Potential Game Changer For Apple Biz Model
Apple is set to take the stand Monday in a landmark trial that could alter the business model of the country’s most valuable company and serve as a catalyst for new antitrust laws.
Apple is being sued by Epic, the maker of the popular video game Fortnite, for allegedly using its control of its mobile operating system to stymie competition. Apple kicked Fortnite off the App Store last year after the video game maker offered an alternative payment option to its customers, bypassing the mandatory 30 percent commission charged by Apple.
Up for debate is how Apple allows apps to function on iPhones. The only way to install software on Apple’s mobile operating system, called iOS, is through the company’s App Store. Developers who make software for iOS must follow Apple’s rules and use its payment system, which charges a commission on every sale.
The trial will determine whether Apple’s control over iOS is a monopoly, and whether Apple can use that control to force developers to use the App Store and its payment system. One possible outcome in the case is a very different smartphone landscape, in which the powerful computers in everyone’s pockets operate more like desktop computers, where any kind of software is allowed to exist.
Apple is also facing pressure from European regulators, who are looking into several aspects of Apple’s business. On Friday, the European Commission made a preliminary ruling that Apple is in violation of European competition law in the music streaming industry. The charge stems from a complaint brought by competing streaming service Spotify in 2019.
Apple is being sued by Epic, the maker of the popular video game Fortnite, for allegedly using its control of its mobile operating system to stymie competition. Apple kicked Fortnite off the App Store last year after the video game maker offered an alternative payment option to its customers, bypassing the mandatory 30 percent commission charged by Apple.
Up for debate is how Apple allows apps to function on iPhones. The only way to install software on Apple’s mobile operating system, called iOS, is through the company’s App Store. Developers who make software for iOS must follow Apple’s rules and use its payment system, which charges a commission on every sale.
The trial will determine whether Apple’s control over iOS is a monopoly, and whether Apple can use that control to force developers to use the App Store and its payment system. One possible outcome in the case is a very different smartphone landscape, in which the powerful computers in everyone’s pockets operate more like desktop computers, where any kind of software is allowed to exist.
Apple is also facing pressure from European regulators, who are looking into several aspects of Apple’s business. On Friday, the European Commission made a preliminary ruling that Apple is in violation of European competition law in the music streaming industry. The charge stems from a complaint brought by competing streaming service Spotify in 2019.
