The heat turns up on app store pricing
Connected Consumers round up #19
Hope you all had a good summer time, I’m back a little later than planned with some tech and consumer stories that caught my eye:
App store charges news*: The judgement in the Epic Games, Inc. v Apple Inc trial in California is out. Epic Games who were booted out of the Apple appstore when they implemented their own (lower commission) payment system, so they took Apple to court for a series of anti-competitive and monopolistic practices. The judge concluded that Apple’s behaviour was not anti-competitive in terms of the app store distribution ecosystem, but was anti-competitive in terms of mobile game app distribution. Gaming apps make up around 70% of all app revenue and in 2020, generated Apple $47.6 billion if you include advertising revenue. The court found that its ‘anti-steering provisions’ which prohibit developers from steering gamers to their own payment systems broke the law and that the 30% rate was not “adequately justified”.
Meanwhile, in South Korea legislators have passed a law requiring large app store distribution platform owners (like Google and Apple) to allow app developers to run their own built-in payment systems. The UK, Australian, Russian and EU authorities are looking at issues around competition in mobile app ecosystems, and there are numerous litigations cases (including mine) being brought in the courts. Some initial commentators felt that other courts and competition authorities could decide to define the app store market, and hence the existence of anti-competitive behaviour differently so the debate on app store dominance and pricing is far from over.
Instagram as an unsafe product: an earlier Connected Consumers considered how conceptualising platform responsibilities through the lens of product safety could transform our understanding of consumer harm and give new ways to tackle problems. This came up again this week with news that Facebook had suppressed its own research findings that the use of Instagram by teenaged girls damaged their mental health. Some risky products are regulated as public health issues (like tobacco, alcohol and in some countries gambling), but there are also countless other products that take a product safety approach from fireworks to trampolines, requiring them to meet safety standards and be subject to assessment. If there is clear evidence that Instagram and similar social networks are essentially harmful to a segment of the population then should they too be treated as dangerous products?
How Shein is revolutionising e-commerce: when ads for Shein appeared a few years ago on social networks, I assumed it was just another low cost, fast-fashion brand. But Shein is joining the list of Chinese-established apps like TikTok that are not just popular but are shaking up the system. This piece details how it has changed ‘app-commerce’ on both the consumption and production side. It has set up relationships with suppliers who were using pretty basic, if any, software to manage supply chains, and plugged them into Shein’s own huge platform. This was efficient for suppliers, and enabled Shein to produce clothes on incredibly tight schedules. This then meant they could respond to changing demands of shoppers with vastly different tastes in different markets in as close to real time as we’ve seen – estimated at 3 days as opposed to 3 weeks for current fast-fashion sites. As the piece says:
“Shein doesn’t have a style. It doesn’t try to impose its taste on global consumers. It doesn’t even have its own taste. It’s a mirror that reflects each country’s current style back to it, in real-time, based on data alone. Remaining generic, storyless, and nationless allows it to project whichever image is needed in the moment.”
Could this constant, fast feedback on tastes and demands be the future of other types of e-commerce outside of fashion? For fashion the worry is it will fuel its already huge environmental impact, for other sectors like food it could improve efficiencies.
Behind the scenes at a dark store: did you ever wonder how those 15 minute delivery services like Weezy and Getir work and how they can get items out to consumers so quickly? This article takes a look behind the scenes at a so called ‘dark store’ – one of the faceless warehouse hubs that have grown especially in cities during lockdowns.
Connected glasses are back, will anyone wear them this time around? Facebook and Ray-Ban have teamed up to release new connected specs, called ‘Ray-Ban Stories’. They look just like regular shades, except that tiny cameras, speakers and microphones enable you can take pictures, record videos and take phone calls. Connected or ‘smart’ glasses like Google Glass and Snapchat Spectacles have a history of fizzling out, so it will be interesting to see if the Ray-Ban story can last more than a chapter or two. With the touch pad on the arm of the glasses, they certainly look more palatable as attire, but reviewers have noted that “the tech in the glasses is so hidden that it’s hard to tell there are cameras on them at all”. The visual appeal is closely linked to risk here: people will only want to wear them if the cameras and mics aren’t obvious, but if the cameras and mics aren’t obvious then the possibility of losing privacy and autonomy grows.
*With full disclosure that I am involved in a class actions against Google’s Play Store, seeking compensation for UK consumers who have overpaid for apps or in app purchases