Russia Finds Apple Guilty of Antitrust Abuse

Russia’s Federal Antimonopoly Service (FAS) today announced that it has found Apple guilty of abusing its dominant position in the mobile apps market and will require the firm to resolve its regulation breaches.

“Apple occupies a dominant position with a 100 percent share of the market for mobile apps based on the iOS operating system because it is only legally possible to install such apps from the App Store,” an FAS statement notes.

The charges will sound awfully familiar to anyone who has been following the firm’s antitrust troubles in Europe and the United States: It forces app makers to deliver apps only via Apple’s online store and “unlawfully” blocks third-party apps from that store.

According to Reuters, the FAS investigated Apple after Kaspersky, a controversial Russian software maker, complained that Apple prevented it from publishing an update to its Safe Kids application. Apple’s behavior during this time period is well documented, as the firm had created its own parental controls solution and suddenly began blocking existing third-party entries to gain an upper hand. Or as Apple put it, because those apps “put users’ privacy and security at risk.”

“[Apple] reserved the right to switch off and block any third-party app from the App Store even if that app met all of Apple’s specifications,” the FAS explains.

Apple said it will appeal the ruling.

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Conversation 26 comments

  • anoldamigauser

    Premium Member
    10 August, 2020 - 2:59 pm

    <p><em>"Apple said it will appeal the ruling."</em></p><p>I am not sure that Apple understands how things work in Russia.</p>

    • ben lee

      Premium Member
      10 August, 2020 - 4:13 pm

      <blockquote><em><a href="#560381">In reply to AnOldAmigaUser:</a></em></blockquote><p>Tim Cook is an expert at befiriending dicatators.</p>

    • rbwatson0

      Premium Member
      11 August, 2020 - 9:28 am

      <blockquote><em><a href="#560381">In reply to AnOldAmigaUser:</a></em></blockquote><p>I don't think anyone understands how things work in Russia.</p>

  • nbplopes

    10 August, 2020 - 3:05 pm

    <p>This is ridiculous from Russsia.</p><p><br></p><p>Still Apple is getting what it deserves for charging 30% revenue share for something that should be peanuts if it played according to the market price rules. If it did, it would have probably 90% of the devs on its side</p><p><br></p><p>I’m mean:</p><p><br></p><ul><li>App Hosting and Downloads</li><li>App Directory</li><li>Payment &amp; Billing Processing</li><li>App Review</li></ul><p><br></p><p>30% revenue share of r a business for the privilege? … give me a break Apple!!!!!!!!</p><p><br></p><p>And no, digital services don’t have options when one in two Americans use at least one iOS device!!! A separate business that the App Store leverages on, only correlates by being a Conglomerate! Apps at the moment either accept this or have their sales processes injured! By Apple Policy! Why even the need to go around Apple? Think about that, why do devs feel the need to go around!!!!!!!???!??!?! Just one explanation, the extortionate price for the above services, way above and beyond the current market price for these services!!!</p><p><br></p><p>PS: Thurrott has nothing to complain about concidering his dear favorite Tech Team, MS, has been doing this for years with XBOX. MS couldn’t just even start dong this on Windows … that is why they are so annoyed. His way of arguing this makes no sense even though there is something to argue about!!!!</p>

    • Paul Thurrott

      Premium Member
      10 August, 2020 - 3:16 pm

      <blockquote><em><a href="#560385">In reply to nbplopes:</a></em></blockquote><p>Please don't make this about me.</p><p><br></p><p>Apple's behavior is being scrutinized BECAUSE of its market power. If Apple wasn't so dominant, it wouldn't matter, not here or in the EU at least. This is only an issue when you're dominant. </p>

