In context: Apple has long kept its walled garden tightly controlled with very few customer complaints. However, the company has faced increased criticism from developers and regulators regarding its gatekeeping. Gradually, lawsuits to force it to allow outside stores to compete and mandates from regulators worldwide have eroded the buttresses of the iOS walled garden. While they have not crumbled, some say the business model is “unsustainable,” including Mark Zuckerberg.
On Wednesday, The New York Times hosted its annual DealBook summit. Tech industry professionals and journalists attended to see and hear leaders throughout the sector espouse their opinions on everything from the future of cryptocurrency to mounting pushes for more stringent regulations for some of the more prominent corporations.
A chat with Meta CEO Mark Zuckerberg revealed that he does not think Apple can continue walling off iOS from other app stores that want to compete against it for iPhone customers’ business. He believes that isolating apps to only the App Store so that Apple can collect a 30-percent commission from every app and all in-app sales is not “sustainable or good.”
“Of the major computing platforms, Apple stands out,” the Zuck said. “It is the only one where one company can control what apps get on the device. I don’t think it’s sustainable or good. [Unlike a government], Apple obviously has [its] own interests [and] the fact that companies have to deliver their apps exclusively from platforms controlled by competitors — there is a conflict of interest there.”
He pointed to the recent dustup this week between Apple and Elon Musk as an example of what can happen when a single company has complete control over a platform. Musk alleged that Apple threatened to remove his newly acquired Twitter app from the App Store over content moderation. Musk has since said that it was all a misunderstanding and that the two are again on good terms. However, such was not the case when Epic Games butted heads with the Cupertino powerhouse.
Over two years ago, Epic challenged Apple’s closed ecosystem when it circumvented the so-called “Apple Tax” by directing Fortnite players to purchase in-game items for a 30-percent discount from a store outside Apple’s control. Apple retaliated by removing Fortnite from the App Store, which sparked a massive antitrust lawsuit.
The courts ultimately settled the case primarily in Apple’s favor, but neither party was entirely satisfied with the outcome. Both have filed appeals which continue to rage on in the judicial system. Meanwhile, Fortnite remains banned from the App Store indefinitely, eliminating Epic’s revenue stream from the iOS platform.
Twitter’s former head of trust and safety told The Times last month that if Apple or Google were to ban Twitter from either marketplace, the results would be “catastrophic.” He believes Apple and Google can use this dominance to exert pressure on content moderation. In other words, if user-generated content is not moderated in a way that Apple or Google agrees with, a threat to pull the app can force conformity and censorship.
While comparing Apple’s and Google’s manipulative powers is valid, Zuckerberg stopped short of saying they used the same business model.
“Google might control what goes in the play store [sic], but they have always made it so you can side-load and have other app stores and work directly with phone manufacturers,” Meta’s head honcho pointed out.
Of course, it is worth mentioning that the Zuck has an ongoing bone to pick with Apple over its advertising transparency policies.
In 2020, the company decided that developers needed to be more honest and forthright about the data they collect from iPhone users and how they use and share that information. Facebook immediately warned advertisers that the results of Apple’s new rules would be “catastrophic.”
So far, advertisers still seem to be advertising. So apparently, the “adpocalypse” was averted.
Image credit: Anthony Quintano