By Dan Moren

March 25, 2024 7:01 AM PT

EC investigates Apple and other tech gatekeepers over DMA compliance

Europe’s Digital Markets Act continues to be the gift that keeps on giving—a gift Apple probably wishes it could return. The European Commission today announced that it was opening a slew of investigations into big tech companies over their non-compliance with the DMA, including Alphabet, Meta, and Apple.

Apple, in particular, has found itself in the crosshairs for three different areas. First, that the company may have put too many restrictions on developers who want to steer customers outside of the App Store. (Apple recently relaxed those rules, including ditching mandatory design templates.)

Secondly, in the area of user choice, the EC is concerned Apple has not done enough to allow users to choose what software is installed on their phone. That includes the ability to uninstall built-in apps, change default app settings, and provide screens allowing users to choose between alternatives. The EC’s announcement particularly calls out the browser choice screen, though it doesn’t specifically details its concerns beyond saying it “may be preventing users from truly exercising their choice of services within the Apple ecosystem.” The screen currently shows up when users first launch Safari on iOS and provides a list of the eleven most popular browsers in the region, in random order. However, Apple does impose some restrictions on what it takes to be included in that list, including a requirement that the app has been downloaded 5000 times in the EU over the past calendar year.

Finally, and perhaps most contentiously, the EC says that it is investigating the fee structure of Apple’s new business model in the EU, saying that it “may be defeating the purpose of its obligations under Article 6(4) of the DMA.” That decision was hinted at this past week by Margrethe Vestager, the executive vice president in charge of competition policy, when she said in an interview with Reuters “if the new Apple fee structure will de facto not make it in any way attractive to use the benefits of the DMA. That kind of thing is what we will be investigating.” This also comes on the heels of an EU-Apple workshop about the DMA last week, during which developer and AltStore proprietor Riley Testut asked Apple representatives how they would protect creators of free apps if those apps went viral, putting them on the hook for Apple’s new Core Technology Fee. Apple’s Kyle Andeer said the company was likewise concerned and that it was “something we’re working on,” though no further information has been provided.

These investigations aren’t going to be speedy: the EC says they will be concluded within 12 months, at which point the body will tell the companies what changes if any need to be made. The companies may also be subject to fines of up to 10 percent of annual global revenue, or 20 percent in cases of “repeated infringement.”

Apple, for its part, said in a statement provided to several outlets, including The Verge: “We’re confident our plan complies with the DMA, and we’ll continue to constructively engage with the European Commission as they conduct their investigations.”

Dan’s take

The DMA and the EC are clearly proving to be a thorn in Apple’s side. Despite the company trying to get ahead of these kinds of issues, apparently its attempts to do the minimum needed to comply weren’t quite enough. The specific issues over anti-steering policies and user choice are certainly annoyances, but seem like issues that can be tweaked by Apple without serious impacts to the company.

But the big risk here is the investigation into the fee structure. Big companies like Meta and Spotify seem unlikely to ever have used Apple’s new business terms as proposed: they would go from paying Apple nothing under the current App Store terms to paying Apple quite a bit—a scenario that Apple wins either way. While those companies might want more control over the distribution and monetization of their apps, they’re not going to do so at the literal expense of millions of euros. Likewise, while small developers might find the new terms comparatively more attractive, especially for types of apps that will never get approved by Apple, the risk of “hitting it big” and triggering the CTF could likewise be too high. And though Apple opened up the avenue for web distribution, the strictures it put on place as to who is allowed to use the feature—such as a calendar year threshold of one million downloads—certainly limits a lot of small developers. While that last isn’t specifically mentioned by the EC, I have a hard time imagining it’s not part of the overall investigation into the fee structure.

The real challenge for Apple will be in trying to figure out what changes it can make in the near term to both avoid the heavy end of the EC’s hammer and dodge further pitfalls along the way. Gee, sure is tough when your business is entirely subject to the whims of a seemingly capricious organization who won’t tell you exactly what rules you need to follow, isn’t it?

