Facebook has largely been shut out of China since 2009, but that isn't stopping it from getting involved in the country… albeit in very roundabout ways. The New York Times has learned that Facebook released a photo sharing app in China, Colorful Ba…
A group of 28 developers in China have enlisted a local law firm to file a complaint against Apple in a case alleging that the company engaged in “monopolistic behavior” during some of the actions it has taken to regulate the App Store in China (via The Wall Street Journal).
Lin Wei, an attorney with Dare & Sure Law Firm, filed the complaint this week and targeted Apple for removing apps from the App Store “without detailed explanation and charging excessive fees for in-app purchases.” Wei said that Dare & Sure has spoken to different enterprises and received a “very strong response” from each, related to potential antitrust violations with Apple’s App Store localization processes.
The complaint accuses Apple of engaging in monopolistic behavior by removing apps from the App Store without detailed explanation and charging excessive fees for in-app purchases. The complaint also alleges Apple doesn’t give details on why apps are removed and puts local developers at a disadvantage by not responding to queries in Chinese.
“There is a lack of transparency in the App Store operation,” Mr. Lin said. “At this stage, we think complaining to the Chinese regulators to get them involved is most ideal.”
According to Reuters, the case dates back to April of this year, when Dare & Sure invited developers to join and ended up with the 28 in question who are now part of the official complaint made this week. The law firm filed the complaint with two organizations that handle antitrust matters: China’s State Administration for Industry and Commerce and the National Development and Reform Commission.
The details of what developers and which apps are involved in the complaint were not given, although an Apple spokeswoman mentioned in a brief comment to Reuters that app publishing remains consistent across all countries. There are some exceptions, however, when local laws force Apple to change its policies, most recently when the company pulled the majority of virtual private network apps from the App Store in China because of strict regulations in the country that require VPN apps to be authorized by the government.
In addition, the Apple spokeswoman said that the company is currently working on expanding its local developer relations team to help bolster app development in the country. Apple has faced issues in the past within China, particularly related to controversial content it has sold on the iTunes and iBooks storefronts, but earlier this year Apple CEO Tim Cook reiterated on the company’s plans to continue investing in the country, telling local media, “We’re here to stay.”
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Last weekend Apple removed all major VPN apps from the App Store in China. In a statement the next day provided to TechCrunch, it explained that China requires all VPN developers to have a license issued by the government, and they’ve been required to remove some VPN apps in China that don’t meet the new regulations. The three sentence statement didn’t really go into depth on… Read More
Apple had a pretty good quarter — the stock just jumped 4 percent after hours on $45.4 billion in revenue and earnings per share of $1.67.
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Apple’s difficulty in garnering a larger share of the smartphone market in China has been looked at recently by The Wall Street Journal, which described the ubiquitous mobile app WeChat [Direct Link] as the iPhone’s “toughest rival” in the country. Citing data from QuestMobile, on average WeChat is said to have captured nearly 35 percent of each user’s monthly smartphone usage time, averaging about 1 billion monthly active users in total.
The problem for Apple is that WeChat is an entire ecosystem, with one app allowing users to pay for services, text, call cabs, watch videos, play mobile games, and access cloud-based “mini programs,” or apps that don’t need to be downloaded to a device to be used. Because all of these WeChat features are universal across smartphone brands, analysts speaking with The Wall Street Journal questioned whether or not Apple is “losing its edge” in China.
Specifically, Apple saw a sales drop in Greater China (including Hong Kong and Taiwan) in the first half of this past fiscal year, with revenue falling 13 percent in the period. According to analysts looking towards the launch of the iPhone 8, that device’s success “largely depends on sales in China.”
Skeptical investors are asking whether consumers in China will pay $1,000 for a new iPhone, when they spend more than 60% of their phone time inside a system from Tencent or from rivals Baidu Inc. and Alibaba Group Holding Ltd. “That’s the question: Is Apple losing its edge?” said Katy Huberty of Morgan Stanley, who remains optimistic about Apple’s prospects in China.
