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Is Apple a Bad Antitrust Apple?

In the backdrop of the U.S. Department of Justice (DOJ) investigating Apple, the European Union announced last week that it is pursuing two antitrust probes against the tech giant. EU authorities are investigating whether Apple violated European competition laws through its App Store or Apple Pay. Those cases will likely require some fancy footwork from European antitrust enforcers, but winning a case against Apple stateside would be an even bigger lift. The U.S. antitrust standard differs from Europe’s in its requirement of proving consumer harm.

Details of the case U.S. antitrust lawyers are trying to build against Apple are scant. News reports indicate DOJ investigators may be focused on Apple’s App store.  App developers have long complained about Apple’s 30 percent cut of digital sales, including in-app purchases (15 percent on longer subscriptions). But that would be hard to attribute to abuse of market power when the App Store’s nearest competitor, Google Play, takes the same percentages. Besides, there’s no straight line to consumer harm in taking a percentage of a product for distribution.

Reuters reported that an app developer who was interviewed in November of last year by the DOJ recounted his frustrating experience trying to stay in technical compliance with App Store to the agency. Perhaps the DOJ is considering taking issue with App Store’s treatment of developers. Again, this has questionable merit under the consumer harm standard because it’s precisely Apple’s stringent standards for “privacy, security and content” that have attracted enough consumers to make Apple the king of monetization, even with Android enjoying greater smartphone market share. Those rigid standards may frustrate app developers, but they’re the competitive advantage that’s made them, “more than $155 billion worldwide since 2008, with a quarter of those earnings paid in 2019.”

It seems the firm’s unrelenting high standard is challenging, but lucrative for developers, positively differentiating for Apple, and very popular among consumers. It probably is bad news for DOJ antitrust lawyers, though.