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Apple App Store Archives ✔️ News For Finance
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A shadowy hand holds a smartphone displaying the Parler logo.

Parler is about to be re-platformed.

The app for the “free speech” social media company will be available once again on Apple’s App Store. Apple reinstated Parler on April 14, according to a letter from Apple to Sen. Mike Lee (R-Utah) and Rep. Ken Buck (R-Colo.), which was made public today. Once Parler releases an updated app, iOS users will be able to download it once more.

In the letter to Lee and Buck, Apple said that its App Store review team had spoken with Parler at length about how to bring the app into compliance with company guidelines. “As a result of those conversations, Parler has proposed updates to its app and the app’s content moderation practices,” wrote Timothy Powderly, Apple’s senior director of government affairs.

Parler was kicked off both Apple’s and Google’s app stores in the wake of the January 6 insurrection at the US Capitol, which left five people dead and hundreds more injured. Shortly thereafter, Amazon terminated hosting services for Parler. At the time, all three Big Tech firms said the social media company had not done enough to moderate posts that incited violence. Apple, in its letter, said it still stands by its decision to ban the app in January, and it made sure to point out that it reached that decision independently of Google and Amazon.

Google is reportedly open to allowing Parler back into the Google Play Store. In a statement made to Android Police following Apple’s reinstatement of the Parler app, the company said, “Parler is welcome back in the Play store once it submits an app that complies with our policies.”

Parler initially launched in August 2018, and its founders claimed it would be a “non-biased, free speech social media,” a pitch that pushed the false narrative that conservative voices were being censored on other social media platforms. It was founded by John Matze, Jared Thomson, and Republican political donor Rebekah Mercer. While the latter two remain, Matze was fired on January 30 in a brouhaha over implementing content moderation in an attempt to get Parler back into Apple’s and Google’s app stores.

Moderation on Parler reportedly was spotty at best. Parler reportedly alerted the FBI to threats made on the platform, but it apparently did little to remove them before the insurrection. The site’s rules forbid users from posting threats and criminal activity, but there was evidence of both. Unlike other social media platforms, there was limited automated moderation. Instead, the site relied more heavily on part-time paid “jurors” drawn from a pool of Parler users. Superficially, Parler takes a Twitter-style approach to social media. Posts are limited to 1,000 characters, and users can upload images to share with others.

In the wake of the riot, a hacker scraped and released nearly every post made on Parler, an archive of around 80 terabytes of data. The hack was relatively straightforward—Parler’s public API did not require any authentication, and posts were incremented numerically, allowing nearly anyone who knew of it to easily access reams of posts, images, and videos. The site didn’t scrub location data from images or videos, either, as other social media platforms often do, allowing anyone to quickly determine where the media was recorded.

Those images, videos, and location data have factored into investigations in the Capitol insurrection. Users left a digital trail of their activities inside the Capitol building, allowing law enforcement to identify and charge. One Parler user, Eduard Florea, was investigated for posting threats about Sen. Raphael Warnock (D-Ga.) and ultimately charged with illegal possession of ammunition.

<em>Fortnite</em> seen in the App Store on an iPhone on May 10, 2018.
Enlarge / Fortnite seen in the App Store on an iPhone on May 10, 2018.

With Epic Games and Apple set to face off before a judge in their high-profile trial in just a few weeks, new court filings from both companies outline the evidence and arguments each intends to make in detail.

Unsurprisingly, each document paints a radically different picture of Apple’s App Store and its role in the gaming and technology industry.

The disagreement between the two companies escalated publicly when Epic attempted to implement its own in-app payments system in Fortnite, one of the most popular games on Apple’s App Store. This set into motion a series of events that led to Apple removing Fortnite from the App Store as Epic ran a social media campaign around the hashtag “#SaveFortnite,” leveraging angry gamers against the tech giant.

Epic then went to court against Apple, alleging that the latter’s iOS App Store is a monopoly and its policy that app developers publishing to iOS must use Apple’s own payment system (among other restrictions in Apple’s review process) is anticompetitive.

Both Apple and Epic were required to file “Findings of Fact and Conclusions of Law” in the lead-up to the trial. The documents are lengthy and detailed, but find some key arguments summarized below.

Apple’s argument

The top-level gist of Apple’s argument (key aspects of which we already covered in some detail previously) is that developers have the option to develop and publish games for numerous other competing devices and platforms, including storefronts from companies like Sony or Nintendo that enforce similar rules and fees. Developers can also publish for the web, where experiences would still be available to iPhone users even if developers choose not to abide by the rules of the App Store and publish there.