      • nbplopes

        10 August, 2020 - 4:06 pm

        <blockquote><em><a href="#560389">In reply to paul-thurrott:</a></em></blockquote><p><br></p><p>I’m not saying that its about you, I’m saying that you seam to be using the same False Dilemma kind of argumentation to sustain your point as Apple uses to sustain theirs. This issue has been argued with too many False Dillemas either side.</p><p><br></p><p>The core problem is is not there is only one way to install apps on iOS, through the App Store. But that Apple using its device market and puting on top its one way to install apps, is driving their services price up so high that it even charges for services not provided by THEM (Value), rather than playing according to the market price of similar aformentioned services. </p><p><br></p><p>Let me give you an example of this happening. Take your business. For the lack of a better word, let’s says you have a Tech News site. The value of your business is fundamentally the articles you and your team write for its users. That consequentially drives your users up and allowing a new revenue share with sponsors and paying customers. You spend also something on Marketing and Tech infrastructure such as this site, to service articles, videos, so on and so forth. This has nothing to do with the value Apple or Microsoft deliver by itself, absolutely nothing.</p><p><br></p><p>Now,, say you decided to build an app for iOS and Windows. You did so, because say you believe given the nature of tech paired with YOUR ideas you could improve your customer experience within the realm of your service. You invest in making the app … again its all YOU!</p><p><br></p><p>Now you publish the App tore say the Windows Store and the App Sore say for a Price. Say $1.5. Apple charges 30% of your digital revenue gathered though YOUR APP; if unlisted Microsoft charges 5% otherwise 15%. Apart from the app binary (HOSTING), the service itself, don’t even pass either the App Store or the Microsoft infrastructure. So why the heck, if customers like what you have to offer and decide pay a bit more to unlock content served by you, that in no way touches the either Apple or MS surface apart from hosting your binary for download, that you have build, you need to share any revenue? </p><p><br></p><p>MS with Azure approaches this in ways fairer and close to the value provided. You should be paying only for the usage of the infrastructure to host the app (like you pay to host your site), and process payment. That is all at the bare basic. If eventually you decide to promote the app in either store, heck than pay the price to promote it, say include in listing or collections, to be discoverable by searching the App Store, much as you do with Google Search (These are fundamentally Ads, a way to promote your app), If you find that it does not work that when compared to say a Google Ads … heck just stop using these services, just pay for the hosting and downloading services + plus the review fee.</p><p><br></p><p>The all Store thing is just nonsense, in fact its based on the false Dillema made up with the word Store. These in digital terms are fundamentally App Servers / Hosts and Downloading services at their core. With added services on top, such as directory, search, payment …. that should be al selectable by you and all charged per usage. The economics of the digital are in no way similar to analog distribution and promotion. So comparisons with the analog space (CD/DVD distribution, etc etc), its fundamentally a Fallacy..</p><p><br></p><p>Slack, not only has do dodge these practices from Apple, Google, Amazon and Microsoft, but also needs to compete with MS price dumping ….</p><p><br></p><p>And you in the other day just classified Slack management has a bunch of crying babies when they went to courts with MS price pumping. I don’t understand your moral ground to than talk about Apple business when using the same fallacies to stand your point as the company used to stand theirs IMHO it does more arm than good to the cause.</p><p><br></p>

      • Greg Green

        14 August, 2020 - 9:57 am

        <blockquote><em><a href="#560389">In reply to paul-thurrott:</a></em></blockquote><p>Apple’s behavior is being scrutinized because it’s got a big pot of money. Russian officials are now demonstrating the same shakedown practices that US officials have been practicing for decades. Almost all of these rulings involve fines that go to governments.</p><p><br></p><p>The side reaction is that the fined companies then start lobbying politicians to prevent future shakedowns, so politicians get even more money.</p>

    • ommoran

      Premium Member
      10 August, 2020 - 3:43 pm

      <blockquote><em><a href="#560385">In reply to nbplopes:</a></em></blockquote><p><br></p><p>You are correct, in a sense. "This is ridiculous <em>from Russia."</em> This should have happened in the US / Canada / Europe long ago.</p><p><br></p><p>How egregious does your behaviour have to be that the land of the oligarchy steps in?</p>

      • Paul Thurrott

        Premium Member
        11 August, 2020 - 8:41 am

        It will happen in the US and elsewhere. No worries there.