[Dan Moren is the East Coast Bureau Chief of Six Colors. You can find him on Mastodon at @dmoren@zeppelin.flights or reach him by email at dan@sixcolors.com. His latest novel, the supernatural detective story All Souls Lost, is out now.]

By Jason Snell

March 21, 2024 10:12 AM PT

U.S. versus Apple: A first reaction

The U.S. Department of Justice, 15 states, and the District of Columbia sued Apple on Thursday. While I am not a lawyer, I’ve written extensively about Apple for 30 years and just read all 88 pages of the full complaint. Here are some initial reactions:

Defining a “monopoly.” Before we get to some of the details of Apple’s specific anti-competitive behavior, it’s worth noting that this suit is charging Apple with violations of the Sherman antitrust act, which is meant to specifically regulate monopolies. Things that are legal for regular companies to do become illegal when monopolies do them.

Part of this document, then, has to establish that Apple holds monopoly power over a specific market. Given that Apple’s share of the U.S. smartphone market is about 60 percent, how can it be called a monopoly? The DoJ attempts to square this circle in a few different ways:

• It uses revenue instead of unit sales, pointing out that Apple and Samsung combined hold 90 percent of the U.S. smartphone market by revenue.

• It creates a new sub-market, the “Performance Smartphone,” which pushes Apple up to about 70 percent of the market in terms of unit sales.

• It accuses Apple of attempting to create a monopoly through its various business tactics, which is also illegal.

Questions I would ask about this approach: Can you add in Samsung, find a number starting in ninety, and declare something a monopoly? Is revenue share how monopolies are defined? Can you draw borders on a product category in a beneficial way in order to declare it a new market?

Apple’s position in the U.S. market is certainly strong, but regardless of how you view its behavior, it will be interesting to see if the DoJ can make a convincing case that Apple is actually a monopoly, given the presence of Samsung and Google in the market.

Suppressing cross-platform technologies is key. One of the DoJ’s primary arguments is that Apple has reduced competition by making it hard for developers to deploy cross-platform software—in other words, software that works the same on both iOS and Android. This, in turn, makes it harder for iPhone users to switch to Android, which reduces competition.

Among the examples it cites:

• “Super apps,” which provide multiple kinds of functionality and mini-apps within a single app container, written in HTML and JavaScript. WeChat is never named, but its ubiquity in China is alluded to, and the argument is that it’s a reason that Chinese users can switch phone platforms more easily.

• Cloud streaming games, which make the power of smartphone hardware less relevant, thereby freeing consumers to buy cheaper, low-powered phones and still play games.

• Messaging apps not being able to have access to incoming SMS messages. (Yep, I was surprised too.) The argument is that because incoming text messages come to the Messages app, Apple is feeding users into its own chat app ecosystem and putting other messaging apps at a disadvantage.

• Smartwatches, specifically access to the iPhone for non-Apple smartwatches. The DoJ says that by not allowing third-party watches access to messages and the ability to maintain consistent connections to the iPhone, Apple is suppressing competition in the smartwatch market and making it harder to switch. In theory, if you could buy a competitor to the Apple Watch and use it on the iPhone, you could then later switch to Android without a penalty.

• Digital wallets. By controlling the iPhone’s digital wallet tech, the suit alleges, Apple has increased “friction” in moving to a different smartphone platform, and denied users access to alternative wallets provided by their banks.

Apple’s total control is an issue. It’ll be familiar to anyone who has been following Apple’s adventures in Europe with the Digital Markets act, but another argument here is that Apple exerts its power over its platform to limit developers and users. This comes in numerous forms, including capricious and self-serving App Store policies and the failure to offer third-party access to APIs that Apple itself uses in its apps.

Apple’s only concerned about user security when it’s convenient. The document alleges that Apple talks a good game when it comes to privacy and security, but that it favors them when it’s convenient and not when it’s not. It calls Apple’s privacy and security justifications an “elastic shield that can stretch or contract” to serve Apple’s interests. The examples in the document include continuing to rely on the insecure SMS protocol for cross-platform texts and letting Google be the default search engine when more private options are available.

