Apple loses UK App Store monopoly case, penalty might near $2B

Original Article ↗ Hacker News Discussion ↗

Scope of Monopoly and the 30% Figure

  • Debate over how broad Apple’s power really is: critics frame it as “every business pays 30% to reach mobile users”; others counter that:
    • Only iOS app distribution is affected, not all businesses.
    • Historically 30% applied to paid apps and digital goods; now many apps pay 15% or nothing.
  • Clarification that pre‑2020 it was effectively a blanket 30% on paid apps and most in‑app digital purchases; some categories (Uber, Amazon, etc.) were exempt from IAP but still paid the 30% “distribution” cut on paid apps.

How the Tribunal Got to 17.5%

  • People ask where 17.5% comes from.
  • Quoted judgment: tribunal compared other platforms (Epic Games Store, Microsoft Store, Steam’s lower tier), concluded a competitive range of 15–20%, and simply took the midpoint (17.5%) via “informed guesswork.”
  • Some call this “made up”; others reply that this is literally what courts do when reconstructing a counterfactual in a monopolized market.
  • Disagreement whether Google Play should be a benchmark, given it is itself alleged to have similar competition issues.

What Is a “Fair” Commission?

  • Answers range from 0% (“already paid via hardware margins”) to 5–10% (anchored to payment processors) to “anything the market will bear if there is real competition.”
  • Strong view that the core problem isn’t the percentage but exclusivity: Apple both owns the OS and is the only allowed store and payment channel.
  • Many argue the only principled answer is: let third‑party stores and payments compete; then the market discovers the fair rate.

Sideloading, Third‑Party Stores, and Security

  • One camp: iOS’s gatekeeping is essential to prevent mass malware, spyware, and app‑driven fraud; opening to sideloading would re‑create the Windows XP “adware hell.”
  • Opposing camp: security comes from sandboxing and OS design, not store monopoly; macOS and PCs allow arbitrary installs and are not overrun; App Store already hosts scams and spyware‑like apps.
  • Some argue for strong warnings and “dumb‑user” modes, not a universal ban on alternative stores or direct .ipa installs.
  • Concern that Google is now copying Apple’s lockdown (verified‑developers signing, attestation), creating a de facto duopoly.

Comparisons: Steam, Consoles, and Others

  • Steam also takes ~30% but:
    • Operates on open platforms (Windows/Linux).
    • Decreases its cut at high volumes and provides substantial discovery/promotion.
  • Console stores (Sony/Nintendo) similarly charge 30%, but their hardware doesn’t dominate general computing and critical services (banking, messaging) the way phones do.
  • Many say the Apple case is different because iOS devices are effectively essential infrastructure and Apple bars rival stores and toolchains.

Fines vs Structural Remedies

  • $2B is characterized as “a couple of days of global revenue” or “a few days of profit”; likely cheaper than giving up monopoly rents.
  • Some suggest fines should scale with global revenue or escalate daily until compliance, or be paired with personal liability for executives.
  • Others argue fines are inherently weak; real remedy should be structural (forcing separation of OS and store, or mandatory openness).

Who Ultimately Pays

  • Tribunal assumed developers pass ~50% of the overcharge to users; several commenters call that economically naive, arguing prices are set by willingness to pay and devs will mostly keep the windfall if fees drop.
  • Broader point: in most cases, end users ultimately bear much of the cost of monopolistic rents, though incidence depends on market elasticity.