be unlawful for a covered platform operator to own or control a line of business, other than the covered platform, when the covered platform’s ownership or control of that line of business gives rise to an irreconcilable conflict of interest.

Apple ecosystem at risk

The primary threat to Apple is the way it runs the App Store. But Ben Thompson believes that unless Apple offers its own compromises, any action taken could threaten the entire Apple ecosystem.

One of the central planks of many of those pushing for new laws in this area are significant limitations on the ability of platforms to offer apps and services, or integrate them in any way that advantages their offerings.

In this potential world it’s not simply problematic that Apple charges Spotify 30%, or else forces the music streaming service to hope that users figure out how to subscribe on the web, even as Apple Music has a fully integrated sign-up flow and no 30% tax; it is also illegal to incorporate Apple Music into SharePlay or Shared-with-you or Photos, or in the most extreme versions of these proposed laws, even have Apple Music at all. This limitation would apply to basically every WWDC announcement: say good-bye to Quick Note or SharePlay-as-an-exclusive-service, or any number of Apple’s integrated offerings […]

This, more than anything, is why Apple should rethink its approach to the App Store. The deeper the company integrates, the more unfair its arbitrary limits on competing services will be. Isn’t it enough that Spotify will never be as integrated as Apple Music, or that 1Password will not be built-in like Keychain, or that SimpleNote will only ever be in its sandbox while Apple Notes is omnipresent?

He argues that steps like cutting the App Store commission, and allowing alternative payment platforms for in-app purchases, may be enough to satisfy legislators if Apple acts quickly.

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