Apple Claims Operates 5 App Stores Not Just One

Apple claims it operates 5 App stores

The Digital Markets Act (DMA) was passed in May 2022 to allow antitrust regulators to designate large tech companies as gatekeepers. These gatekeepers have to follow strict rules to ensure fair competition among rival products.

Apple’s macOS was not designated a gatekeeper because it allows apps from third-party sources and has fewer users than Microsoft Windows. However, the iOS App Store was deemed a gatekeeper due to its large user base. Apple earns a significant 30% commission fee for all transactions that go through its payment system. The company has prevented access to third-party payment methods, which is viewed as an anticompetitive practice. Additionally, developers are required to pay Apple an annual fee to host their apps on the App Store.

Apple will need to allow iOS users in European Union countries to install apps from third-party sources, also known as side-loading apps. Once the DMA law comes into effect in March, the company will need to open up the iOS ecosystem, potentially leading to significant revenue losses as it misses out on in-app transaction revenue and developer fees. Apple challenged the Digital Markets Act in November, but details about the appeal have been scarce.

Now it appears that Apple is making a last-ditch effort to somehow preserve the App Store and the revenue it generates. Reuters reports that Apple has argued to the Luxembourg-based General Court, Europe’s second-highest, that the European Commission made “material factual errors in concluding that the applicant’s five App Stores are a single core platform service.”

Apple states that the antitrust regulator should consider the fact that it operates five different app stores, each designed for one of its devices: iPhones, iPads, Macs, Apple Watches, and Apple TVs. In other words, it asserts that the App Store for iOS, iPadOS, macOS, Apple Watch, and Apple TV are all separate. Technically, this could soon become 6 if you count the upcoming visionOS App Store.

A flawed argument or a desperate plea?

Is this argument logical? Firefox supports Linux, macOS, and Windows. Can we consider those three different browsers, or do they fall under one brand? Surprisingly, Apple previously attempted to convince the EU that Safari for iOS, iPadOS, and macOS are three different browsers, but the argument was rejected last year, and Safari was designated as a Gatekeeper.

Let’s consider other app stores. The Google Play Store is available for Android phones, tablets, and TVs. You can download an app once on a supported device, and it is available across all of your devices. They are under the same banner, right?

The Steam client is available for Windows, macOS, and Linux. Does that mean Valve has three app stores, one for each OS? No, it is platform-agnostic, meaning the clients are meant to run across devices but provide access to a single entity. It is up to developers to choose which operating system they want to release their game for. Many modern games on the platform support all three operating systems. So you can buy a game once and play it on three different machines.

Now, let’s take a look at Apple’s “App Stores.” You can download an app on your iPhone, and it automatically gets associated with your account, enabling you to download the same app on your iPad.

All the so-called 5 App Stores are accessible from the same domain, apps.apple.com, i.e., they are not hosted separately. The frontend differs between devices, as does the content available for the said device. I would also like to point out that Macs with an Apple Silicon processor can download iOS Apps from the App Store. It doesn’t take you to an iOS-specific App Store to get the apps from; they can be accessed through the App Store bundled in macOS.

Does a developer have to sign up 5 times, accepting a different agreement each time? Or do they have to sign in to 5 app stores to upload their apps? No, as a developer, you access a single store and just set a restriction as to which device can access the app. For instance, if your app is optimized for iPhones, it is exclusive to mobile devices. Or, if your app is optimized for multiple operating systems, you can set it to support each of those, and the respective version will be available for a user’s device when they browse the store. The same can be said about user accounts; you don’t sign up for a profile on each device or OS, it is universal.

Apple’s argument likely revolves around how the App Store is presented to the user on a specific device. The App Store is not merely scaled to fit the device’s screen; it only displays the apps that are compatible with the current device and the operating system that it runs on. For example, if you are using an iPhone, it lets you browse apps for iOS; you won’t see iPad or Mac apps on the store. But this is just a matter of filtering the apps based on device compatibility; it does not qualify as five app stores. The company recently revealed that there are 123 million active App Store users in Europe.

Apple says iMessage is not a fee-based service

The European Commission is investigating whether Apple’s messaging service, iMessage, should comply with the DMA. However, the Cupertino company’s lawsuit is in disagreement with the Commission’s designation of iMessage as a number-independent interpersonal communications service (NIICS).

Users in Europe prefer using third-party messengers like WhatsApp, so iMessage usage may not be as high as in the U.S. Apple says that iMessage is not a fee-based service, as it does not generate profits. However, many users, especially in the U.S., buy iPhones because they want access to iMessage and FaceTime. You can’t access iMessage on your Android, so you need to get an iPhone. This can be seen as a factor that drives iPhone sales. In case you missed it, Apple is preparing support for RCS in iOS this year to likely avoid being designated as a gatekeeper.

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