Lock-in will be on trial. Many of the DoJ arguments come down to this: Every feature that Apple builds that makes it harder to switch to an Android phone is fundamentally anticompetitive. It’s clear that the DoJ envisions a competitive smartphone market—or, if that doesn’t work, performance smartphone market—as one in which there’s as little friction as possible when jumping between platforms.

This would mean Apple offering third-party app access to features it currently keeps for itself. (One could argue that Apple’s behavior has already begun to change due to pressure, as it launched its new Journal app alongside an API that gives other apps access to the same data as its own app.) It also suggests that policies against game streaming and web apps would also come under scrutiny.

The DoJ congratulates itself. For me, the most unexpected part of the document was the DoJ’s explanation that Apple’s success as a company largely stems from… the DoJ itself. It points out that Apple’s resurgence early in this century was due to the release of the iPod, which only became a hit when it arrived on Windows. The DoJ argues that the iPod’s presence on Windows was only due to Microsoft being under a consent decree from the DoJ for monopolistic behavior.

I don’t know enough about the specifics of the Microsoft consent decree to weigh in on the idea that an unconstrained Microsoft would have made it impossible for Apple to make the iPod compatible with Windows. It’s a pretty big hypothetical, and I’m skeptical, but I’m impressed that the DoJ would try to place its current case within the larger DoJ Connected Universe.

A few howlers. Some arguments in the document seem silly. A section describes how Apple will use its sinister market powers to dominate the automotive industry by… inflicting CarPlay 2.0 on users? Not only is Apple struggling to get CarPlay into cars by major American manufacturers, but I’m not sure how better integrating our phones (which we love) into our car infotainment systems (which we frequently do not love) is some sort of tragic outcome. (Update: Nilay Patel of the Verge suggests the implication is that Apple won’t let carmakers support CarPlay in the future unless they let Apple take over the entire auto interface. That would certainly be a power move, but the DOJ will need to prove that for it to become more than another scary story told around a campfire.)

And then there’s the danger of Apple, tech giant, affecting “the flow of speech.” How, you might ask? The answer is Apple TV+, where Apple has committed the grave sin of “control[ling] content.” Be right back, gotta find some pearls to clutch.

United States v. The People of the United States. What strikes me most about this document is that people… like using the iPhone? This suit (joined by 16 other attorneys general, mostly of blue states) has a political element to it, in the sense of trying to send a message that your government is looking out for your rights and protecting you from big, bad tech companies.

What happens when that collides with a product that has extremely high customer satisfaction ratings? Those of us in the know are well aware of all the ways that Apple plays hardball, and understand that the company is so powerful that really the only way it will be convinced to change its ways is under threat of government intervention. But will American iPhone users feel like the government is on their side, in taking on an American tech giant that makes a product they actually enjoy using?

I doubt most regular people will get into the weeds with this stuff, but some of the depictions in the lawsuit really are topsy-turvy. Imagine trying to sell regular people on the idea that they’d be better off with a bunch of different banking apps implementing NFC payments in random ways, rather than using the Wallet system Apple built. No doubts the banks disliked it, and they certainly despise that Apple skims some money off of every transaction, but there’s no denying that Apple’s approach actually did favor the user… and that Apple used its power (or “monopoly power,” if you’re the DoJ) to force the banks to play ball.

This one issue seems like a microcosm of the entire case: Apple undoubtedly has huge market power, owing to its success in the market. Apple uses that power to make decisions that frequently benefit its users and enrich itself. (Sometimes it’s one or the other, but usually it’s some degree of both.) Is it illegal for Apple to use its power to improve the user experience? What about when it cuts itself in for some sweet Services revenue along the way? How do we tell the difference between real user benefit and phony benefit that’s really designed to allow Apple to exert its power and increase its profits?

It’s complicated. There’s some danger that Apple will no longer be able to make judgments that favor users, and that will degrade the user experience. But this is the same company that acts as if buying things on the Internet with a credit card is the height of dangerous behavior, when in fact it’s commonplace and safe. By mixing exertions of its control and power with notions of user benefit, it risks losing all of it.

What’s next? Again, not a lawyer. What I’ve learned in observing three decades of government interaction with tech is that the most likely outcome is one that doesn’t make a whole lot of sense. I could create a list of Apple behaviors that I consider to be anticompetitive and unfriendly to consumers, but many of them are barely touched on in this document.

