In the meantime, we will be collaborating with our market peers in determining an appropriate legal and business response to this latest development.Eurozone based content rights holders such as Spotify, Vivendi and Amazon should take this to the Directorate General for Competition. iTunes music enjoys a dominant position in online music sales. ITMS operates on only ~15% net margins [1] the other ~15% attributed to marketing, R&D, bandwidth, support etc. App store or video margins should be even lower due to increased bandwidth, hosting costs, editorial review, etc. Clearly Apple's own content businesses would be unsustainable or would constitute dumping if forced to pay their public rate card for the payment platform.
Traditional remedies like content divestiture or substantial regulatory oversight could stifle innovation and raise consumer costs.
Instead:
- Allow end-users to specify an alternative root trust authority.
- Unbundle application signing from packaging, allowing N signers per binary
- Allow application side loading.
Effectively this would allow a competitor like Amazon to sidestep Apple requirements but only if they were willing to provide the entire infrastructure - payments, app store, bandwidth, support etc. Other root authorities could potentially be an open industry alliance, a privacy organizations like EFF, FOSS signers like FSF, code auditors like OBSD, security firms like Kaspersky or Secunia etc.
Apple as an apple signer would be able to continue to select and sign applications arbitrarily to maintain a high user experience, mandate platform changes, provide preferential payment terms to in house content businesses and avoid breaking out detailed incomes and revenues in public.
Competitors would gain a plan of last resort to split from the ecosystem if the only alternative is exiting the platform entirely.
Consumers would gain from competition driving down margins and overhead, alternative signing would discourage consumer unfriendly behavior by trust authorities.
Simple to enforce, easy to implement, solves competition concerns even in markets that haven't developed yet.
[1] http://seekingalpha.com/article/90735-how-much-will-the-app-...