Apple has further reacted to the Australian consumer watchdog’s survey of app markets, and this time rejected the characterization that the Apple App Store is the most dominant app market and says that there are other options for iOS users, for example by going to a website.
“Apple perceives and treats other distributors of apps, for platforms other than iOS, as important competitors whose pricing and policies limit Apple’s ability to exercise power over developers,” the iPhone maker said in a post. [PDF] to the Australian Competition & Consumer Commission (ACCC)
Apple is not in a position to disregard the environment in which the app market operates, and does not accept the Commission̵
The App Store and Apple’s App Store are under the microscope of the ACCC as part of its digital platform probe. The ACCC is concerned with the market power that both technology giants possess in the app marketplace.
In its post, Apple argues that the ACCC’s position is incorrect based on the assumption that there is a relevant market failure as a result of Apple’s alleged market power.
“Apple does not believe the assumption is correct in the broader online context in which the app marketplace operates, and is concerned that such an assumption means that the Commission’s analysis may not examine whether this assumption is well-founded as a starting point.”
It believes that it is a healthy, competitive market.
Apple stated that it does not consider that it has a significant degree of power in any market that is relevant to the issues that are the subject of the ACCC’s current inquiry, nor does it agree that it is a market failure that requires regulatory action or legal action to solve.
“Apple faces competitive restrictions from distribution options within the iOS ecosystem (including developer sites and other outlets where consumers can obtain third-party apps and use them on their iOS devices) and outside of iOS,” it said.
“Even if a user only owns iOS-based devices, distribution is far from limited to the Apple App Store because developers have several alternative channels to reach that user.
“The entire web is accessible to them, and iOS devices have unlimited and uncontrolled access to it. A common approach is for users to purchase and use digital content or services on a website.”
The Cupurtino giant also believes the Apple App Store competes directly with other software distribution platforms, such as Google Play, Samsung Galaxy and Amazon app stores, although access to these “options” is not provided on iOS.
It also said it competes with various online app stores such as Steam, Epic Games Store, PUBG, AppStream, Chrome Web Store, Setapp or Microsoft Store.
At this time, app developers are not able to publish and distribute an app on an Apple mobile device without using the Apple App Store. Developers who offer features, add-ons or upgrades in the app are required to use Apple’s payment system, instead of an alternative system.
Apple also charges a commission of up to 30% to developers on the value of these transactions or when a consumer buys their app. It reduced this in November for some under the new offering, the App Store Small Business Program, which cuts commissions in half to 15% if developers earn less than $ 1 million from all their apps. Commissions go back to 30%, but if the revenue crosses $ 1 million.
Apple told the ACCC that its practice of charging a commission for certain types of transactions is not unique.
“Many platforms charge commission rates comparable to or exceed Apple’s many platforms also charge users a top-up payment service fee, while Apple does not,” it said.
“Similarly, anti-circumvention provisions are needed to protect both consumers and partners and reduce free-riding by requiring transactions to take place on their secure platforms and to secure the adopted business model.”
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