So my prediction is that this will be a long, drawn-out process that will end up with Apple changing some of its policies. Some of those changes will be substantial and will alter how the company operates; others will be pointless and cause no appreciable effect; and still others will degrade the experience of iPhone users without increasing competition. Meanwhile, other Apple policies that stifle competition, degrade the user experience, and cost users money will just go on as usual, unchanged and unchallenged.

By Jason Snell

March 20, 2024 3:08 PM PT

MLB app will slow itself down, let your media stream catch up

When I wrote about Apple’s new Sports app, I heard from several people who pointed out that maybe Eddy Cue had done his job a little too well. Apple’s SVP of Services told me that he was prioritizing speed, right down to measuring the lag between the scoreboard at the Warriors game he was attending and the current score in the Sports app.

The problem with that lag is that while radio and TV broadcasts are often a fraction of a second behind live action, streaming radio and TV broadcasts tend to be far, far behind the action. So far behind that Apple Sports was indicating made baskets in NBA games while the team was still coming up the floor with the ball. (I experienced this myself when a friend texted me to give condolences about the Super Bowl about 30 seconds before Kansas City scored in overtime to win it.)

Streaming lag is real. So real, in fact, that I just discovered a new setting in the Major League Baseball app that I had never seen before. Under Notifications, there’s a setting for Delayed Gameday Notifications. “Turning this on will delay live Gameday notifications by 30 Sec.,” reads the legend under the setting.

This is hilarious, and absolutely necessary. Many times, I’ve had game audio playing for an MLB game, only to notice that the Gameday play-by-play was way ahead of the action. It’s… not great!

In the long run, it would be nice if MLB could use some more advanced technologies to ensure that its data feeds and media feeds were running at the same pace—maybe take a page from what Apple’s doing with podcast transcripts? But offering to delay the data by 30 seconds so that the media stream can catch up is a great first step.

By Joe Rosensteel

March 20, 2024 9:35 AM PT

It’s time for a new AirPort

Jason recently reviewed the new M3 MacBook Air, and a key feature of the new models is Wi-Fi 6E support. Wi-Fi 6E is a big deal because it adds the 6GHz spectrum to the 2.4GHz and 5GHz bands we’re all used to.

The M3 Air also adds support for Wi-Fi 6E, while the older M2 models only support Wi-Fi 6. The difference is real. On my home Internet connection, I was able to get 931 Mbps down and 813 MBps up via Wi-Fi, which is more or less the same speed as my wired connection to my router. In the same spot, my M2 Air could only manage 618 up and 700 down. I wouldn’t buy a new laptop just to have faster Wi-Fi—and keep in mind that you need to upgrade your router and possibly your home internet to take advantage of these speeds—but that’s the fastest Wi-Fi connection I’ve ever experienced.

Jason didn’t get that speed boost from an Apple-made wireless router, because Apple got out of making those long ago. He didn’t get that speed from a wireless router currently for sale at the Apple Store because the only two options are the Linksys Velop AX4200 WiFi 6 Mesh System, and AmpliFi Alien Router (with optional mesh extenders). Linksys does make a version of their Velop mesh network with 6E, but it’s not for sale through Apple.

Jason used an Eero 6E router, and wasted half a day trying to change his network topology to allow for it so he could see that speed difference.¹

It seems like a great time for Apple to sell a friendly 6E router.

Apple was the catalyst for consumer wireless internet with AirPort, but after a decade-plus of glory, they wound down AirPort and it quietly disappeared. Not with a bang, but with a whimper. The last new AirPort product was released in 2013. The AirPort team dispersed to other teams in Apple, like the group working on the 4th generation Apple TV in 2016. In 2018, the death was official. Having left an indelible mark on the wireless router industry in the form of plastic roundrect routers and bespoke “friendly” utility software, Apple left the field.

The thinking at the time was that Apple wasn’t really competitive in the market, just like they weren’t competitive in external displays, so why bother expending resources on such a thing? Other companies had the market covered, and most home Internet routers came with Wi-Fi, so why bother?² Let Apple reserve its magic dust for something other than commodity hardware with thin margins.

