Apple Shows Us How to Use Network Effects as a Substitute for DRM

Posted by: Benjamin Kafka

With the introduction of the Mac App Store with the new version of Mac OS X, “Lion,” Apple has taken a big step toward applying the same restrictive approach to its desktop operating system that it has with its mobile iOS, which runs iPhones, iPads, and the iPod Touch. In iOS, Apple’s (somewhat ironically-titled) FairPlay digital rights management technology prevents users from installing any app from outside Apple’s own App Store. If you are an app developer who wants to develop for iOS devices, then, the App Store is the only game in town and your app must comply with Apple’s stringent requirements to be included. Some of the requirements focus on basic reliability, but apps are also rejected for other reasons, including the duplication of an iOS function. In some cases, apps are rejected simply as a matter of censorship: the Eucalyptus e-book reader was initially rejected because users might use the app to download the Kama Sutra ( It is of course possible to side-load a third-party app to an iOS device from somewhere other than Apple’s App Store, but this requires jailbreaking the device. Jailbreaking voids the warranty, however, and as recently as a year ago fewer than 10% of iPhone owners had chosen to do so (

The new Mac App Store, which is a feature of the upcoming version of OS X, has similarly restrictive requirements for app submissions (guidelines available at Among the apps that will be rejected are “apps that crash,” any apps in beta form, and any app that presents a license screen at launch, causing some to speculate that applications such as Microsoft Word, Adobe Photoshop (both of which crash), and Firefox (often in beta), would not make the cut ( This might not seem to be a huge problem given that OS X users will still be able to install applications from outside the Mac App Store, but this is where network effects take over for FairPlay. As the Mac App Store becomes the primary source for OS X applications–and, given the importance of convenience and Apple-approvedness to the vast legions of Mac users who chose the platform for its ease of use, there is no reason to believe it won’t–app developers will have little incentive to write any application that fails to meet Apple’s guidelines.

For many users, this walled-garden approach makes sense. Having Apple vet every program for stability seems like a good thing, particularly on a platform lauded for its stability and security. And despite Apple’s stringent requirements there are still over 200,000 apps in the App Store. Apple, moreover, has an undeniably strong interest in simplifying the user experience on its devices. But the degree of control Apple is exerting over its customers’ machines is still cause for concern. Columbia Law professor Tim Wu views Apple as the biggest threat to a decentralized, open Internet (, and controlling software delivery is a good way to build what he describes as an “information monopoly.” This seems especially true in light of Mac App Store requirement 6.2, rejecting any apps “that look similar to Apple Products or apps bundled on the Mac, including the Finder, iChat, iTunes, and Dashboard.”


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