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Apple: We Control iPhone App Approval, Not AT&T

Apple released its answers to the Federal Communications Commission's questions regarding the company's move to block Google Voice-compatible applications from the iPhone and iPod touch App Store late Friday afternoon. In its responses, Apple confirmed that AT&T is not involved in the application process, and also stated that it in fact has not blocked Google's own Google Voice application, but instead is still involved in the review process.

The FCC has launched an inquiry into why Apple apparently rejected Google Voice for the iPhone platform at the beginning of August, sending letters to Apple, Google, and AT&T asking why Google's own Google Voice app was rejected, and why third party Google Voice apps were pulled from the App Store.

"Contrary to published reports, Apple has not rejected the Google Voice application, and continues to study it," Apple said in its response to the FCC. "The application has not been approved because, as submitted for review, it appears to alter the iPhone's distinctive user experience by replacing the iPhone's core mobile telephone functionality and Apple user interface with its own user interface for telephone calls, text messaging and voicemail."

In other words, the Google Voice application essentially converts the iPhone into a Google Voice phone, bypassing Apple's built-in phone, SMS and voice mail environments.

Apple added "In addition, the iPhone user's entire Contacts database is transferred to Google's servers, and we have yet to obtain any assurances from Google that this data will only be used in appropriate ways. These factors present several new issues and questions to us that we are still pondering at this time."

The company also revealed that it has at least 40 reviewers that screen each application, and that the apps are inspected by at least two different reviewers to help insure that screening guidelines are enforced uniformly.

According to Apple's response, the company's agreement with AT&T prohibits approval of applications that start or receive VoIP calls over the cell carrier's data network -- accounting for why applications such as Skype for the iPhone are limited to Wi-Fi connections.

The government's questions were clearly looking for information to determine whether or not Apple's iPhone application approval process crossed into the realm of anti-competitive behavior.

Apple's answers seem to indicate that the company is steering away from the anti-competitive side of the line, but according to an attorney The Mac Observer spoke with that's familiar with this are of the law commented that Apple could still have some problems.

"One of those is rejecting an app that alters the iPhone's user experience and/or the character of the iPhone's functions but that also competes with the services offered by Apple or AT&T. This is a fine and indefinite line," he said. "Stay on the right side of that line, and you are simply protecting the quality and character of the product that you've put in the stream of commerce, but cross the line, and you've impermissibly restrained competition."

Since Google can develop Google Voice applications for its own Android smartphone platform, along with other phone operating systems, Apple isn't necessarily blocking competition. Since Apple confirmed that AT&T isn't involved in the iPhone application approval process, it appears that the companies aren't colluding to block competition, either.

"The bottom line is that the antirust law of the United States does not require Apple to permit a competitor to load software on the iPhone that transforms it in full or in substantial part into an Android phone or a Skype phone or any other third-party phone, as long as there are other viable avenues for competitors to compete," the attorney said.

Apple, no doubt, is hoping the FCC agrees.

17 comments from the community.

You can post your own below.

drlonghair said:

Does anyone find this degree of intrusion into the legitimate business decisions of a company to be unsettling?  I recognize that the FCC has jurisdiction over the airwaves, but that shouldn’t give them a carte blanche authorization to conduct investigations over which applications one company decides to place on its cellphones.

   Quote

Ted Landau said:

Three quick comments:

1. RE: “The Google Voice application has not been approved because, as submitted for review, it appears to alter the iPhone’s distinctive user experience…”

Even if this is the case…at some point can’t it be up to the user to decide whether something “degrades the experience”? If I want to alter my phone’s experience, and am happy to do so, why should Apple care? Apple tries to make it sound as if it is primarily looking out for my/users’ interests here. I suspect the truth is they are, not surprisingly, looking out primarily for their own interests, and they see Google Voice as a competitive threat.

2. RE: “If we find that an application has a problem, we send the developer a note describing the reason why the application will not be approved as submitted…”

Based on what I have read online as well as my own conversations with developers, this is at least partly a spinning of the facts. Many developers have complained about the almost complete lack of useful feedback when their app is rejected.

3. RE: “There are more than 40 full-time trained reviewers, and at least two different reviewers study each application so that the review process is applied uniformly…” and “We receive about 8,500 new applications and updates every week, and roughly 20% of them are not approved as originally submitted. In little more than a year, we have reviewed more than 200,000 applications and updates.”

