For a long time I've been confused about the rules of monopolies. Microsoft got into a lot of trouble when they bundled IE into Windows so much so that the US threatened heavily to break up the company.
Fast forward a decade later and apple, google and amazon bundle a crazy amount of unrelated services into their platforms without the regulators raising an eyebrow...
They bundled _while_ having a monopoly. They could have bundled or they could have had a monopoly, but doing both is where it crosses the anti-trust line since your customers are effectively captive.
What does Apple have a monopoly on? What does Amazon have a monopoly on? Google arguably has a monopoly on search which could put them in an unfavorable position should an antitrust case be brought against them (maybe why they added DDG to a default search engine choice in chrome, see judge, there are other search options!).
This has very little to do with monopolies and much more to do with enforcement.
The most persistent misconception about antitrust regulation in the US, and one repeated over and over on HN and in this thread, is that it only applies to businesses in a monopoly position. While the original Sherman Act of 1890 explicitly targeted monopolies, the 1914 Clayton Act expanded its scope to encompass a range of anticompetitive practices, including predatory pricing. [1]
A market actor need not be a monopoly to engage in these behaviors, only a dominant position that they are abusing.
i feel this is dangerous thinking. maybe apple doesn't have a monopoly on a particular market in terms of market share, but their influence on businesses, markets, policies, etc. is massive and is basically indistinguishable from a market monopoly. with their amount of money and position in the market, they have near limitless influence on other companies and ways of abusing this influence to act in their favor. they've done it many, many times, and continue to do it.
The term monopoly should be well defined. If you apply that definition to the real world situation and ask yourself the question "What does Apple have a monopoly on?". How is that "dangerous thinking"?
You can argue the term isn't well defined or you can disagree with the definition. But you can't say it is "dangerous thinking" when someone simply applies the definition.
i thought it was clear what i considered dangerous thinking, that is the assumption that apple doesn't have a monopoly in the strict sense of controlling a certain commodity or market and thus no one needs to worry about their behavior with regards to competitive or anti-competitive practices. the implication in the comment i replied to was that apple doesn't have a monopoly according to its definition and thus there's no need to worry or consider anti-trust things. that is dangerous thinking because there is more to worry about with today's mega-companies than the strict definition of a monopoly. it is this dangerous thinking that has allowed them and these other larger companies to exert major influence on markets, economies, competitors, suppliers, policies, and governments.
> But you can't say it is "dangerous thinking" when someone simply applies the definition.
>but their influence on businesses, markets, policies, etc. is massive and is basically indistinguishable from a market monopoly...
That won't hold up well in a court of law. That's the problem, we need to change the law. Because the law as it is currently written, just doesn't see something like Apple as anything close to a monopoly.
Imho, the modern monopoly phrasing should be "a substantial market share" (where substantial is defined both in absolute terms AND as a userbase large enough to be self-sufficient and fund best-of-breed category development).
Iff that is true, you should be prohibited from preinstalling, offering, or endorsing any marketplace... without a customer being able to substitute another at their discretion.
Thereby requiring that you make any and all technical considerations necessary for an alternate marketplace to interface with the end user in exactly the same way your marketplace does. (Aka a public, dogfooded API, and no secret internal API shenanigans).
That wouldn't fly. A small company could release a best of breed product, and everyone could say it meets the definition of a monopoly. Unless you mean that the company would have to have a certain minimum marketshare AND ALSO would have to have best of breed product. (But even that would be problematic. We could likely get courts to go for something like 60%+, or even 50%+ with effort. But the courts are just gonna have a big problem with anything less than 50%.)
I'm not saying these businesses should be illegal, simply that there are additional responsibilities on them once they scale. Post-monopoly, maybe "significant market participant" would be better terminology.
There are two considerations that contribute to the ultimate consumer ills:
(1) Do I, as a user, have robust choice of alternatives with equivalent functionality? (Absolute market share * , coupled with self-sustainability)
In the case of the Android / iOS duopoly, I do not.
(2) Is the owner of the product using its dominance in such a way that users of the product must contribute post-initial-sale revenue to that owner?
