Techdirt's think tank, the Copia Institute, is working with the Trust & Safety Professional Association and its sister organization, the Trust & Safety Foundation, to produce an ongoing series of case studies about content moderation decisions. These case studies are presented in a neutral fashion, not aiming to criticize or applaud any particular decision, but to highlight the many different challenges that content moderators face and the tradeoffs they result in. Find more case studies here on Techdirt and on the TSF website.

Content Moderation Case Study: Apple Blocks WordPress Updates In Dispute Over Non-Existent In-app Purchase (2020)

from the ok-landlord dept

Summary: Apple controls what apps get onto iPhone and iPads via its full control over the iOS App Store. Every app (and its updates) need to be reviewed by Apple staff before it?s allowed in the store — and Apple puts in place its own rules for what is and what is not allowed.

One of those rules is that Apple takes a 30% cut of any sales. That fee has become somewhat controversial, especially among service providers who don?t rely on the App Store for discovery, but whose customers likely come on their own — including Spotify and Epic Games. Spotify, in particular, has urged users to subscribe directly, to avoid having to pay the additional amount per month to cover Apple?s fees. In response, Apple forbade Spotify from even mentioning that it?s cheaper to subscribe outside of the App Store, which is now a central piece of an antitrust fight that is ongoing in the EU.

Perhaps because of all of this, Apple has had to make decisions about whether or not to allow apps in the App Store that seek to avoid paying Apple?s cut of the fees. In August of 2020, Matt Mullenweg, the CEO of Automattic, and the founder/lead developer of the WordPress content management system, announced that the iOS app for WordPress had been frozen by Apple. The given reason was that Apple believed that WordPress was trying to avoid the fees for in-app purchases.

This was the cause of much confusion, as many people noted that the app did not actually sell anything. While does offer paid hosting plans (and domain reselling), that was not a part of the WordPress app. However, as Mullenweg?s tweet showed, Apple was noting that because somewhere else in business, it sold things, that meant that WordPress had to pay it a 30% cut of those sales (even though they were outside of the app itself) in order to keep the app in the App Store.

Decisions to be made by Apple:

  • How thoroughly should the company be reviewing the business models of apps in the App Store to determine whether they can be included?
  • What actually constitutes an attempt to get around the App Store fee?
  • Will app developers take advantage of exceptions to the rules if Apple does not follow them closely?
  • Should the company allow alternative ways of getting apps on the phone outside of the App Store?

Questions and policy implications to consider:

  • When a company builds an entire device ecosystem, should it be able to set its own rules for what apps are allowed on the device?
  • Can content moderation decisions raise antitrust concerns?
  • Are there policy implications of a single entity reviewing what apps are allowed on a device?

Resolution: As this story got more attention, Apple apologized and restored the WordPress developer account. However, its statement on the matter implied that WordPress had ?removed? an option in the app to pay for hosting plans:

We believe the issue with the WordPress app has been resolved. Since the developer removed the display of their service payment options from the app, it is now a free stand-alone app and does not have to offer in-app purchases. We have informed the developer and apologize for any confusion that we have caused.

But users of the app say it never had any in-app purchases at all. The only thing it had were descriptions of Premium offerings, but no way to buy them. Mullenweg said that, before going public, he had asked Apple if removing those mentions would restore the account, and Apple had said it would not.

The reinstatement appeared to take Mullenweg by surprise.

In January of 2021, Apple also moved to lower the cut it took for in-app payments from ?small? developers (those making less than $1 million a year in annual sales) to 15%. It was also revealed that Apple quietly cut a special deal with Amazon to charge the retailer a 15% cut for Amazon?s Prime Video app.

Originally published on the Trust & Safety Foundation website.

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Companies: apple, automattic

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Comments on “Content Moderation Case Study: Apple Blocks WordPress Updates In Dispute Over Non-Existent In-app Purchase (2020)”

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Wade says:

Re: Re: It's about the consumer, not the store

The issue is not whether Apple can choose what to feature in its store. The issue is that (1) most people in America have only one cellular phone and (2) Apple demands that all Americans with an Apple phone must only get their applications through Apple store. That’s a full blown anti-competive monopoly. They say it takes time for the law to catch up with technology, and this is one of those cases. Something like half of Americans have an iPhone. When Apple says half of American consumers cannot do business with you unless Apple is sitting in the middle and dicating the terms, that is bad, financially and otherwise, for everyone who’s name doesn’t start with A and end with pple. There is no technical reason that everything must go through Apple’s store. Nor patents or copyrights. There is only marketplace dominance that says it has to be this way. I firmly believe that once courts start looking into this particular case, it will be crystal clear that Apple is abusing it’s marketplace position in ways that are illegal under anti-trust and competition laws. See for example United States v. Microsoft Corp (2001) – Microsoft making it difficult for customers to use something other than Internet Explorer was found to be an anti-trust violation, and that was just making it difficult to use a competitor. Apple does what it can to make it impossible to compete.

