iPhone app purchasers may sue Apple Inc over allegations that the company monopolized the market for iPhone apps by not allowing users to purchase them outside the App Store, leading to higher prices, a U.S. appeals court ruled on Thursday.
Apple bloggers obviously kneejerk straight into defence mode in response to this news, but if you actually dive into the decision, the court makes a very compelling argument as to why this case ought to be allowed to continue, that preempts all the usual terrible analogies they tend to come up with and/or parrot from the party line:
Apple argues that it does not sell apps but rather sells “software distribution services to developers.” In Apple’s view, because it sells distribution services to app developers, it cannot simultaneously be a distributor of apps to apppurchasers. Apple analogizes its role to the role of an owner of a shopping mall that “leases physical space to various stores.” Apple’s analogy is unconvincing. In the case before us, third-party developers of iPhone apps do not have their own “stores.” Indeed, part of the anti-competitive behavior alleged by Plaintiffs is that, far from allowing iPhone app developers to sell through their own “stores,” Apple specifically forbids them to do so, instead requiring them to sell iPhone apps only through Apple’s App Store.
Instead, we rest our analysis, as compelled by Hanover Shoe, Illinois Brick, UtiliCorp, and Delaware Valley, on the fundamental distinction between a manufacturer or producer, on the one hand, and a distributor, on the other. Apple is a distributor of the iPhone apps, selling them directly to purchasers through its App Store. Because Apple is a distributor, Plaintiffs have standing under Illinois Brick to sue Apple for allegedly monopolizing and attempting to monopolize the sale of iPhone apps.
Over on Twitter, John Gruber asked me “iPhones are their own market? Does BMW have a monopoly on BMWs?” This clearly demonstrates a lack of understanding of how the car market actually works (and, quite clearly, indicates Gruber didn’t even read the actual decision quoted above). In fact, exactly because car manufacturers have a de facto monopoly on their own products, they are legally obliged to open up their specifications to allow other companies to manufacture competing, off-brand parts and to allow third parties to service and maintain the cars according to the manufacturer’s own specifications.
As I’ve argued before, there’s absolutely no reason why the technology world should be treated any differently. Computers have become integral parts of our society, much like cars, and as consumers we should not be forced into relying on just one company for servicing, maintaining, and using them. It’s high time we stop treating technology companies like special little flower children, and force them to grow up and become real companies with real responsibilities.