I never agreed with that line of thinking, because networking underpins everything that Apple does care about. Every Mac, iPad, Apple TV, HomePod, Vision Pro, and most importantly every iPhone. The iPhone is a cellular device, but when you’re at home, you’re on your Wi-Fi network. If your iPhone and your wireless router aren’t playing well together than you are an unhappy person.

The performance, reliability, and ease of use of your home network really matters a lot to you, and everyone you share your home with, along with all of their devices. Just start counting everything in your home that’s on your Wi-Fi network right now.

When my AirPort Extreme died in 2019, I needed to replace it, and I didn’t need a mesh network, so I went with a terrible Wirecutter pick, the Netgear Nighthawk R7000, which would just periodically stop being on the internet until I hard-rebooted it. The Nighthawk’s design wasn’t from the Apple-aping school of rounded corners—it was presumably made by and for men who were Very Serious About The Internet, which is why it looked like something you might find in the Batcave.

When I moved to a home that needed a mesh solution, I was again disappointed in a product: the Eero, which occasionally has undiagnosable flaky moments, and always bumps one of my smart plugs off the network when it restarts after a software update.

We all love AirPort security

Let’s not forget about how your router figures into your security and privacy, which are both things Apple cares about. To get around sketchy networking, Apple has added iCloud Private Relay to operate on any network inside and outside your home. However, sometimes iCloud Private Relay doesn’t get along with a network, or a service. You have no recourse but to toggle it off, and see if the site works. Wouldn’t it be nice if there was a blessed Apple router in your home that iCloud Private Relay would always play nice with?

Apple also obfuscates your devices on a network, which is a great feature on untrusted networks. However, when I am at home, it sometimes decides to play Cold War spy games with my Eero router. Occasionally a handful of devices will simply be “Unnamed Device” and I have no idea what each one is. What if an Apple-blessed router could be consistently entrusted with my device names?

While I don’t have any little tweens getting into trouble online, I know that parental controls are a big deal for some people, and they have to set those parental controls on Apple IDs and on routers, and etc. What if that was unified?

Home is where the hub is

Putting aside the absolute mess of the software side of Home, let’s discuss the networking side of Home. Apple leans heavily on Apple TVs and HomePods to provide the networking backbone for all the connected smart home devices you have.

I’m not sure that’s a useful strategy because when there are issues with your home network, the device designated as your Home Hub loses the game of musical chairs, and a device you do not want to be Home Hub is selected. You want a device that has robust connectivity, which is usually the most modern Apple TV you have (except the $129 one they’re selling without a Thread radio, and without Ethernet).

The device that has the most robust connectivity in my home is my Eero wired to my fiber connection, and its affiliated Eeros. Eero’s Thread network is not compatible with Apple’s approach to Thread, which is just great. Some day Matter might deliver on its promise, but I’m not holding my breath.

What if Apple shipped mesh network devices? Devices that could be the backbone for a Home initiative that Apple allegedly cares about?

Bring back spinning disks!

I’m just kidding about enthusiasm for spinning disks, but one of the strengths of Apple’s AirPort line was that you could shove Time Machine backups somewhere that wasn’t wired to your Mac. Time Capsule was a slow hard drive crammed into the white plastic of your internet router. There was also an option to hook up an external drive to your AirPort Extreme over the USB cable. It was a good idea, because it took something hanging off of your Mac and moved it somewhere else where it could be quiet. Also not everyone wants to build and maintain a NAS.

Yes, backing up a Mac via Wi-Fi back then was slower than doing it over a wire, but wireless networking was also slower back then. I would be interested to see what Apple could do with a 6E router. Surely it’ll never be blistering speeds, but it could be a quiet, competent solution.

And just think of how much they could charge for that embedded solid-state storage! They’re leaving money on the table! Bleed us dry, Tim! Sell a line of them: AirPort Express mesh nodes, AirPort Extreme with ports, AirPort Ultra with Time Capsule (just skip the titanium finish).

