The Money Store

Allow me to try summarizing the last two weeks of tedious Apple, Epic Games, and antitrust stuff:

The legal aspects of everything here will play out in court and I have no interest in playing “backseat lawyer”. But I am sort of perplexed by each company’s strategy here — particularly Apple’s.

It seems like these two corporate giants — though “giant” at different scales — are very happy to test how much they can piss off users and regulatory bodies. Epic is being belligerent in its steadfast refusal to play by the iOS App Store rules. Apple is going all-in on whatever it can get away with. Both of these angles make a bunch of Fortnite players miserable pawns in a business fight which, I recently learned, will only be interesting in film if the screenplay is written in Sorkinese.

Since Apple, as a company, is valued at a staggering amount and views its platforms as vertically-integrated units of hardware, software, and services, it has unique leverage despite not having monopoly market share in any category. If people disliked these attributes, they could simply purchase different stuff, but Apple maintains a high degree of customer loyalty across its product categories. It is reasonable to assume that users are not bothered by these qualities or perhaps even prefer them. It is also possible that users have trouble switching away but I maintain that Apple’s ecosystem has less of a lock-in quality than other major tech companies; it’s just more obvious.

Even so, the mess of lawsuits and investigations into its behaviour means that there are questions about whether it is squeezing its platforms too tightly. None of these legal cases are directly about customer experience, which has no definition in law and cannot be quantified, but they have everything to do with whether Apple is breaching the trust of its users — whether it has overextended its interpretation of its corporate rights and minimized those of its users.

One of the things I keep wondering about everything here is what it would take for Apple to change course if the law were not involved. I wonder how much control it would be able to exert before users began to switch away in large enough numbers that it would cause consternation in Cupertino. But, then, I also wonder why it would even get to that level — no company should be pushing so hard as to test customer loyalty and trust. This Fortnite thing gets awful close for some players, I imagine. Some will simply stop playing; others will play on another console. But some might decide that they no longer want to be a part of Apple’s ecosystem. You can have all of the gaming consoles you want and switch between them, but most people only have one phone.

The investigations in Australia and Italy are a little different. Australia is looking into App Store policies from users’ and developers’ perspectives, similar to the U.S. antitrust investigation, while Italy’s regulators are asking whether cloud storage services have fair user agreements.

From a gambling perspective, the certainty of maintaining similar App Store rules for twelve years with the possibility that they might be changed is, I suppose, a more logical position than making alterations with a similar uncertainty of future investigations. But it has left Apple in the difficult position of maintaining that its business practices are not unlawfully anticompetitive — and risks having them altered, possibly in unique and conflicting ways, by different regulators around the world. That seems out of character for a company as controlling as Apple.

The short and decidedly non-legal take here is that Apple’s control has frayed its relations with third-party developers and it is pushing users’ trust. So far, everything is more-or-less holding: many developers need Apple’s platforms and I doubt they are shedding users in meaningful numbers. But it is bizarre and troubling that we are having this conversation. It suggests that Apple is increasingly finding ways to financially exploit its products for self-enrichment at the expense of users and developers. From a strategy perspective, as far as I am concerned, that is not as inspiring as make great products that practically sell themselves.