This suggests even less time per app review than I had previously speculated. I hadn’t considered how many apps are submitted but never approved (65,000 approved vs. 200,000 submitted). As similarly pointed out by Adam Engst (http://db.tidbits.com/article/10497), this can work out to as little as 5 minutes per app. This hardly seems adequate.

Aside from these points, I found Apple’s response to be a reasonable one overall.

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rpaege said:

I just can’t help but wonder what took Apple SO LONG to come up with this explanation?  It makes me think that the answer is less than true, or that they are incompetent in their decision making and marketing processes.

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iphonzie said:

Nice summary. I read through Apple’s reply and found it somewhat addresses the call for transparency in App rejections. It provides more detail than I would generally expect from Apple, though still less than developers and the media would like.

I’m interested in how “the antirust law of the United States” applies here - I didn’t know the US had a law against the oxidation of iron, nor that rust had a major impact on anti-competitive practices.

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Nemo said:

This is a tough one.  While there is clearly some merit to the idea that customers can choose their experience, Apple clearly has the right to determine the user experience that their products, the products that carry its trademarks, offer in the marketplace.  At least this will be true when Apple’s licenses and criteria for selecting apps for the App Store rest on the rights granted to Apple pursuant to the Trademark, Copyright, and Patent Acts.  Copyright would protect against copying or modifying Apple’s software; patent, including software patents, would prevent other from making a device that infringes on Apple’s patent rights, and trademark, in particular, would allow Apple to prohibit the alteration of its devices in ways that alter its devices so that they no longer represent what Apple presents to its customers and is willing to stand for and stand behind.

Therefore, for any application that infringes on Apple’s rights pursuant to copyright and/or patent or that engages in such wholesale alteration any of Apple’s devices, which in this case the iPhone, such that it has a different character than what Apple put in the marketplace, Apple has, I think, a good argument for refusing to allow that application on the iPhone and/or the App Store. 

Those seeking a fundamentally different experience than what Apple’s trademark represents should perhaps consider a different phone.

   Quote

Bosco (Brad Hutchings) said:

Apple is on a slippery slope putting itself between developers and customers. On balance, the App Store just adds confusion. The potential market for apps is too large to fit in one spot. Vertical apps are drowned out by fart generators. Not that the fart generators are a bad thing, but they necessary drown out quality vertical apps when they’re all found in one storefront.

Instead of entering the TV market (as suggested by Gene Munster), Apple ought to be thinking long term about the wireless bandwidth market. For now, to get its devices on existing carrier networks, it ought to set up an authentication scheme for apps required to use the data network. OAuth (used by Twitter) would be a good candidate. All traffic on the cell network would be signed by a pre-authorized application and end-user. Rogue applications or users can be disabled by flagging their keys.

But so long as Apple does this approval process, it deserves every ounce of grief it gets from every corner it comes from.

   Quote

Nemo said:

Apple always puts itself between its customers and developers but in ways that both developers and customers have apparently found to be of great benefit.  Apple always designs custom, integrated solutions for all of its devices and services.  Apple’s customers have loved that and do continue to love that.  They love it for the elegance, simplicity, reliability, and intuitive operation of Apple’s products.  As for developers, they get platforms with excellent development tools and a coherent and limited set of platforms that have uniform specs and quality, which dramatically lowers the costs, while increasing the speed, of development.  For those customer that want not to have Apple in the middle, there is Windows or Linux.  But for Apple’s customers, they love Apple being in the middle, as the sales numbers show, and those numbers show that those who prefer Apple being in the middle is rapidly growing, because Apple being in the middle benefits them with superior products and services.  This is true for a growing number of customers and developers.  For the others, they aren’t in Apple’s target markets, so we can only wish them well in their adventures with Linux and Windows.

The point is well taken that, because of the proliferation of apps on the App Store, Apple needs to do something to separate the wheat from the chaff at the App Store.  But of problems, that, as I am sure every other OEM of smartphones would agree, is a good problem to have.  However, it is a problem.  It is a problem that can be solved, and I am sure Apple is addressing it.

Apple going into the network business is a non-starter.  First, entry into that business is vastly expensive, so expensive in fact that even Apple couldn’t take it on without taking on an amount of debt that would destroy Apple if the venture failed. 

