Kaspersky Lab files antitrust complaint against Apple in Russia

On March 19th, Kaspersky Lab filed a complaint against Apple Inc. with the Federal Antimonopoly Service. Our claim pertains to Apple’s policy on applications distributed through the App Store. Despite a long history of working successfully with Apple, we believe that this is a necessary step.

Why Kaspersky Lab decided to apply to the FAS

It was the following situation that compelled us to file the complaint.

Last year, we received notice from Apple saying that our application, Kaspersky Safe Kids for iOS, does not meet the requirements of paragraph 2.5.1 of the guidelines for applications hosted in the App Store. Apple had never before had any issues with Kaspersky Safe Kids: the application had been hosted in the App Store, meeting all the guidelines, for nearly three years.

It turned out that, according to Apple, the use of configuration profiles was against App Store policy, and Apple demanded that these be removed, so that the application could pass the review and be published in the store. For us, that would mean removing two key features from Kaspersky Safe Kids: application control and Safari browser blocking.

Both features are essential. The first allows parents to specify which applications kids cannot run based on the App Store’s age restrictions. The second allows the hiding of all browsers on the device, so kids can only open web pages in a secure browser built in Kaspersky Safe Kids that protects them against unsafe content.

So, by removing these two features from Kaspersky Safe Kids for iOS, we are massively letting down parents, who expect that their kids will be able to safely use iPhones and iPads that have our application installed on them. We believe it is essential that all our customers, whether they are young or old, are completely safe and get exactly what they expect.

Why we believe we are right

The change in Apple’s policy towards our app (as well as towards every other developer of parental control software), notably came on the heels of the Cupertino-based company announcing its own Screen Time feature as part of iOS 12. This feature allows users to monitor the amount of time they spend using certain applications or on certain websites, and set time restrictions. It is essentially Apple’s own app for parental control.

From our point of view, Apple appears to be using its position as platform owner and supervisor of the sole channel for delivering applications to users of the platform to dictate terms and prevent other developers from operating on equal terms with it. Due to the new rules appearing, developers of parental control applications may lose some of their users and experience financial impact. Most importantly, however, it is the users who will suffer as they miss out on some critical security features. The market for parental control apps will head toward a monopoly, and consequently, stagnation.

One might argue that the App Store is owned by Apple itself, so why should the company not call the tune? The problem is that Apple does not allow the use of any other application marketplaces for iOS, so it effectively controls the only channel for delivering applications from developers to users.

By setting its own rules for that channel, it extends its power in the market over other, adjacent markets: for instance, the parental control software market, where it has only just become anything of a player. It is precisely in this extension of its leverage through possession of so-called “key capacity” over other segments, leading to restriction and elimination of competition, that we see the essential elements of antitrust law violation, which consist of erecting barriers and discriminating against our software.

We have repeatedly tried to contact Apple to resolve this situation, but no meaningful negotiations have ensued.

We are not alone

The issue of a ban on the use of configuration profiles has, to varying degrees, affected every developer of parental control apps, not just us. This is, however, not the only issue that developers have with Apple. For instance, Spotify recently filed a complaint against Apple with the European Commission, similarly claiming that the Cupertino company has been using its monopoly for advancing its services without giving others a chance to compete on equal terms.

Other developers of parental control solutions, who have lost the ability to restrict access to applications, are also less than thrilled. For instance, AdGuard has found itself in a similar situation. And to name another example, the parental control application Kidslox can still be downloaded from the App Store, but updates have not passed the Apple review, so cannot get into the application marketplace.

We found ourselves in a similar situation with Microsoft back in the day, but a recourse to the regulator helped us to solve the problem and go on working with the company on terms that were acceptable to both the entire cybersecurity industry and users.

We very much hope that we will also be able to continue our winning relationship with Apple, and that requires us to create an environment where Kaspersky Lab and other companies compete on an equal footing. The environment is very different at the moment, which is why we are in the process of applying to the Federal Antimonopoly Service.

Why monopolies are a bad thing

Development and progress are only possible amid healthy competition, that is, where companies that create similar products must come up with something to draw users to their idea. When a dominant entity emerges in the market, it immediately starts to set its own rules, which everyone has to follow. Oftentimes, these rules put many at a disadvantage, leaving them with no choice. Progress virtually stalls as a result, as it makes no sense to the monopolist to evolve its ideas, with there being no alternatives available.

It is for the purpose of resolving situations such as this that regulators like the Federal Antimonopoly Service exist, and issues of this type have traditionally been resolved at the government level. Nations are deeply concerned about the issue of monopolies, as countries are interested in the healthy development of as many companies as possible, not just the biggest one.

Recently, for example, United States Senator Elizabeth Warren proposed prohibiting large companies that become monopolies, such as Facebook (which, incidentally, owns Instagram and WhatsApp), Google, Apple and Amazon, from publishing applications on their own platforms. Warren proposes breaking up the big tech companies and prohibiting them from promoting their products on platforms they own, as under the current scenario, they will give preferences to their own products by default. Indeed, who wouldn’t?

The United States has been through that before, for example, with Standard Oil Co., which produced, transported, refined and marketed petrochemicals. When a similar situation unfolded one hundred years ago,  the U.S. government decided to break up Standard Oil. It split into a number of smaller companies, but the breakup eventually doubled the collective value of the Standard Oil stock.

We are therefore confident that we are right and that our initiative will benefit the market at large. We very much hope that Apple will provide competitive terms to third-party developers, so that it can continue its winning relationship with the company and the advancement of progress.