In the case of Android & iOS, I must.
Monopolies will arise naturally in technology. And they're healthy: FAANMG deliver amazing technologies.
But a single choice should not allow a company to passively leverage your demand ever after (e.g. by attracting suppliers, from whom they can then take a cut). This extends beyond marketplaces and app stores, but they're the current offenders.
Amazon's shopping marketplace is the trickiest example. Is Amazon a "significant market participant" in online sales? Yes. Does the Amazon seller marketplace allow Amazon to extract additional revenue from suppliers by gatekeeping access to Amazon users' demand? Yes.
In Amazon and Walmart's cases, they should probably have retail cleaved from their logistics chains.
* I'd put this number low enough that the total number of large competitors should be sufficient to promote true choice. By gut, 2 is probably too small, 3 seems dicey, so let's say 25%.
>In the case of the Android / iOS duopoly, I do not...
???
Why's that?
Serious question.
And
>But a single choice should not allow a company to passively leverage your demand ever after...
That's how things have always worked though. And I'm not only talking about the tech industry now. I'm talking about nearly everything. Literally everything from Automobile manufacturers obliging you to buy accessories which fit only their vehicles, to sewing machines, even simple things like shaving razors.
We have to narrow our focus if we want the government and the courts to take us seriously. These shotgun approaches that qualify nearly every major corporation in nearly every market sector for a breakup just make us seem like amateurs.
You can't have a marketplace that you participate in? That just makes no sense. I mean think about it, you've just snared Walmart, Target, and dozens of other retailers with similar web presences in your net. You have to have something more tailored to tech companies, or you have to go with the laws as they stand. You can't say, "Oh, I just want to handicap companies comprising the top 25% of every market sector in the country." That makes you seem unreasonable.
i wasn't necessarily making a legal argument, but i agree with you. our government has stopped caring about corporate influence because they benefit from it while it hurts society as a whole.
"their" platform. nominally you can install whatever you want using profiles, but effectively having to do so is an artificially high barrier to entry for competing app stores (not to mention you have to pay apple $100/year for the 'privilege' of installing whatever you want on your own device for a year. no way to do so permanently.)
the degree to which apple has singlemindedly anticompetitively abused their vertical integration frankly astonishes me. the breaking point for me was opening the music app on the at the time 'latest' ios to be presented with a full page ad for apple music.
utter garbage and I hope they get what's coming to them before they have a chance to worm out of it.
The law will not see a company as having a monopoly just because they have a monopoly on their product. (Especially when that product has a minority market position.)
Now there is a completely separate question of unfair competition, but this has to be answered on an App by App basis. Does Apple have an app that provides the service in question? Does Apple disallow competing apps which provide that same service? Is there a compelling reason for the prohibition (Security, physical safety, etc.)?
There's an awful lot that goes into those questions. That said, it seems to me that if Apple is prohibiting spotify from being on its devices, this could be unfair competition. I don't really see any issue of safety with spotify. (I don't use it though, so if there is some safety or security issue with it, I'll freely admit I'm wrong.)
Then, of course, the issue of the tax. That's a non-starter. Apple, actually any company, is allowed to charge for services rendered. They can't be compelled to provide app store and ecommerce services at no cost.
> The law will not see a company as having a monopoly just because they have a monopoly on their product.
Having a monopoly on Clorox bleach doesn't mean you have a monopoly on bleach. You have to define what the market is.
The issue is that iOS app distribution and Android app distribution are two separate markets, in a way that Clorox bleach and Great Value bleach are not. The apps being distributed are not the same (they have to be written specifically for each platform), the customers for each are almost entirely disjoint, etc. You can't substitute one for the other. You can't distribute your iOS app to iOS devices via Amazon or Google Play.
It's like operating a school. You don't have a monopoly on schools, but you control what kind of books and equipment your students have to buy. If you specify commodities (e.g. any laptop with a minimum spec and a web browser), you don't have a monopoly there either. But if you require the students to buy a specific thing that only you provide, now you have a monopoly. You've created a market with no viable substitutes and no other competitors -- that's what a monopoly is. And that's what the App Store is.