Second, the network business is fundamentally inconsistent with Apple’s business as a marker of network devices.  Those, who own networks, do everything that they can to maximize the return on their ten of billions in investment, which means that they do whatever they can get away with to hobble devices so that their customers have to depend on the network to communicate and for services.  Device makers, like Apple, on the other hand, strive to incorporate features in their products that give greater choices and lower prices for network services, because this is what their customers want and love in their smartphones and other devices.  (Remember that Verizon rejected the iPhone for, among other reasons, Apple’s insistence on including WiFi, which, at that time, Verizon did permit in any of the phones on its network.)  So you would have one major part of the company, the network side, constantly trying to restrain develop on the device side, Macs, iPods, and iPhones, that threatened its revenue stream.  Such a conflict would lead to either to mediocre devices or the risk of unsustainable loss of profits on your vastly expensive network or both.  That kind of conflict, mainframes v. PCs, nearly destroyed IBM, and it would not fail to seriously damage Apple.

Third, Apple on its current business has higher margins than the cell carrier, so there is no reason why Apple would wish to enter the network business at the expense of its current businesses.

The signing app idea seems attractive, but it can be defeated, and isn’t the reason why Apple has difficulty with other network carriers.  Network carries and Apple fight over branding (Apple adamantly refuses to let a carrier put the carrier’s brand on its products and services); over the app store (China’s largest cell carrier and Apple finally couldn’t get to a deal because, among other things, Apple would not relinquish control of the App Store);  subsidy on the iPhone (The iPhone is the best and most popular smartphone in the world.  It’s a game changer for which Apple demands a commensurate subsidy); and whether or not the carrier will get any exclusive on distribution of the iPhone (Apple is generally against providing an exclusive, while, where there is a dominant carrier, it wants an exclusive).  Signing application has nothing to do with forgoing, which are all business considerations.

Singing also only works when, as is the case with Apple, you control the distribution database, i.e., the App Store.  If there are other app stores that can install apps on the iPhone, your security is only as strong as the weakest app store.  In such a scheme, Apple would be blamed for security breaches that it had no ability to control.  That’s a fool’s bargain.

   Quote

Bosco (Brad Hutchings) said:

Nemo… Stick with arguing things you know about wink. For example, did you know that, other than the failed Pippen, the iPhone is the first device Apple has made where developers had to have permission to ship a product and users could only get the software from Apple. That is what I mean about Apple putting itself between developers and customers. This imposition makes custom vertical apps near impossible on the iPhone and iPod Touch, which are perfect devices for such apps.

Also, Apple market cap: 160B-ish, Verizon market cap 90B-ish. Apple has a much better cash position, so it could get into this game and become a dominant player by default. You argue that Apple would have to operate a carrier like traditional carriers have. I argue that Apple has game changer devices and vision. Look, one day soon, we’re not going to be buying cell minutes. We’ll just buy a data contract on an IP-derivative network. Unless one of the big 3 take the initiative, or it bubbles up from a small Euro market, expect Apple or Google to be the transformative force.

Look at your argument against signing… It totally ignores that right now, there are a ton of customers using jailbreaked phones. The current system isn’t “secure”. It relies on customers not knowing about or being afraid of consequences. And your point about signatures is incorrect. You need only control the signature database (for carrier network access). In fact, Apple need not control that. The carriers can. The carriers could, for example, grant any app some baseline bandwidth (which might preclude real-time telephony) and require a review process and signature for apps needing more raw bandwidth or a bandwidth signature consistent with telephony or video conferencing.

Hey, I love my new iPhone. I don’t plan to jailbreak. But I also know that it’s crippled by Apple’s hyper-control. I think Google will probably be the change agent that gets us to a more content neutral wireless network, free of artificial billing choke points like voice minutes. Apple could be, but I don’t think they have the vision to do it. Apple will take its superior UI and jump on the bandwagon, making a tidy profit as it always does. But Google will take the risk and reap the major rewards.

   Quote

gregory meek said:

I cannot believe this is an issue.
It is their product. They every right to control it.
Protecting the user experience protects their brand. Its a policy/practice that serves Apple well.
I think their reviewers and the review process are amazing!
A superhuman effort. Can you imagine that workload?
60,000 apps available, millions of iphones, billions of downloads…
I think there are few people out there (developers and users) who are quite happy with the process and the product.
Taking control away from them will only undermine innovation and quality.
To the chronic malcontents -if you don’t like the game, don’t play.

