Apple’s war on streaming and super apps helped set it up for an antitrust battle

Apple is facing a monumental antitrust lawsuit from the Department of Justice, and a large part of the agency’s argument centers around Apple’s alleged attempts to suppress cloud gaming services and so-called “super” apps. Namely, the DOJ claims Apple stifled the development of both types of services to maintain its monopoly on the mobile market.

As cloud streaming services started becoming more popular in 2020, Apple introduced new rules that seemed designed to give services like Xbox Cloud Gaming, Facebook Gaming, and GeForce Now a place on the App Store. But in reality, it did the opposite. The rules severely limited the presence of cloud gaming services on the App Store, as Apple required developers to submit their games to the App Store for approval individually — rather than having them exist in a singular hub of games.

This led cloud streaming services to bring their game hubs to web browsers on the iPhone instead, making them far less convenient for users to find and access. Apple only recently reversed this rule by allowing cloud streaming services to submit a single app “with the capability to stream all of the games offered in their catalog.” Despite this, the DOJ claims Apple “wielded its power over app distribution to effectively prevent” developers from offering cloud streaming services on the iPhone, adding that “even today, none are currently available on the iPhone.”

Apple didn’t want cloud streaming to exist on the iPhone in the first place, the DOJ alleges. Since cloud streaming services allow users to play games hosted on a remote server, this eliminates the need for powerful hardware to run demanding games. In other words, users could purchase a cheaper Android device or even an older, used iPhone to play stream games on mobile instead of shelling out $799 for a brand-new iPhone 15.

“For years, Apple blocked cloud gaming apps that would have given users access to desirable apps and content without needing to pay for expensive Apple hardware because this would threaten its monopoly power,” the lawsuit reads. “In Apple’s own words, it feared a world where ‘all that matters is who has the cheapest hardware’ and consumers could ‘buy[] a [expletive] Android for 25 bux at a garage sale and... have a solid cloud computing device’ that ‘works fine.’”

Additionally, the DOJ is also going after Apple’s limitations on super apps, which offer access to a range of different services from a single application and are especially popular in Asia. For example, WeChat, which is huge in China, functions as a messaging, payment, and short-form video-sharing service. It also lets users install “mini” programs that exist within WeChat.

This setup is convenient for users and developers, the DOJ argues, as users don’t have to download a bunch of separate apps to gain access to different capabilities. Meanwhile, developers also don’t have to push separate app updates for Android and iOS, since these programs run within an app instead of on a phone itself.

However, the DOJ’s lawsuit claims that Apple doesn’t want users or companies in the US to benefit from super apps. It notes that during a board of directors presentation, Apple cited super apps as a “major headwind” to boosting iPhone sales in countries where they’re popular because of “[l]ow stickiness” and “[l]ow switching costs.” If someone benefits from using a super app, they don’t necessarily need to be tied to any one ecosystem — like Apple’s.

The iPhone maker sees super apps as “‘fundamentally disruptive’ to ‘existing app distribution and development paradigms’ and ultimately Apple’s monopoly power,” the lawsuit reads. That’s why it’s allegedly blocking developers from putting them on the App Store by requiring super apps to display mini programs in a “flat, text-only list” rather than as individual icons or tiles. The company also doesn’t allow super apps to categorize mini programs in their apps, preventing them from showing recently played games or a list of titles from the same developer.

“Apple recognizes that super apps with mini programs would threaten its monopoly,” the lawsuit states. “As one Apple manager put it, allowing super apps to become ‘the main gateway where people play games, book a car, make payments, etc.’ would ‘let the barbarians in at the gate.’”

Although the lawsuit mentions that Apple blocks mini apps from using the API they need to use Apple’s in-app purchase system, the company said it would start letting mini apps and games use its system in January. It’s unclear whether the change addresses the formatting arguments the DOJ makes in its lawsuits, as the App Store Guidelines only mention that mini apps should adhere to privacy rules, among other unrelated requirements.

Apple denies the claims outlined in the suit, as company spokesperson Fred Sainz says that it “threatens who we are and the principles that set Apple products apart in fiercely competitive markets.” At the same time, Apple is also contending with new antitrust rules in the European Union, which have forced the tech giant to open iOS to third-party marketplaces, sideloading, and new default settings. But some prominent developers argue that Apple’s changes still aren’t enough.

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