    • Stooks

      10 August, 2020 - 6:44 pm

      <blockquote><em><a href="#560385">In reply to nbplopes:</a></em></blockquote><p>Ummm you can just NOT buy Apple products. </p><p><br></p><p>I really do not get it. They charge 30% and do basically all of the administration tasks for your app business including all financial work.</p>

      • nbplopes

        10 August, 2020 - 7:05 pm

        <blockquote><em><a href="#560438">In reply to Stooks:</a></em></blockquote><p><br></p><p>Yes. But it’s not about say Thurrot not buying. If 1 in 2 of its mobile customers have chosen iOS, how can he just not serve 50% it’s customers with its App? (potentially). When you own a digital business you need to be wherever you customer are. You don’t have any say on the devices they should use, and that is good for device business.</p><p><br></p><p>As for what Apple does. You honestly have no idea what they do man. It does not work like that at all.</p><p><br></p><p>All the actual administrative task of you business are yours to do. They run the hosting service for your app much like a web host his your site or web app. On top of it they simply provide you a payment service, that is it. The money goes them, take their cut, and when they see fit goes to you. Yes, does not go to you immediately as it happens with regular VISA, PayPal payment processing systems. It can take months to reach your account.</p><p><br></p><p>If you selling stuff without proper legal commercial business entity documentation, for commercial and VAT tax purposes, it’s on you, Apple does not grant you any business legality on that neither has the authority to do so. So yes, they Host Apps Binaries and process payments, they manage that alright, the rest is entirely on you!!!!!</p><p><br></p><p>Honestly, it’s just that bad across all the Platform centric App Stores. It’s a prank on the digitally business services.</p>

        • Stooks

          11 August, 2020 - 7:58 am

          <blockquote><em><a href="#560441">In reply to nbplopes:</a></em></blockquote><p>It’s only near 50% market share in the US. Everywhere else it is way less. </p><p><br></p><p>I understand how their app model works. I still think it is not a bad deal. If I created an app I would submit it and basically wait for my payments. I would not deal with standing up a place to download it or deal with payments. </p><p><br></p><p>Again if a developer or end user does not like it then go with the market leader (Android) and move on. </p>

          • Paul Thurrott

            Premium Member
            11 August, 2020 - 8:23 am

            This is incorrect. iOS market share is between 25 and 55 percent in much of Western Europe as well. In some European countries, like the UK, iPhone market share is higher than that of Android depending on the quarter.

            What you would do if you were a developer is … whatever.

          • Andi

            11 August, 2020 - 1:02 pm

            <blockquote><em><a href="#560519">In reply to Stooks:</a></em></blockquote><p>Apple has 58% in the US as per statcounter. That is not illegal. Illegal is when you are using that dominant position to prop your services against 3rd parties. The simplest example is Apple Music vs Spotify where we know Apple is guilty. </p>

            • nbplopes

              11 August, 2020 - 6:55 pm

              <blockquote><em><a href="#560588">In reply to Andi:</a></em></blockquote><p><br></p><p>Just the fact that you take a 15%-30% revenue share of any digital business that goes through and use it against them freely simply puts the company in a really powerful position over any business that it are or might go after.</p><p><br></p><p>They went after Music, than Books, than TV with Apple TV, than gaming with Arcade, than New, they have been moving into productivity quietly and of course Health … so on and so forth. It’s not just Spotify it’s entire digital business industry. They seam to shape the App Store policy has they move forward.</p><p><br></p><p>Peiple are looking at the billions of App Store revenue, but if you actually look at the tech landscape and how business are moving to digital along with Policy is not really that surprising. </p>

          • nbplopes

            11 August, 2020 - 6:45 pm

            <blockquote><em><a href="#560519">In reply to Stooks:</a></em></blockquote><p><br></p><p>“If I created an app I would submit it and basically wait for my payments.”</p><p><br></p><p>Is that directly from Apple App business school? Good luck with that strategy. You will run out of business in a few months if that much even if your app is great. I’m sorry, but you seam not to have a clue how to build a sustainable and growing digital business regardless of genre.</p><p><br></p><p>I don’t understand how you can even feel confident to evaluate this deal as you do when you seam to be lacking the basic digital business acumen to build one. </p><p><br></p><p>Everyone is free voice opinion though and we live in the right era to exercise opinions. But some caution would be nice.</p><p><br></p><p><a href="https://www.google.pt/amp/s/hbr.org/amp/2015/11/the-changing-economics-of-app-development&quot; target="_blank">https://www.google.pt/amp/s/hbr.org/amp/2015/11/the-changing-economics-of-app-development</a></p><p><br></p><p><br></p><p><br></p&gt;

      • Paul Thurrott

        Premium Member
        11 August, 2020 - 8:34 am

        Just repeating the same cheerleading over and over again doesn’t make your viewpoint correct. Apple is the richest company on earth and it charges fees that are literally 10 times higher than what credit cards—not the most respected business—charge for the same types of transactions. Please. Open your eyes.

