This week: Developers notch a partial victory against Apple, and the U.S. may side with Big Tech over a proposed law in South Korea. Plus: Elizabeth Holmes heads to trial.
The App Store is about to change because of a new legal settlement.
The settlement dates back to a 2019 lawsuit: App developers sued because they believed Apple held too much power in deciding how they could charge for payments and in taking commission. The settlement changes Apple policy by allowing developers to communicate directly with customers regarding payments outside of the App Store, according to CNN.
Apple also agreed to fork over $100 million: The companies in the lawsuit will receive anywhere from $250 to $30,000 each.
But this still isn’t much of a win for app developers
As the WSJ points out, they still cannot advertise their alternative payment methods within the app (they’ll have to rely on data collection to get users’ email addresses and communicate the payment methods that way). Plus Apple will still take a hefty cut -- up to 30% -- on all in-app purchases.
Bigger changes may come from the Epic trial because Epic wants its own payment system inside the app. It remains to be seen if this settlement has any impact on the pending decision in the Epic case.
One of the most anticipated trials in tech history started Tuesday with jury selection for the case against Theranos founder Elizabeth Holmes. Here’s an update on what the trial is about and what’s likely ahead.
Holmes, who has pleaded not guilty, faces 12 charges for allegedly defrauding investors and patients about revolutionary blood-testing technology that basically didn’t work at all. If convicted, the punishment could be as much as 20 years in prison.
Holmes’s defense is likely to center on blaming Sunny Balwani, a former business partner and romantic partner who also faces fraud charges. Documents from her lawyers suggest they will accuse Balwani of inflicting emotional abuse on Holmes that led her to believe his representations of the company were true. This defense would suggest Holmes was more of the company’s public face who shared messages based on what she heard from insiders like Balwani.
Holmes will likely testify at some point, based on the recent filings regarding Balwani. Other potential witnesses include Rupert Murdoch, a Theranos investor, and Henry Kissinger, who was on the board.
Just like Epic and many small developers, South Korea has a problem with Apple’s App Store and Google Play. And the results of its legal fight in Asia could indicate how friendly the Biden administration will be to Big Tech during the next few years.
South Korea has proposed a law that allows for alternative payment systems outside app stores: As you know from reading the story above, plenty of developers in America want to do the same thing. The U.S. government has also been skeptical of the power of Google and Apple.
The difference is that this proposal is coming from the South Korean government: Apple believes South Korea is targeting American companies, and the U.S. has traditionally worked to counter foreign laws it believes hurt domestic companies. Apple has asked the Biden administration for help.
Given the US antitrust fervor, this is an odd request: As the NYT put it, “Will (the Biden administration) defend tech companies facing antitrust scrutiny abroad while it applies that same scrutiny to the companies at home?”
Siding with Apple and Google could come at a price
Antitrust cases -- which are already going to be challenging for the government -- don’t come across with as much power if the Biden administration says it’s wrong for another country to take a similar regulation strategy.
Wendy Cutler, vice president at the Asia Society Policy Institute told the NYT, “You don’t want to be calling out a country for potentially violating an obligation when at the same time your own government is questioning the practice.”
Many other countries could propose similar legislation, putting the United States into an even bigger bind.
💌 What else we're forwarding
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🎧 Music we’re working to
Today we’re listening to Bambounou, a producer and DJ from Paris. He creates dance tracks that incorporate sounds and rhythms from a wide range of club music from Chicago house to UK underground. Check out his first LP Orbiting which travels through the entire world of the genre - not to be missed.
See ya next week!