Apple's Monopoly Is Finally Held Accountable - The American Prospect

[justaprogressive]

There’s been an enormous amount of discussion about what holds back markets in physical commodities like housing and energy, but also what prevents innovation and invention. One argument is that there are too many government-generated rules and regulations that slow everything down. Another is that the absence of government structuring leads to private regulations, imposed by dominant firms on their own terms to often exclude rivals and extract money. When those private regulations are forced into remission, markets can explode with new products and offers.

That’s happening right now in real time in the market for mobile phone apps, and particularly the distribution of those apps to customers. It represents the first real, thorough, and permanent consequences to a Big Tech company for monopolizing markets. And literally within 24 hours of a federal court’s Wednesday ruling imposing sanctions for this misconduct, competitors have been rushing into the space in ways that will make the market fairer, more affordable, and more abundant.

The case before the court concerned Apple’s monopoly power over its iOS App Store. Apple has built a tollbooth whereby apps that offer items for purchase must pay a 30 percent tax to Apple. (A few select apps have a smaller 15 percent tax.) Epic Games, the makers of Fortnite, wanted to offer game purchases off the app through a link at a cheaper price point, but Apple barred Fortnite from the App Store for such circumvention, and denied any developer the ability to steer people to off-app purchasing. This discouraged app developers, since they would not be able to load on iPhones and would therefore lose access to a huge number of potential customers. (Google has a similar 30 percent tax for its Android phones.)

Epic Games took Apple to U.S. district court in a private antitrust case. And it won a narrow injunction in May 2021, while losing on other claims. As a result, Apple would have to allow app developers to communicate with consumers and direct them to alternative “purchasing mechanisms.” But Big Tech firms like Apple see these impositions only as minor obstacles to work around by devising more private rules to maximize profits.

https://prospect.org/justice/2025-05-02-apples-monopoly-finally-held-accountable/