  • tarnishedtinman

    10 August, 2020 - 3:22 pm

    <p>I am sure that nationalism played no part in this ruling. </p>

    • reefer

      10 August, 2020 - 3:27 pm

      <blockquote><em><a href="#560391">In reply to tarnishedtinman:</a></em></blockquote><p>As opposed to president dimwits intention of banning a chinese app and let an american company do a hostile takeover of it for a "cut"?</p>

      • Greg Green

        14 August, 2020 - 9:53 am

        <blockquote><em><a href="#560393">In reply to reefer:</a></em></blockquote><p>MSN: U.S. Senate votes [unanimously] to ban TikTok app on government devices</p><p>Politico: House votes to ban TikTok on federal devices [336-71]</p><p><br></p><p>Pres dimwit has a lot of Democrat support on this.</p>

    • illuminated

      10 August, 2020 - 3:48 pm

      <blockquote><em><a href="#560391">In reply to tarnishedtinman:</a></em></blockquote><p>Nationalism may have played a part but Apple is not really blameless here. Too bad nobody had guts to let them know that there are a lot of things that were not OK. </p><p>30% cut for every app purchase is not fair. </p><p>Changing rules for apps and ruining businesses are not OK either.</p><p><br></p>

  • IanYates82

    Premium Member
    10 August, 2020 - 5:22 pm

    <p>I'd forgotten about the parental control apps saga. An early example of app store rule shenanigans supposedly "for the customer" but really just paternalism, reduction of consumer choice, with a dash of revenue raising.</p>

    • Paul Thurrott

      Premium Member
      11 August, 2020 - 8:38 am

      It’s really just anti-competitive. Things that were fine earlier are suddenly huge problems because Apple wants that market to itself.

  • cavalier_eternal

    10 August, 2020 - 7:57 pm

    <p>I feel like the most interesting part is missing, from the ruling not the article. I want to know what the remedy is beyond just saying it needs to be fixed. </p>

  • SRLRacing

    10 August, 2020 - 8:37 pm

    <p>Tim Cook during next earnings: "Petty cash expenditures were slightly higher than expected but we settled with FAS and can continue operating as normal in Russia."</p>

  • retcable

    Premium Member
    11 August, 2020 - 7:18 am

    <p>Being in the internet service provider business, I very often used to go into a customer's home in response to a service call that they could not access the internet, and find a computer slowed to a crawl by a browser loaded up with 41 different toolbars, highly disreputable applications downloaded from the internet, so-called "antivirus" software that had actually installed non-removable keyloggers and adware and spyware, and all sorts of ads and things that would pop up randomly. Often these poor machines would take 10-15 minutes or sometimes longer to boot up after some minor setting change to hopefully fix their problem. I often would just have to leave and hopefully the system would reboot and the problem would go away, but I would always recommend rebuilding their system to get rid of all the junk. Most times I knew the problem would still be there and I had done them no good, but rebuilding someone's computer was a job for a computer shop, not the internet service provider. </p><p><br></p><p>I have heard plenty of tales of woe from Android-using friends about problems with their phones from some shady app they have installed and how they were unable to get rid of a problem by uninstalling or deleting the app because it had installed some root-level adware that could not be done away with unless the phone was entirely flashed anew. I actually had problems like those myself during a short experience with an Android phone. I later went back to the iPhone and have never had a problem since. Some control over what is allowed on a device is a good thing. </p><p><br></p><p>Such is the world when a user is able to source and install ANYTHING they want from anywhere they want with no vetting from anyone via an app store. Yes, it is fun to be able to install anything, but I have to say that I do not mind one bit having Apple look at and vette what can go onto my iPhone. I have never suffered any of the problems I listed above because of this, and I really do not feel that I have missed out on anything because of their oversight. Yes, Apple has a monopoly over what can be installed on THEIR phones, but if I don't like it I am perfectly free to switch to Android where there is NO vetting or oversight at all. There is choice here for mobile phones, so I wish people would just deal with it and leave that as it is. The alternative of having a free-for-all with adware, spyware, identity theft, etc will-nilly available on iPhones is something I don't want to deal with. </p>

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