Step 4: Profit

I know that it’s still easy to argue that Apple doesn’t need to make wireless routers. They won’t make enough money to make it worth the effort. Whatever “enough money” means is so flexible when you think about all the various things Apple does make. Those networking boffins are better allocated to other products, rather than making commodity hardware.

The return of Apple to the monitor market illustrates how effective Apple’s integration can be when it comes to supposedly superfluous product categories, especially when those products complement or support the products Apple already makes lots of money on… like the Macs it sells that use those displays. It’s called synergy, people.

Designing networking solutions in every device to work around the one component Apple doesn’t want to make is a lot of effort. The R&D can’t cost more than a self-driving, bread-loaf saloon, and the benefits of an Apple wireless router will lift all of Apple’s products. It’s time to head back to the AirPort³.

[Joe Rosensteel is a VFX artist, writer, and co-host of the Defocused and Unhelpful Suggestions podcasts.]

By Dan Moren

March 18, 2024 4:46 PM PT

Apple’s still thinking about the Core Technology Fee in Europe

Developer Steve Troughton-Smith watched all of today’s workshop between Apple and the EU on the Digital Markets Act and posted some highlights on Mastodon.

Of particular interest was an exchange between Apple’s representatives and Riley Testut, the developer of AltStore, an existing third-party places to get apps for jailbroken iPhones. Testut has already announced that AltStore will be available as a third-party app marketplace in Europe under the DMA. I’ll embed the post with the video below because it’s worth watching, but 9to5Mac has transcribed it as well.

During the workshop, Testut used his time to ask about the Core Technology Fee. Under Apple’s new business terms in Europe (required for apps looking to be distributed via non-Apple app marketplaces or the web), there’s a €0.50 fee per app install over the first million. Testut rightly points out that a free app, such as the one he made in high school, that becomes popular could easily accrue enough costs to ruin a young developer’s life.

Apple VP of Legal Kyle Andeer responded sympathetically, saying that the company is continuing to try and find a good solution, and to “stay tuned.”

Obviously, we’ve already seen plenty of alterations in Apple’s original DMA plans, including the late addition of Web Distribution, but this certainly seems to suggest that further changes are coming.

The CTF has been a point of contention amongst developers; it certainly provides a potential disincentive for those looking to distribute apps outside the App Store—especially in cases where those apps derive revenue from other places, such as subscriptions not available via in-app purchase or advertising. (And yes, to be clear, that is exactly why Apple is putting that fee in place.)¹

But free apps in particular seem to be the biggest sticking point. When the App Store debuted with the commission model, it was a relatively simple matter to say that if an app made no revenue, then Apple charged the developer nothing. But not all free apps are created equal, as the boom for in-app ads and subscription services have shown. That’s a bed of Apple’s own making, but it shouldn’t be surprising the company is trying to course correct to close those loopholes—that same impetus has been at the heart of a lot of its questionable App Store policy decisions over the past decade-plus.

Still, apps that are completely free—including open-source apps—certainly don’t seem like they should be subject to the Core Technology Fee. The question, from Apple’s perspective, is how to police that? What about, say, an app that’s distributed for free outside the App Store but has a big Patreon community that brings in a lot of money?

That in turn leads to the root of the question: does Apple deserve to get a cut of apps not distributed from its marketplace? There’s no arguing that the company has benefited from the huge ecosystem of software available for its devices, especially the iPhone. And as the CTF is currently structured, it could very well lead to a chilling effect amongst young developers who can’t risk the downsides—a category of people who Apple has made a big deal of specifically championing

I’m skeptical the entire CTF will end up discarded, but I do suspect that there will be additional carve-outs to come, especially for free/open-source apps (or perhaps Apple will greatly increase the amount of installs before the CTF is triggered, thus even more specifically targeting its biggest rivals). It’s been almost a week since the last changes, so keep your eyes peeled to see if a new batch is incoming.

[Dan Moren is the East Coast Bureau Chief of Six Colors. You can find him on Mastodon at @dmoren@zeppelin.flights or reach him by email at dan@sixcolors.com. His latest novel, the supernatural detective story All Souls Lost, is out now.]