   Quote

Nemo said:

Dear Boscho:  That Apple may not have done this before proves nothing.  Apple hasn’t had a product like the iPhone before, and before the App Store, there was nothing like the App Store.  So prior to the App Store and the iPhone, there are no precedents.  Certainly, before the App Store, there weren’t any satisfactory way for customers to get apps for their smartphones, and for developers, there weren’t any satisfactory ways to profitably distribute apps for smartphones.  This is a brand new ball game.  And I am sure that my experience is, therefore, every bit as valid as yours.

Because nearly every carrier wanted to impose onerous restrictions on the the technology in the iPhone, Apple, according to Steve Jobs, took a very rigorous look at getting into the network business.  There are only two ways of doing it:  Either build a network from scratch or wholesale the carriers network services.  Well, no one succeeded in wholesaling the three major carriers network, though several have tired.  And building a physical network from scratch is simply prohibitively expensive.  That is why both Google and Apple passed on getting into the network business, when they each decided not to bid on the 700 MHz spectrum.

Jailbroken iPhone are insecure, as several hackers at the BlackHat conference demonstrated.  And there is no way that Apple will ever give control of the database, that is, the App Store, to the carriers.  What are you smoking?  That barely deserves a serious response.  Apple will give control of the signature database, which is an essential function of the App Store, to the carriers?  As Barney Frank recently said in a different context: What planet do you spend most of your time on?  And if you, as either customer or developer, don’t like Apple’s control of the App Store, just you wait until you get a taste of Sprint, AT&T, or Verizon’s control.

   Quote

geoduck said:

Look, one day soon, we’re not going to be buying cell minutes. We’ll just buy a data contract on an IP-derivative network.

I like the idea but I can’t agree with the soon part. Cell phone companies have us by<insert risque simile here> and they won’t give it up without a long, protracted and bloody fight. They broke up Ma-Bell and it didn’t work; 20-something years later it’s back and stronger than ever and surrounded by fraternal brother companies. The political power the cell companies weald means that there won’t be legislative or regulatory action to open up the system and reduce costs to the consumers. There isn’t really competition; the principals ‘complete’ with a nudge-nudge-wink toward each other. Lastly, it’s irrelevant in Apple has a higher Market Cap than Verizon. if Apple or Google, or MS tried to seriously compete in that market, they would face the combined might of the entrenched companies meaning a long costly fight that they would likely lose. Apple and the rest are smarter than to try that. As Nemo said;

That is why both Google and Apple passed on getting into the network business, when they each decided not to bid on the 700 MHz spectrum

As far as letting the carriers control the signature database, IMO that would be a step in the wrong direction. It would give more power to the cell companies at a time when they have too much power and have shown that they have no qualms about using it to screw the customers repeatedly.

http://www.electronista.com/articles/09/08/21/att.needs.data.on.sphones/

The first step that Apple should work on is freeing itself from AT&T. Not that are any worse than the other companies, it’s just that right now they have the iPhone monopoly. Once the iPhone is available on any and all carriers, then there might be some semblance of real competition.

But I’m not holding my breath.

   Quote

Bosco (Brad Hutchings) said:

Apple has $30B cash on hand. Google has $20B cash on hand. Sprint has a market cap of $11.2B. Do I think it’s likely one of them would purchase a carrier and turn it into a content agnostic data carrier? No. Do I think it’s more like that Apple would than Google? No. But it’s possible. Microsoft also has $30B in the bank. But their game is operating systems.

I would not advocate the cell carriers having master control of THE[\b] signature database, only the signature database for using their data networks. Simultaneously, I advocate Apple ditching the approval process. It’s funny how all the proponents of it can’t come up with a better argument for it than what essentially boils down to “Apple can do no wrong”. Fanboy mentality. Lots of people may be buying. Heck, I bought two of them. And I buy from the App Store often. But as a developer, the risks are too high and the rewards uncertain, especially for vertical market apps. I would love to see another manufacturer that gets how to not be evil create a phone I’ll want to buy. I would love it even better if it were Apple with the iPhone.