Apple has been making moves recently to focus on China, including naming Isabel Ge Mahe as vice president and managing director of Greater China, who is said to ensure that Apple’s products and services appeal specifically to China users. Just this weekend, Apple also removed VPN apps from the China App Store, a move that could potentially help Apple gain favor with Chinese authorities.
Some iOS 11 features — such as the new QR code scanner in the Camera app — are also seen as a way for Apple to appeal to users in China who are used to having these abilities on hand with WeChat. If Apple doesn’t continue to bolster its software, solely relying on upgraded hardware changes might not be enough to convince iPhone users to stick around, according to analyst Ben Thompson.
Tailoring software for the market could be critical to keeping the iPhone competitive. Otherwise, Mr. Thompson wrote, Apple runs the risk that the phone’s appearance becomes the only thing that matters when Chinese consumers buy a new device.
Such a shift potentially would force Apple to overhaul its entire business model, moving to a system where it releases a new-looking phone annually rather than every other year, as it does currently.
In terms of market share, market research firm Warren Capital noted that Apple and the iPhone have taken fourth place in China, behind Oppo, Vivo, and Huawei. Apple dropped to fifth place in terms of smartphone devices shipped in Q4 2016 (with Xiaomi added into the mix along with the previously mentioned Chinese brands), and in April Kantar Worldpanel’s data noted that iOS dropped to its lowest share of the China smartphone market since 2014.
Thompson points to WeChat as a major reason only 50 percent of China-based iPhone owners stayed with Apple when purchasing a new phone, while in other countries that number is closer to 80 percent on average. Since users spend so much time within WeChat and rarely see any other advantages to owning an iPhone, the app “has turned Apple into just another vendor in China,” which analysts see as particularly problematic for Apple as the iPhone 8 launch grows nearer.
During a visit to China earlier in the year, Apple CEO Tim Cook told local media outlet Caixin, “We’re not just someone who’s here to access the market. We’ve created almost 5 million jobs in China. I’m not sure there are too many companies, domestic or foreign, who can say that.” Ultimately, Cook said that Apple isn’t afraid of the challenges it faces in China, telling the site that Apple is “here to stay.”
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Russia has banned VPNs and other software that enables users to gain anonymous access to websites. The new law was signed by President Vladimir Putin on Monday and will come into effect on November 1st (via TechCrunch).
Leonid Levin, chairman of the Duma’s committee on information policy and technology, was quoted by state-run media as saying that the new law is not targeted at “introducing new bans for law-abiding citizens” but aims to prohibit access to illegal content.
However, privacy advocates see the law as another way for the Russian government to restrict access to political content that it disagrees with. In 2015, it became mandatory for all user data from Russian citizens to be stored in Russian-based servers, and last year another law was passed making it necessary for internet service providers to retain traffic data for up to a year.
Recently the government also threatened to block access to the Telegram encrypted messaging platform unless the company that runs the app provides more information about itself.
Elsewhere, virtual private networks took another blow over the weekend, as reports emerged that Apple has removed the majority of VPN apps from the App Store in China, following regulations passed earlier in the year that require such apps to be authorized by the Chinese government.
The action was first revealed by ExpressVPN, a provider based outside of China. The company said in a blog post that “all major VPN apps” including its own had been removed from the App Store.
“We’re disappointed in this development, as it represents the most drastic measure the Chinese government has taken to block the use of VPNs to date, and we are troubled to see Apple aiding China’s censorship efforts. ExpressVPN strongly condemns these measures, which threaten free speech and civil liberties,” ExpressVPN wrote on its blog.
The company shared a note from Apple explaining that its app was removed because “it includes content that is illegal in China”. A few hours later, Apple issued a statement to TechCrunch explaining its decision to pull the apps from the App Store:
Earlier this year China’s MIIT announced that all developers offering VPNs must obtain a license from the government. We have been required to remove some VPN apps in China that do not meet the new regulations. These apps remain available in all other markets where they do business.
Earlier this month, China reportedly started blocking some features of the WhatsApp messaging service, as authorities continued to tighten controls over the country’s internet.
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