> They can't be compelled to provide app store and ecommerce services at no cost.
Nor is that what's needed. What's needed is competing app stores for iOS apps.
Who cares if the Spotify apps for Android/iOS are coded differently ? It’s irrelevant. Users have access to the same app on both platforms with the same functionality. And Apple is not stopping these users from moving to Android.
And yes Apple has a monopoly on their products. So does every company.
> Who cares if the Spotify apps for Android/iOS are coded differently ?
It's a different product. It's like saying who cares if you can't sell shoes, go sell boots. Different products, different markets.
> Users have access to the same app on both platforms with the same functionality.
Not if Apple doesn't accept it in their app store.
> And Apple is not stopping these users from moving to Android.
Charter isn't stopping a homeowner from buying a house in Comcast's service area either. Having to replace a $1000 phone in order to get a $1 app is a prohibitively high barrier.
Moreover, in the market for app distribution the customer is the developer. Saying "you can sell to Android customers" is like a company with a regional monopoly in California saying "you can sell to customers in Texas" as an argument that they don't have a monopoly in California.
> And yes Apple has a monopoly on their products. So does every company.
Clorox has a monopoly on Clorox bleach, not on bleach, and other bleach is a perfect substitute. Apple has a monopoly on their App Store, which is the sole app store for iOS and there are no viable substitutes.
I don't even see why Apple needs a reason. As has been noted, they don't have a monopoly, and it IS their app store. I don't see why they can't just openly reject competing apps. If I'm running a doughnut shop where I sell my own doughnuts, I can let another vendor come in and sell coffee but turn away a competing doughnut maker.
Now... that doesn't mean that Apple aren't jagoffs in this matter. I'm sure they have bullet-proof fine-print, but the best attack one can make on them is that they're stealing from vendors by letting them waste development resources and then changing the rules when the development's done.
But Apple also sells phones, and selling music is just a side job. A better analogy is if you own the fairgrounds and an unlimited amount of booths that you to rent to food vendors, and you also sell doughnuts alongside the other vendors. But you don't let a competing doughnut vendor rent one of your booths. Is that anti-competitive? I don't know.
It’s one of the most fundamental parts of their ecosystem.
And your analogy is really bad. If you own a fairground and a doughtnut shop then it is not illegal to exclude competitors. It’s normal business practice.
Compared to Apple's main business of selling hardware, selling music is a side job.
And the fairgrounds analogy is better than the doughnut shop one. I didn't say it was perfect, but it illustrates the point. I also did not say that it was illegal or that it wasn't normal business practice--that's why I said "I don't know".
Google doesn't have a monopoly on search. Having a popular or high-quality product is not the same as having no competition. You can run an ecommerce business online entirely through instagram if you wanted to.
Amazon theoretically is abusing it's market power by being selective about which products it sells in it's stores. When they removed competing AppleTV/Chromecast products from their own and seller lines, to promote their firestick, that was monopolistic behavior. There's also arguments that Amazon is promoting their own line of products on their platform as well, by replicating products that end up being successful, but this is a new area for antitrust that needs to be sussed out.
Again, having a popular product is not a monopoly.
Monopoly is tied to access to competition. Monopolies have market dominance, but not all market dominant companies are monopolies. Windows was more of a monopoly in the 1990's because you went into a computer store and could typically only buy windows machines. This limits consumer options.
You can type https://www.bing.com into your browser right now, or any other number of accessible competitors, meaning that while popular, Google is not a monopoly. Consumers have a myriad of options and choose one because of it's quality, which is how competition on open markets work.
However, this argument falls apart when you look deeper into the fray of competition and examine barrier to entry.
Because so far search seems to be a self-perpetuating machine, it can be unfair to compare google and other searches as the amount of data Google already has could pose as an unfair advantage.
