Why Apple's loss in the Supreme Court matters

Apple has it pretty good on iOS: it exerts full control over the software experience, with users being forced to download apps from a single store—the App Store—where it takes a 30% cut of the money users give to developers. 

It's a marketplace, of sorts, where developers are free to list their apps and set the price they desire to ask customers for. But, what's unique about that market is that there's one company that defines the rules of playing in that space, the payment network developers are allowed to use, and the way they talk about their own products. 

There are no alternatives, workarounds, or other app stores—it's just Apple, developers, and all of the people who purchase iOS devices, in one captive audience.

These details are the center of a long-running case that the Supreme Court made an initial ruling on this week, in an attempt to answer the question: does Apple have an illegal monopoly by locking down the iOS App Store so heavily, and is that hurting consumers? 

This initial ruling says yes, consumers appear to be hurt on iOS because Apple is the exclusive supplier of apps, and developers are forced to pay a 30 percent commission. That means it's passed on to users in the form of higher prices, because there is nowhere else to buy or install apps.

The nuances of how Apple exerts that power appear to be the thing that it will get caught out: it doesn't allow developers to even talk about alternative ways to pay for apps, such as visiting a website, nor use alternative payment methods. 

This results in bizarre situations like the Amazon Kindle app, which is completely blank, with no mention of the fact that you must go to Amazon.com, buy a kindle book, then come back and read it. Amazon isn't allowed to add a button that directs users to the store, because that violates Apple's rules. And, Amazon isn't willing to pay Apple's 30% cut because it crushes the already-slim margins on e-books.

Apple's argument is a straightforward one: locking down the App Store is "not a monopoly by any metric" and it insists that it's for privacy and security reasons, not anything nefarious.

But, these same issues are what's central to Spotify's complaint to European regulators about the company. It faces a similar odd paradigm on iOS, where Spotify dropped App Store-backed subscription support over fees, but also finds itself unable to mention where to get one at all, because that's against the rules.

Where to from here, now that the initial ruling is in place? The Verge says that the case will head back to lower district court, where both sides will start the process of discovery, and look for evidence to argue the monopoly point—and Apple will then need to defend itself against a monopoly charge.

Until that point, Apple doesn't actually need to do anything. It hasn't yet been found to be an actual monopoly, and this case will go around in circles for years before we reach that point. Nonetheless, this is a step along the way to set that precedent—and potentially force Apple to open up its platform.

There's plenty of other ways this could play out, too: Apple may settle with the plaintiffs to get rid of the case, it could also make changes to the rules to allow third-party payment methods over the top of the App Store, thus circumventing the monopoly question in a roundabout way. The latter seems most likely to me, and similar to the way Google allows developers to avoid its cut on Android.

Regardless of how this all plays out, the ruling that allows things to proceed is an important one that will go beyond just iOS, allowing consumers to bring cases against any digital platform for the first time—and there's plenty of other potential monopolies that are probably worth probing.

Huawei blacklisted by the U.S.

The U.S. slid Huawei onto a trade blacklist overnight that potentially has massive ramifications for the company: it's now banned from buying any components from U.S. based companies without government approval.

That potentially means it can't buy processors from Intel, which it needs to build its laptops, and may have problems sourcing modems or mobile CPUs from Qualcomm, which is also American-based. It could also extend to purchasing software it needs, like the Android OS, from Google.

A similar ban on ZTE Corp started this way in 2016, leading up to a full-on sanction on the company, which almost put it out of business overnight—before the rules were walked back as it was on the brink of bankruptcy.

It's unclear whether the U.S. will quickly grant licenses to continue trading, or whether it'll drag its heels—and it effectively locks Huawei out of 5G in the U.S. market for the long haul. If it doesn't, this could hurt incredibly quickly.

In general, Huawei has stayed silent about this so far, but it suggested on Monday it would be willing to sign "no-spy" agreements with governments in order to secure deals in Europe and the UK.

Tab Dump

White House refuses to sign Christchurch call, a plan to stamp out online extremism [Washington Post]
Absolutely no surprises here, but with 18 other governments and the five top U.S. based tech companies onboard, it sure looks pretty tone deaf. But, signing wouldn't fit with the far-right narrative that they're being censored online—because many republican figures are facing deplatforming, something the White House is not happy about

Google's security keys for increased security....have a security flaw in them [Techcrunch]

Apple's custom 5G modems are reportedly as far away as 2025, after messy Intel divorce [9to5Mac]

A fix for robocalls? A new rule would allow blocking calls by default, unless they're in your contact list [The Verge]

Twitter has Yet Another Plan to fix itself [BuzzFeed]