   Quote

geoduck said:

It’s funny how all the proponents of it can’t come up with a better argument for it than what essentially boils down to “Apple can do no wrong”.

That is a good point. It brings up the fundamental question: Why is there an approval process? More to the point why was it created? There must have been a point when someone at Apple said ‘we have to be the gatekeeper’. Things like this don’t spontaneously appear. Somebody made the decision for some good business reason to have Apple approve or deny all apps.

I’m guessing the reason was liability. Both to prevent obvious malware from getting on the iPhone and then having to repair a million handsets because Fart.app screwed with the OS. Also because of Apple being responsible if Fart.app copied everyone’s personal data and transmitted it to a spammer. Also, I think Apple may be afraid that they might be liable in some way if something that came through the App Store were used in a criminal endeavor, or allowed children access to porn, etc. Lastly, I really believe that Apple is holding up Apps that might compete with AT&T’s own services. That may have been part of their contract with the carrier.

So what wold be the risk if Apple had two lists? A list of approved, Apple Certified Apps that were guaranteed to be free of Malware and porn. Then a open list, tested to make sure they don’t screw with the OS, but otherwise available at a higher price ‘at your own risk’.

   Quote

daemon said:

I’m guessing the reason was liability. Both to prevent obvious malware from getting on the iPhone and then having to repair a million handsets because Fart.app screwed with the OS.

No, the reason had nothing to do with liability and everything to do with power. If Apple could get away with doing this exact same thing on all of it’s laptops and desktops it would.

   Quote

Bosco (Brad Hutchings) said:

No, the reason had nothing to do with liability and everything to do with power. If Apple could get away with doing this exact same thing on all of it’s laptops and desktops it would.

Yahtzee! Monetize the Eschaton. @geoduck: It’s hilarious that people think an approval process can “guarantee” that porn and malware don’t get through. Both will if they haven’t already. One thing the approval process can do is ensure that kids can’t have an app to read community sourced books. My main product is used in thousands of schools and lets kids create and share picture books. A reader app that accesses the net to get new content each day would get the over 17 rating from Apple. Imagine telling teachers to download an adult only app for their kids. Not even worth the bother until that changes. We have a web app and it’ll have to do.

   Quote

geoduck said:

It’s hilarious that people think an approval process can “guarantee” that porn and malware don’t get through.

I agree, the people that create that stuff are exceedingly clever when it comes to getting it out. I just feel that Apple wants to establish that it’s making and ATTEMPT to prevent it. A good faith effort, in order to blunt the puritans that will blame Apple of Johnny sees a boob. You know the same ones that will raise bloody hell if Catcher in the Rye or Lady Chatterly’s Lover is in the school library.

It won’t be effective on either count so I really think Apple should just go to a two level store; one for tested, vetted, and certified apps, and a danger zone where they test for the most basic safety but other than that it’s download at your own risk. Either that or let people install 3rd party apps from another source. We may be seeing the beginnings of a backlash at Apples heavy handedness.

   Quote

Voice said:

3. RE: “There are more than 40 full-time trained reviewers, and at least two different reviewers study each application so that the review process is applied uniformly…” and “We receive about 8,500 new applications and updates every week, and roughly 20% of them are not approved as originally submitted. In little more than a year, we have reviewed more than 200,000 applications and updates.”

This suggests even less time per app review than I had previously speculated. I hadn’t considered how many apps are submitted but never approved (65,000 approved vs. 200,000 submitted). As similarly pointed out by Adam Engst (http://db.tidbits.com/article/10497), this can work out to as little as 5 minutes per app. This hardly seems adequate.

There’s a slight difference between the numbers you’re quoting here.

200,000 apps *or updates* submitted
~65,000 apps approved

Assuming current apps average 3 updates, there’s no real discrepancy between those numbers.  Not all apps with have 3 updates, but a good number of the ones *I* have on my iPhone have more than that, so it likely averages out.  Remember, a bunch of apps did updates to support 3.0.

No doubt many developers would like the information they get back about why their app wasn’t approved to give more in-depth specifics, but with 40 people working on it, I can kind of understand the lack.  8,500 new apps and updates each week means that their typical reviewer gets 212.5 apps and updates to review each week, or 30.3/day.  Sounds like they really need to staff-up in that department.  Quadruple the department, and even with an increase in activity they can only have to handle 10/day.

   Quote

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