Apple is not a monopoly claims CEO Tim Cook as two developers sue



Yesterday, we told you that four U.S. tech firms could be investigated for possible antitrust violations by the Federal Trade Commission (FTC) and the Justice Department (DOJ). Monday's report says that the former will probe Amazon and Facebook while the latter will look at Apple and Google. According to Reuters, Apple CEO Tim Cook thinks that it is fair for Apple to be under scrutiny by the U.S. government, but he says that the company is not a monopoly. During a televised interview on CBS, Cook said that while Apple does control 30-35% of the U.S. smartphone market, Apple is not too big and does not need to be broken up by the government.

Cook responded to a question about Democratic presidential candidate Elizabeth Warren's comment that Apple should spinoff the App Store by noting that Walmart is allowed to sell lower priced house brands. Still, the executive said that "With size, I think scrutiny is fair. I think we should be scrutinized. I don’t think anybody reasonable is gonna come to the conclusion that Apple’s a monopoly."

The company is being investigated in the EU after Spotify complained that by taking a 30% cut of App Store revenue, Apple is forcing its subscribers to sign up with its own Apple Music streaming service. Spotify has raised its prices in the App Store to protect its profit margins, and that means that it is priced higher than Apple Music in Apple's iOS app storefront. Normally, Spotify charges the same exact prices as Apple Music does. And the U.S. Supreme Court ruled last month that iOS users can sue Apple for acting like a monopoly by taking a 30% cut of the revenue generated by apps in the App Store. The plaintiffs in a huge class action suit allege that since Apple doesn't allow users to sideload apps, they are forced to pay higher prices for apps because of the so-called 30% Apple tax.

Netflix and Spotify both rail against the Apple tax


In a related development, Reuters reports that two app developers are suing Apple for various reasons, including the fact that it allows iOS apps to be installed only through the App Store. The suit claims that by doing this, the company is engaging in anticompetitive conduct. The developers, Donald R. Cameron, and Illinois Pure Sweat Basketball, both complain about Apple's 30% revenue cut and the policy that forces them to price their apps in tiers ending in 99 cents. Google's Android-based app storefront, the Google Play Store, has similar rules. Google charges a distribution fee of 30% on revenue collected for app purchases and in-app purchases. However, Android allows users to sideload apps and avoid the Play Store.


Apple has responded by saying that it applies its App Store policies to everyone "evenhandedly," whether or not Apple competes with a certain developer. The company notes that some of its rivals, like Microsoft, do very well by offering its apps in the App Store. Apple claims that 84% of the apps in its store are free, and says that it has paid developers a total of $120 billion since the App Store opened on July 10th, 2008.

Besides Spotify, Netflix also has been fighting back against the Apple tax. The video streamer no longer allows new subscribers to sign up for service via the iOS app. Last year, the company took in $853 million from the App Store. Since the store opened, Netflix has generated $1.5 billion from its listing, which means that Apple's cut has amounted to more than $450 million.

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39 Comments

1. Vancetastic

Posts: 1263; Member since: May 17, 2017

Odd. I fully expected him to say, "Yes, we are a monopoly!" and then chuckle evilly.

3. lyndon420

Posts: 6777; Member since: Jul 11, 2012

They are a monopoly against their user base with the closed nature and limitations, but only a small part of the population uses their products and services.

8. Vancetastic

Posts: 1263; Member since: May 17, 2017

I don't think "monopoly" is the right word for this. "Controlling" and "unfair" possibly. Anyone can simply not buy Apple stuff, as there are alternatives.

12. lyndon420

Posts: 6777; Member since: Jul 11, 2012

That's another way of saying what I said. I was being sarcastic with the inclusion of the word 'monopoly'.

25. Vancetastic

Posts: 1263; Member since: May 17, 2017

Ah! That makes sense.

24. sgodsell

Posts: 7344; Member since: Mar 16, 2013

Apple is a monopoly because they control everything. Plus when it comes to their app store. Why can't Apple allow apps to use other monetization methods? Google play allows developers to use other monetization methods, including letting those apps point to their own website. Why do you think Netflix removed anything and everything from their app for monetization? That occured back in December 2018, and Netflix can't even say within their app, if you want to pay for our service, then go to our website, or else Apple would reject their app, or anyone's app for that matter, because Apple forces every app to use Apples monetization methods. That's why Netflix removed any wording or any information gathering pertaining to any payments. Apple is just wrong with their business practices, especially with monetization.

26. Vancetastic

Posts: 1263; Member since: May 17, 2017

Nope. You can always not use Apple devices.

28. MrMalignance

Posts: 296; Member since: Feb 17, 2013

The argument of "not use Apple devices" is a non argument. This doesn't prove your point, and leaves your main argument unprotected. If you don't like onion, because of the taste, not eating them doesn't change the taste. In a similar way: if you don't like how apple does business, not using the products doesn't allow the unsavory aspects to become acceptable. We can debate all day but, no matter what we say, the official decision will be made by other people.