What if some other company had the same amount of data? Could they be doing a lot better job? Would the favor for google products dissapear?
really the entire concept of a 'store' has been bastardized by these companies (another thing we can thank apple for) and is a misdirect.
the locked down software platforms wherein users can't install anything on their own devices without the owning company's say-so is the artificial monopoly. they're trying to get away with adding things like device management now to weasel out of it but in reality these are artificially high barriers to entry for any competing software distribution services or 'stores'.
when Amazon can barely even get a foothold in a competing ecosystem with its own 'app store' you know it's anticompetitive and it's working.
Amazon can build their own phones and run their own store. In fact they did.
It’s just that their products were terrible and consumers didn’t want them. And the barrier to building your own ecosystem really isn’t that high anymore. We have hundreds of Chinese companies doing this today.
Agreed, and this is where some set of standardization is needed for antitrust law.
Store doesn't mean much. There needs to be a difference between hosting an online store that sells your own products and services, and hosting an online platform that sells your own things but also allows other businesses to sell on it as well.
The latter needs more guidelines on how the host ensures competition, especially when it starts to get market dominance and abuses control of the platform to promote it's own products.
Apple clearly has a monopoly on the sales and distribution of iPhone apps, and as evidenced by Spotify, they are wielding that monopoly anti-competitively.
"Just use a different smartphone" isn't a real defense in my opinion, any more than "just use a unix workstation" would be to Microsoft's desktop computer monopoly in the 1990s.
Comparing Apple to 90s Microsoft is a bad analogy. Apple has like sub-20% market share of smart phones. Google/Android is the 90s Microsoft in the smartphone market, not Apple.
Comparing Microsoft to Apple in the 2010's is a bad analogy. Microsoft tried to bundle a web browser by default. Apple outright bans competitor apps and takes a cut of almost every transaction that happens on the device.
Consumers have a viable and realistic alternative in Android and 80% of consumers choose to use that alternative. Consumers did not have a viable and realistic alternative to Windows in the 2000s.
My point is that Apple and Microsoft are different situations. You can't look at just the market share and ignore the other dimensions where they are arguable behaving worse than Microsoft ever did.
The illegality of what Microsoft did with Internet Explorer was contingent on them holding a monopoly on personal computing. They were using their monopoly as leverage to obtain other advantages. Apple does not have a monopoly on smartphones. Looking at marketshare is essential.
This argument is so prevalent, but it needs to be unpacked: would most iPhone customers buy a totally different phone only to run an app that Apple doesn't allow? Whether or not someone can switch phones isn't really the issue, but whether or not the phone has replaced general-purpose computing and access to the entire software industry is the issue.
Microsoft never had a monopoly. Apple existed at the time, as did Unix variants.
The attack on Microsoft was grandstanding BS, while the government has allowed the REAL customer-harming monopoly of Ticketmaster to not only continue but grow with its acquisitions of LiveNation and StubHub.
I was there, it was more like the US threatened to break up Microsoft, and then Microsoft, their army of lawyers, and the courts laughed the government out of the room. The government had to settle for lesser sanctions. ("Sanctions" which, in my opinion, were not sanctions at all.)
>Fast forward a decade later and apple, google and amazon bundle a crazy amount of unrelated services into their platforms without the regulators raising an eyebrow...
That's because the "sanctions" solidified that practice as explicitly legal. So now EVERYONE started doing it. The only thing you needed to do was to allow other people to put their unrelated services on your platform too. You could even charge other people for that if you wanted. (And you didn't even have to let unrelated services on your platform in certain cases. For instance, at the time, Windows was riddled with viruses and bugs, so where the safety or security of the consumer was concerned, you didn't have to allow or even have certain services on your platform. Little known loophole there.)
The problem was really that the issues on the face of it, to someone like me, a young developer activist at the time, were not really the questions dealt with when you finally get into court. The law is about the law, and there was no getting around it.
I became convinced that what we should be doing is trying to change the law. I'm just to old to put that kind of effort into agitating for changed laws any longer.
EDIT: It's probably only fair for me to add that the courts turned out to be right in the Microsoft case. History has shown that information processing paradigms can change on a dime. (PC to mobile). The law is there to provide reasonable safeguards to all actors in a market, and ensure that competition is fair. It's just that "fair" in the eyes of the law, looked a bit different than "fair" did in my own opinion.
