I tend to follow things closely but in the case of the Epic vs. Apple law suit (link) I haven’t had much of an interest but I thought it was interesting how Epic has bought up Apple making it exclusive to the iOS platform – I thought I might as well throw my 5 cents worth into it given that almost everyone else seems to have done the same thing. I’m assuming that they’re making the same argument that the DOJ made against Microsoft using its operating system monopoly as leverage to enable them to monopolise the browser space which in turn would enable Microsoft to advance proprietary technologies on the internet at the expense of interoperability and platform diversity.

The argument that Epic is trying to demonstrate (I’m assuming that they’re focusing solely on the United States market) that Apple is trying to leverage its dominance in the mobile space to expand into the messaging space which they would argue that 1) Enable Apple to retain customers because how leaving the platform means giving up iMessages (which would be a big inconvenience) and 2) Win over new customers by iMessage because friends and family use it so one obviously doesn’t want to be the ‘odd man out’ when it comes to being the one that doesn’t use iMessage.

Through that example the attempt by Epic is to show a pattern of behaviour which underpins their argument regarding Apple’s monopoly when it comes to software distribution on the iOS platform – the Apple AppStore is monopoly on that platform and because software isn’t portable (cross grade) between Android and iOS it creates additional friction if a customer wishes to move from an iOS device (as with the case of iMessage) which creates a capture audience and because of that captured audience combined with Apple’s AppStore monopoly, Apple has a lot more leverage over users when compared to a scenario of allowing a competing store or side loading of applications on the platform (maybe employing the notarisation which is employed on macOS. So once the user has sufficient investment they’re locked into the system (they can leave but not without significant a cost of repurchasing all their application again via the Google Play Store) and any avenue for software companies to contact a customer has to be through the store – you cannot even mention something along the lines of, “you’ll need to have an account and subscriptions can be bought through the website” is considered a big no no.

There is a problem with the argument that Epic has put forward which is the fact that Apple outside of the United States the global marketshare that iOS has is only 13% when compared to 87% being android. All Apple has to do is point to the fact that outside of the United States iMessage is minor player when compared to WeChat, WhatsApp and other messaging platforms – in fact making it exclusive to iOS has been more of a hindrance to iMessage growth and for many buying an iOS device iMessage is probably a non-factor when purchasing one since they’ll probably download one of the other messengers anyway. Maybe the iMessage platform might be a larger factor inside of the United States but outside of the United States I don’t hear people even talk about iMessage – it’s always “do you have Facebook messenger” or “do you have WhatsApp”, which is where Epic’s theory falls down.

With all that being said, there are technical benefits to the App Store being the sole distributor but if Apple wishes to maintain it then at the very least they should concede when it comes to pricing – the comparison between physical products doesn’t make sense. The reason why it doesn’t make sense is because Apple isn’t keeping physical copies where they’ve got inventory of the product for the display shelf and thus have to generate sufficient return to not only cover the direct costs but also the opportunity cost of the money being tied up. Governments in the past have recognised that sometimes a monopoly is required but with that comes regulation – power generators and lines companies are two which are regulated since it wouldn’t make sense to have competing lines companies and the cost of creating new power generators is costly which block new entrants so it makes sense to keep them in their current state but regulate them.

The end result maybe that the App Store maintains the monopoly but third parties who want to provide in app purchases can use their own payment provider, another option could be to cap at 10% which would still being in enough revenue to cover the costs while maintaining control over the payment process. The question is whether this is all show, whether Apple will make some sort of move that Epic is happy with or will politicians push forward a solution that ultimately ends up making no one happy – this an opportunity for Epic to consider, if Apple does make changes to their policies whether they’re better off taking the deal and dropping the case or whether Epic is willing to take a chance and possibly end up with a solution that makes neither side happy.

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