Wade says:

Re: Re: Re:2 Re:

No, Apple should be free to unilaterally determine what to offer in its store. The issue is the Apple store is the only way for a typical consumer to find and install third-party apps. This means Apple is doing more than choosing what’s in its store. It’s a gatekeeper that chooses whether a business may or may not exist in the marketplace. An analogy would be if Google decides whether your business can appear in search results, or if the phone book decides whether you can advertise your business, or if your ISP blocks you from viewing the website of a competing ISP in your area. While there are certainly cases where Apple has, rightfully, taken malicious applications out of the store, there are also many cases where Apple has taken down applications specifically for competing with Apple. WordPress telling customers they can purchase a hosting plan through the WordPress website was such an affront to Apple’s business model that Apple, without notice and without due process, paralyzed the ability for WordPress to conduct business with its own customers. I get the sense you don’t want the government to interfere with how private businesses operate. I fully agree. But isn’t Apple doing exactly that, interfering with how WordPress can operate? There is real harm happening to businesses and consumers when the threat of retaliation from Apple is ever present. The business I work for had its app taken down from the store because a spot check found the word "free" in a 2pt larger font size than the terms of conditions. All of which was visible on the same screen, no scrolling necessary to see all the details clearly and plainly. There are strict consequences for anyone that does not obey Apple’s law.

PaulT (profile) says:

Re: Re: Re:3 Re:

"No, Apple should be free to unilaterally determine what to offer in its store"

Then, why are you whining about them doing exactly that?

"The issue is the Apple store is the only way for a typical consumer to find and install third-party apps"

The information that you need to do this in order to use an Apple phone or tablet has been available for many years, since the App Store first released. If you find this objectionable, they have many competitors to choose from, most of which provide easier methods by which to by pass an bundled store option.

The real question, then, if you object so strongly to Apple’s openly advertised method of operation, why are you giving them money then whining that you got exactly what was advertised?

"An analogy would be if Google decides whether your business can appear in search results"

No, an analogy would be Wal Mart opting not to stock your product. Which they can do for any reason, ranging from them thinking it won’t sell to them having received complaints about similar products, to them just thinking the salesman is an asshole. This is not a problem in the physical world, you’re just whining because digital stores don’t have the inventory and logistics restrictions that a physical venue would have, so Apple have to give a direct reason that your product is not acceptable.

"There are strict consequences for anyone that does not obey Apple’s law."

Yes, which you agree to when you use their products and you can easily bypass by not buying their products or trying to sell to their user base. If you choose to use their property, their house rules apply, just like any physical venue.

Mike Masnick (profile) says:

Re: Re:

Apple has every legal right to do this. Doesn’t mean that it’s the right decision. I think there is plenty of evidence as to why this was a dumb move on Apple’s part and worthy of criticism.

I don’t think it’s an excuse to pass bad laws to block them from doing this.

Either way, the case studies here are neutral and show the various difficult questions and decisions that every company has to make.

Martin Smith says:

Constitutional rights are not as absolute as many believe. There are thousands of everyday examples where the 1st amendment does not protect you. Can you drive through a quiet neighborhood in the middle of the night honking your horn? No. 1A does not give you the right to honk your car horn. Your freedom to honk the horn is weighed against the rights of others to enjoy peace. You can be fined for this behavior, and that’s constitutionally OK.

A corporation may have the freedom to moderate content. This is not the same as having the right to commit an anti-trust violation. Anti-trust concerns arise when dominance in one market is used to unfairly compete in an adjacent market.

The freedom of Apple to moderate the App Store is weighed against the rights of others to compete on a level playing field.

A common point of confusion is the distinction between a right and a freedom. You have the right to life, but the freedom to honk your horn. You cannot overstep the right to life by living too much, but you can overstep your freedom of speech by honking the horn too much.

Notice how it’s always said that the United States has freedom of speech? Never right of speech?

A healthy economy requires competition. A nation cannot survive without a functioning economy. Somewhat metaphorically, the nation’s right to life gives the government a constitutionally legitimate authority to promote economic health, even when that’s at the expense of a corporation’s freedom of speech. This is the foundation of anti-trust law.

A corporation has no right to cause the total collapse of the United States economy in the pursuit of private profit. That might sound like hyperbole, but without regulations to protect the economy, that would be the inevitable demise of any capitalist society.

Regarding the App Store the least intrusive resolution would require Apple to enable the installation of apps that aren’t from the App Store. Someone would have to jailbreak their iPhone today in order to do this, which is an extreme measure and which demonstrates consumer harm. The consumer should be able to install apps directly from the app developer without having to use the App Store at all.

This outcome places a restriction on Apple’s freedom, but it doesn’t violate any of Apple’s rights. Speech is not a right. It is a freedom that is given permissibly up until the point it causes harm.

Other nations are investigating this matter. A corporation cannot use a 1A defense in the EU. Something similar perhaps, but not 1A. If a remedy is imposed upon Apple overseas, it will be easier for the US to later impose those same remedies upon Apple at home. The outcome of this matter may be determined by which nation brings the suit first.

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