30. Vancetastic

Posts: 1263; Member since: May 17, 2017

Did I say it was acceptable? The only point here is that Apple doesn't fit what I think is the definition of "monopoly". Are there monopolistic things about the App Store? I think so. Is it legal? I don't know. We shall see.

32. MrMalignance

Posts: 296; Member since: Feb 17, 2013

There we go. Thank you. I am glad you can agree with me that there are questionable aspects of Apple's practices, and that this will be settled by people who know the exact qualifications of a monopoly.

4. oldskool50

Posts: 1491; Member since: Mar 29, 2019

Tim seems to think that just because they are the th leading OEMin any space, that don't don't have a monopoly. Now as far as Netflix and Spotify's complaints. I agree with them that I think 30%, taken by all of them including Microsoft and Google is too high. Here is why. Look at merchant services in general. You pay for the until that accepts credit cards and then you pay a fee. Many businesses don't accept American Express, because AmEx charges a very high merchant fee to accept their card. In fact their fee alone is much higher than Visa and MasterCard and even Discover. Now I understand AMEX doesn't have the same amount of customers as Visa or MC, but Discover doesn't either and yet they have lower acceptance fees. Now all retailers past off merchant accpetance cost to their customers. But when you consider this. Apple has 1.2Billion users on IOS along, then add the 135-140M on OS X, that is a lot of customers they can make money off of. And when it comes to IOS, it's the devs who do all the work. Yes it costs to have servers and merchant capabilities. But how much is too much to charge? Well again with volume should come a lower price. PayPal charges roughly 3-5% per transaction to accept payments. They are competitive at least. Since all purchases have to go through Apple, then they don't need to charge 30%. Since APple gets a transaction fee for accepting credit cards, and they take money from the devs too, that's plenty. devs should have to pay APple 10% tops, when you consider what credit cards are charging. And like I said in fairness, credit card merchants have lots of volume. Apple has 1/7 of the planet population using their stuff. So with that they and to get many transaction. But the devs do all the work and yes they still get paid the most, but Apple or anyone else shouldn't be taking 30% of income for something they didn't create the work for.

5. mackan84

Posts: 448; Member since: Feb 13, 2014

“Well again with volume should come a lower price. PayPal charges roughly 3-5% per transaction to accept payments. They are competitive at least.” Apple takes like 0.1% per transaction with Apple Pay. MS, Sony and Nintendo charges about 32-35% per purchase. Before 2008 app stores generally had up to 60% charges for your apps to be on there. I’m not saying changes are bad but here in Sweden we pay 30% tax for the government to take care of us and keeping us safe. The biggest players usually dev for iOS in mind because they know those customers spend more then the customers on the other stores. But you’re right. Know that Apple is so big it’s all of a suddenly a problem for certain devs. And investors in all these companies screams for more each year so Spotify bets on more from Apple and investors in Apple screams for more from them when iPhone-sales slow down. There is no win-win with investors in all these companies. Someone needs to lose for the other to win. Should it always be the biggest player? Morally yes. I wish all of the 1% wealthy of the world threw 95% of their fortune to labor at once so everyone could get a bite from it. But that won’t happen.

19. Leo_MC

Posts: 7432; Member since: Dec 02, 2011

"devs should have to pay APple 10% tops" Remember that the next time you buy a loaf of bread from a supermarket or you get a Amazon device accessory that has a recommending fee of 45%.

2. oldskool50

Posts: 1491; Member since: Mar 29, 2019

Yes you are. Because iOS apps can onmy be purchased through your store. There is a difference in selling a few exclusive items vs everything is exclusive to only you. You have a monopoly on your store. My kid loves to play Pokemon TCG. The issue is he also buys cards from retail stores like target. Inside the packs is a code you can enter, which adds the deck you bought to your online collection. Since these purchases are outside, Apple has blocked the ability to add your packs, simply because you can't buy them through the app store. That is lame Apple. This isn't an issue on Android. Also i can pir hase apps for Android from other stores. You can't with iOS. Nokia, Windows, Android, and even blackberry allowed for apps to be purchased from 3rd parties. Apple not allowing this is anti-competitive and is a monopoly What option do you have to buy iOS apps other than Apple? None. Thus it is a monopoly.

6. kiko007

Posts: 7493; Member since: Feb 17, 2016

Do you know why paragraphs exist? To keep giant walls of text concise. Your writing skills are God awful even compared to my niece in elementary school.

7. Vancetastic

Posts: 1263; Member since: May 17, 2017

Does Apple force you to purchase apps from the Apple App Store on your Samsung? Can you buy a smartphone not made by Apple? If Apple were allowed to buy every other phone maker, and every other operating system, so you had NO choice, then they would be a monopoly.

14. MrMalignance

Posts: 296; Member since: Feb 17, 2013

I see what you're trying to say. The problem is that you aren't addressing the argument. If the question is about a monopoly on the apple products and apple app store, your choice of not buying an apple phone is irrelevant. Additionally, apple forcing their store on other phones is also not the issue. That could be applied to other tech, and that tech is not being sued. This is the question was bound to be asked, due to apple choosing to be a closed ecosystem. The bottom line is that they'll weigh the evidence and claims, and come to a conclusion (which I hope is fair).

