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Is the App Store heading for legal trouble?

Fraser Speirs thinks yes, and I think he might be right.

Last year I posed a simple question:

“But what happens if Apple’s market share grows to the point where it has a monopoly – 70-, 80- or even 90% market share? That might take ten years, but it’s certainly not beyond the realms of possibility, and it’s certainly something that Apple would like to have.

At that point, does Apple’s control over third-party applications become an abuse of a monopoly – something that is, of course, illegal in both Europe and the US?”

Fraser’s essential point is that Apple doesn’t actually have to reach that kind of high market share figure to potentially fall foul of anti-competition law:

“The Essential Facilities doctrine rests on the control of a particular resource by a monopolist. Apple is not a monopolist in mobile phones, mobile phone operating systems. That’s not the issue.

Apple is, however, a perfect monopolist in “technologies necessary to sell an application to an iPhone owner”. How many iPhone App Stores are there? Exactly one. Who controls it absolutely? Apple.”

So is he right? What do you think?

(Photo by slowburn)

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  • http://www.jaml.co.uk _sjc_

    As much as I respect and admire Fraser as a developer and for the role he plays in the Mac dev community, I’ve never really agreed with his thoughts on political/economic topics. This is another one of these times.

    I’m not a lawyer (although I guess I am, technically at least, an economist), but I’d be very surprised if a court accepted that the App Store fell under the definition of “essential facility”. And even if it did, that would mean so would many other closed stores served by proprietary development system (eg. games consoles), at least some of which must have more draconian policies.

    Ultimately, however, we have to remember that the App Store is run by humans. It has problems which can be fixed. But this kind of belligerent “I’m not getting my way so I’m going to sue” attitude — even if it’s only in the form of (well-researched) on-line musings — isn’t going to help.

  • Kenny

    Regulation of monopolies, including measures to prevent anti-competitive behaviour exist to prevent monopolists abusing their position to the detriment of consumers. To that end, they apply to the behaviour of the monopolist with respect to its competitors NOT its suppliers.

    App developers are suppliers to the App Store and so would be hard pushed to claim that by denying them access, Apple is behaving anti-competitively. That would be rather like a food producer claiming Tesco was acting anti-competitvely by refusing to stock its produce.

  • Ian Betteridge

    “That would be rather like a food producer claiming Tesco was acting anti-competitvely by refusing to stock its produce.”

    Yes, it would: