So, why do you think Apple is doing this? Presumably their lawyers aren't stupid and Apple does not want to be fined 10% of their worldwide annual turnover.
I believe giving into China was a mistake for Apple executives ethically, commercially and politically.
In the long term they’ll be forced to give up all the commercial surpluses to local mega apps by the government, and the political/ethical problems require no elaboration.
Yep, the app store is also very profitable for them so they can afford to have this go to the courts. They want the minimum amount of regulation possible, so they first lobby the regulators to apply as little regulation as possible and that the regulation that is applied is as vague as possible.
Then when it comes time for implementation, they make an implementation that isn't exactly 100% in accordance with the regulation and wait to be taken to court. Then they get to argue with a judge related to what is and isn't in accordance with the regulation. If they get lucky, the judge will rule partly to them, which gives them less strict regulation.
The EU lawmakers can then re-vamp the law to make it stricter, and the process continues again.
For the same reason Trump has opened so many legal challenges in his trials. It's a stalling tactic. Every year Apple can continue their App Store business monopoly without adequate competition is another year Apple earns $100B (or whatever their profit is - Apple does not disclose the figures [1]). They are trying to delay any threat to that as long as possible. No doubt they have done their cost/benefit calculations very carefully, weighing the potential fines and legal fees against the revenue they will be able to keep earning this way, and they have decided this is the best way forward.
If you can find specific numbers on Apple's profit from the App Store, I would be very interested to see them. Of course Apple's total profit is public information, but they don't break it down so specifically. The best I can find is that App Store revenue is on the order of $100B, but the profit margin has not been disclosed (though speculated by Epic to be ~80% [1]).
• Apple makes 100% of its profit from the App Store.
• This profit comes equally from the US, EU, China, and the entire rest of the world. (It doesn't, the EU is a smaller market.)
• Half of EU users would stop using the App Store entirely if they were allowed to side-load.
• Apple's keeps 75% of its revenue as profit.
By my calculations, this would mean Apple's EU App Store monopoly is worth 9.375% of the company's worldwide revenue. Please let me know if I made an error in my math.
Why is Apple willing to risk 10% of its worldwide revenue to protect 9.375% of its worldwide revenue?
Okay, I guess maybe Apple thinks it's unlikely to be fined the maximum amount, and is willing to roll the dice. But I also chose ludicrously favorable numbers here.
The EU is "leading in regulation", which means often, regulation (especially in the area of customer protection) is first introduced in Europe, then other jurisdiction follow that are at least "inspired" (think: lazy copy and paste of at least parts) by it.
This can be a positive effect for the world overall, but it is also annoying that some EU politicians describe that as (and confuse it with) "innovation".
As a European citizen, I approve of things like killing of cellphone roaming fees and forcing adapter uniformity (I wish they also enforced power plug uniformity across the EU's 27 member states).
Considering that the Google bribe to Apple for search is $18B, I can't see the App Store profit margin being 80%. That would imply that Apple makes zero margin on all hardware and other services.
Their profit? Yes. They are required to account for that by law.
But they don't break that down by revenue stream in a way that would be useful. This is by design: Apple doesn't want people sniffing around and wondering what things would be like in a world where Apple had to sell their technology piecemeal. It'd be like demanding to know how much profit Apple made from selling macOS vs. Macintosh computers. Everything's one giant bundle, why calculate things separately? Are you trying to force us to unbundle shit?
You can be assured that Apple internally knows the margins on everything they make as well as Services. I think that there's several reasons they don't disclose discrete sales figures and profit margins. This would give competitors a good idea of where to attack Apple.
They and Google have a duopoly on smartphone operating systems. Both use anti-competitive tactics to maintain the duopoly.
Anti-trust law probably needs to be updated to take platforms into account. In the past (pre-software), the first sale doctrine provided a decent check valve on this sort of crap.
It was the idea that, if you sold a thing to a person, then you no longer owned it. I think the "first-" part of the name is there because anti-resale provisions were commonly tacked onto an agreement between the manufacturer and initial purchaser.
For instance, a tractor manufacturer would put a trademarked logo on a copyrighted picture on the side of a patented gear box, and then, as part of the condition of the sale to the farmer, they'd say the trademark, copyright and patent licenses were non-transferrable.
The courts correctly ruled that this was bullshit, and banned it. We need to go back to something like that. Then (since the DMCA would be ruled unenforceable, and things like the CFAA would apply to device manufacturers), you'd be able to modify your phone, and the manufacturer would not be allowed to retaliate.
At that point, Google and Apple's duopoly would give them a lot less market power. For one thing, once Google "sold" android to phone manufacturers, they couldn't use contracts to prevent the manufacturers from making a mozilla phone, etc, like they do today. Similarly, iPhone parts couldn't contain mechanisms preventing their use in other devices, because hardware DRM would not only be unprotected by the DMCA, but flat-out illegal.
