I wanted to call attention to Farhad Manjoo’s New York Times column, complaining about what he calls the “Apple tax”:
Last week, though, Cook might have felt a bit like a spinning pinwheel under the polite yet relentless interrogation of a Federal District Court judge charged with deciding whether Apple is a ruthless monopolist. In the process, the judge, Yvonne Gonzalez Rogers in Oakland, Calif., highlighted a scourge affecting just about every Apple customer and the software developers who want to build apps for them.
Call this scourge what it plainly is, the Apple tax — the billions of dollars a year that Apple collects from large swaths of the technology industry for the privilege of offering paid apps and in-app purchases to iPhone and iPad users. Once, in the early days of the iPhone, Apple’s 30 percent fee on app purchases, and its restrictive rules, could be defended on the grounds of its great innovation in the mobile market. Apple, after all, was the first to market the modern touch-screen smartphone and the simple, one-tap way of adding apps to it, and it seemed reasonable for the company to collect tremendous winnings from its creation.
But for how many years should Apple get to milk billions of dollars of almost pure profit from an invention first released back when George W. Bush was president? What justification is there any longer for Apple’s severe restrictions on how users and software makers can do business with each other, other than that it has the market power to impose them? Isn’t it time we were all given a break from the Apple tax?
It’s called “abuse of monopoly power” and it illustrates neatly a point I have been making for some time: Apple should be broken up using the power of the Sherman Antitrust Act. And it’s not the only one.
This also ties in with my post on innovation yesterday. Very, very few mobile apps actually end up making a net profit. Increasing the price of apps which is the net effect of the “Apple tax” actually reduces the number of apps earning profits and stifles innovation.