Because Apple is just one of many players in a broader competitive market for video game transactions, and it does not control that entire market, it does not have a monopoly, the company argues. Here’s a snippet from Apple’s filing:

Apple has no monopoly or market power in the relevant product market for game app transactions. And there is no claim that it had any such power when the restrictions at issue were imposed around the launch of the App Store.

Further:

Apple has no obligation to license its intellectual property, and aside from a limited exception not applicable here, businesses are free to choose the parties with whom they will deal, as well as the prices, terms and conditions of that dealing.

Apple says its 30 percent commission charged to developers who earn over $1 million per year on its app marketplace is an industry-standard rate that does not represent an anticompetitive strategy.

The filing contends that a cut like that is reasonable because Apple has spent billions building out and maintaining infrastructure that makes developers’ success on the platform possible, from the App Store itself to various APIs and other software development tools. Apple discloses that Epic earned $700 million on the iOS platform in just two years of Fortnite being available on iPhones and iPads.

Also key to Apple’s argument is the assertion that the particular Epic update to Fortnite which led to the game’s removal from the App Store was planned months or even years in advance with the specific intent to wage a broad public relations battle to make Apple look bad. If the judge agrees with that interpretation of Epic’s actions, that may weaken Epic’s case that Apple unfairly removed Fortnite from the App Store after Epic submitted the game for approval in good faith.

Epic’s argument

The major distinction at play in Epic’s own argument is that iOS is an entire market unto itself and not just one of many competing products in a larger marketplace of video game transactions. If the judge agrees with this classification, Apple may be more likely to be seen as monopolistic.

Another key part of Epic’s argument involves comparing and contrasting iOS with macOS. Apple claims that its strict rules about what apps can and can’t do on the iOS App Store are driven at least in part by concerns about security and privacy for users, but Epic points out that Apple claims macOS is secure and private without placing all the same restrictions on the Mac operating system.

This is key to Epic’s case that Apple has enforced its rules for the iOS App Store for business reasons, rather than user-centric ones like security or privacy, which could undermine part of Apple’s case.

Epic asserts that Apple’s controversial App Review process “does little to keep iOS devices secure,” and alleges that Apple has on multiple occasions screened apps “primarily for non-security issues—including specifically for anti competitive purposes.”

It singles out Apple’s policy that apps must use Apple’s own payment system (and thus provide Apple a 15 percent of 30 percent cut of the revenue) as one that has no security benefits. The filing says:

There were no widespread or significant security issues regarding payment with the App Store prior to the introductions of IAP or the requirement that apps selling subscriptions use IAP rather than alternate payment solutions, nor evidence that IAP is far superior to third-party payment alternatives with respect to security.

As a side note we thought worthy of mentioning, Epic says in its filing that its own currently PC-based game marketplace will become profitable in 2023. The company spent considerably on marketing, user acquisition, and exclusives to grow its install base in the early years, leading to expected losses in the first few years of operation.

The Rorschach test

The decision of the judge could have far-reaching consequences for not just Apple and Epic, but many other companies that trade in digital software, from platforms to individual developers.

Both Apple and Epic themselves have immense stakes in the outcome of this case. If the judge fully embraces Epic’s arguments, Apple will face an existential threat to a core part of its product development philosophy and business strategy going back many years, and the consequences of a ruling fully in Epic’s favor would be wide-reaching for the future of Apple.

Epic doesn’t have quite as much to lose in terms of its status quo position, arguably, but it has a tremendous amount to gain should it come out ahead. If it defeats Apple on this battlefield, the flood gates may open for Epic to launch its own store on iOS—and perhaps, after the precedent is set, on other gaming platforms like those owned by Nintendo, Sony, or Microsoft.

The two arguments characterize the nature of Apple’s App Store completely differently, and it’s clear that the App Store has become something of a Rorschach test for onlookers.

There are many dimensions to the case that may end up being critical to the judge’s conclusions, like the question of whether Apple’s app review process actually provides security or privacy benefits to users, whether Epic pushed the app review policy-offending Fortnite update in faith, and more.

Wait until May

But it may come down primarily to this question: does Apple’s App Store—despite a minority install base in the mobile space (Google’s competing Android platform has more than 70 percent market share) and the presence of numerous strong competitors in the video game industry—constitute its own marketplace over which the company can hold a monopoly?

Or is the App Store just one one of many digital marketplaces in a vast and healthy competitive games industry, on a minority-market-position platform—with the implication that Apple is not truly limiting developers’ access to the marketplace in an anticompetitive way, because Apple does not have that kind of power over the larger marketplace?

We’ll see the arguments move forward when the trial begins on May 3 in Oakland, California, provided there are no delays.