18. vgking9699

Posts: 194; Member since: Mar 01, 2019

Apple makes the iPhones, Apple makes the computer programs to use to make the apps that run on their phones They have every right to maintain security of apps functionality and make sure apps on them are only ones who follow the rules Saying Apple is a monopoly for this is like saying Toyota or Chevy are monopoly’s cuz they don’t allow you to buy brand new of their cars at other brand dealerships

20. Leo_MC

Posts: 7432; Member since: Dec 02, 2011

It can't be a monopoly on your own products, unless your product are monopolies in the market. For instance: a rye bread baker uses rye from Virginia; one can't say he has a monopoly, because you would like to get from him a bread baked with rye from Georgia.

23. MrMalignance

Posts: 296; Member since: Feb 17, 2013

You mean if the baker only makes loaves, and you want rolls. Rye is rye. Your base idea is sound, but ingredients don't make monopolies, products and services do.

36. Leo_MC

Posts: 7432; Member since: Dec 02, 2011

The app store is an ingredient of the ecosystem (you buy into the ecosystem when you purchase a device).

37. MrMalignance

Posts: 296; Member since: Feb 17, 2013

@Leo: that's not true at all. Company and product are ingredients. The services that they provide to make the ecosystem and culture are the "bread". It works with any business in the same way. To put the app store (service) before the company and hardware would be like creating computer programs before the computer was invented.

38. Leo_MC

Posts: 7432; Member since: Dec 02, 2011

The App Store is the "saltshaker", the developer's apps are the "salt". People buy iPhone, mostly because of the saltshaker, they get the flavor after they sample different types of salt.

39. MrMalignance

Posts: 296; Member since: Feb 17, 2013

@Leo: making the example more of a microcosm doesn't make it more accurate. Your current example leaves out the most important thing, power. If we use your example, that salt shaker is in a clear box (plastic or glass, whatever) and apple is holding the box down so they control how and when you get salt. That is the issue. As for flavor, the ecosystem is the flavor. The apps can't be the flavor, you already stated they are salt. Salt enhances flavor. The apps can, and do, enhance the ecosystem. This would accurately produce flavor. Also, you've really heard of people buying iPhones purely for the app store? That's kind of odd. I've never heard of people buying a particular phone due to an app store.

27. Vancetastic

Posts: 1263; Member since: May 17, 2017

I didn't say it was nice, or fair. Just not exactly a monopoly.

29. oldskool50

Posts: 1491; Member since: Mar 29, 2019

They do have a monopoly on their store, because you can't purchase apps from anywhere else. With my Samsung since you wanted to drop that bomb, I have the "option"; and that is the keyword, to purchase apps via Samsung, Google and more. Because of this, Google for sure does not have a monopoly, because there are other options. That is what you seem to miss. When you have 100% control over something, then you have monopoly. This has zero to do with Apple's marketshare with their computers, tablet or phone.. This is what makes what Tim Cook said BS. He thinks just because Apple does not have the largest market in any space, that they don't have a monopoly on something. That is simply false. Then he claimed they only have like 30% market in the US. Which was a complete lie. Breaking up Apple would be dumb. So that shouldn't even be a talking point. Apple IS NOT amonopoly, but they do have a monopoly on the app store because you have zero option to buy apps from anywhere else. and when appel charges devs this munch money, to get some of that lost money back, they will increase prices on you. And app they could have sold for just $1, now they charge $3, to make back some of the loses they have to pay Apple. Apple should not take 30% from devs. Apps can be duplicated across servers automatically. Yes automation costs money, but some devs take in millions and Apple taking 30% of that is nothign more than their usual greed and that is wrong because they get 100% of that money.

31. Vancetastic

Posts: 1263; Member since: May 17, 2017

They have 100 percent control of....Apple. Nothing else. Don't buy their products. See how easy that is?

33. MrMalignance

Posts: 296; Member since: Feb 17, 2013

Vance, you really shouldn't get all nasty about it. Oldskool voiced an opinion, and you didn't defend against it. "Don't buy their products" is still not a comeback to that argument. It's the equivalent of "your mother" or "I know you are, but what am I". If you feel that you need to reply to an argument, bring facts and proof. That way we can all have an enlightened discussion

9. vgking9699

Posts: 194; Member since: Mar 01, 2019

Being able to buy apps from other stores or websites is why android phones have more issues with bugs and adware cuz then google has no control over the security of those apps to make sure they don’t do something you wouldn’t want it to do or maybe illegal If Apple open up iOS to other App Stores then you can’t blame Apple when your iPhone is doing something you don’t like cuz Apple can’t be held responsible for apps outside their store

15. MrMalignance

Posts: 296; Member since: Feb 17, 2013

I know you're trying to make a point here....I just can't follow your logic. There have been several app stores that are able to provide apps to Android phones, none of which were plagued with bugs or adware. What you're doing here is drawing a correlation between shady app markets or peer sharing paid apps that have been tainted. Not all app markets are bad, but Google play store appears to be the safest option. It's generally not a good argument to choose exceptions and to make them the rule.

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