> Microsoft got into a lot of trouble when they bundled IE
I think it is an impressive PR achievement by Microsoft that you remember it this way.
As a more recent example, when Google was fined related to Android, they tried to spin it as "being fined for bundling the play store". That is of course not what they were fined for, but it makes a nice memorable headline.
Microsoft bundled IE for the express purpose of putting Netscape out of business and used their market power to kill netscape. It’s not illegal to be a monopoly, it’s illegal to abuse that monopoly position. Google can make Maps and chrome and whatever, but they can’t force Samsung to not bundle a competeing maps app.
Counterpoint (and I say this as someone who currently makes a living via Apple's platform): Apple reserves a fair bit of system integration/functionality to their first-party apps. For example, on iOS no navigation app other than Apple Maps can actively navigate when the device is locked.
I'm not familiar enough with Android to know if Google does this as well.
Android has plenty of its own problems, but not so much in this category. Android users can set default browser, email, SMS app, etc., where iOS does not allow this. Any navigation app can work while the device is locked, it's enabled by a permission called "Draw over other apps", IIRC.
In my opinion, the problem with Android is not that you can't add to its functionality, which you can, but that you can't effectively limit Google's privacy-invasive functionality (much worse than iOS's) unless you can unlock the bootloader.
At that time Microsoft completely dominated desktop operating systems to the extent that it was an effective monopoly. It them attempted to leverage that position to try and squash other browser makers.
I agree that Apple is trying to squash Spotify, but I don't believe it doesn't have an effective monopoly on mobile phones.
Isn't their argument about the Apple Store and being able to put their product into the Apple Ecosystem? I didn't read any of it as saying they have a monopoly on phones.
no one is arguing it has a monopoly on mobile phones, the argument is and has always been that they have a monopoly on the ios software ecosystem they've built.
Yes, but from an anti-trust perspective, 'a monopoly on this thing I built' isn't an issue - arguably every company has a monopoly on that. It becomes an issue if 'this thing I built' captures an overwhelming economic sector, to the extent that consumers have no choice.
Currently consumers do have a choice - and more chose Android than Apple.
At the point where there is a threat to the Android ecosystem, with the possibility that app writers, consumers and handset manufacturers are forced to quit the platform because it isn't viable.
I believe this is because previously antitrust law was used when things were bad for competition but nowadays the thinking is more that antitrust laws should be used when things cause higher prices.
>nowadays the thinking is more that antitrust laws should be used when things cause higher prices.
That’s exactly what is happening...Spotify can offer price $x to their customers but Apple’s rules are forcing the price to be $x + 30% Apple Tax. Spotify has articulated numerous acts Apple has taken to ensure Spotify can’t circumvent the Apple Tax...Apple coming out with a competing App and being able to charge $x sans their own tax is just the icing on the anticompetitive cake.
This is one of the biggest issues with Google as well...where company was advertising on Google for $x, once google uses its position to determine they want to compete Google starts competing with their own customers for the same ads jacking up the ad pricing.
This basically ensures both Apple and Google can use their dominate market position and platforms to determine markets, market prices, and then unfairly compete with the market incumbents by offering the original $x price without the google/Apple Tax. There is no leaving the Apple/Google platforms at that point or you are basically waiving the white flag and telling your customers to go over to the Apple/Google product.
The difference is that Netscape Navigator was a paid application. Microsoft was bundling their product, which was free, with their OS. They OS was dominating the market, which meant that majority of people didn't have to buy from Netscape. They were forcing out the competition.
When Apple, Google and Amazon are releasing unrelated services into their platforms it isn't to starve out competitors but just expand their business. They aren't, as far as I know, drastically undercutting the prices of their services to levels that aren't sustainable for other companies to compete.
> They aren't, as far as I know, drastically undercutting the prices of their services to levels that aren't sustainable for other companies to compete.
The linked Spotify page says exactly the opposite.
> Because Apple Music doesn’t have to pay the 30% IAP charge, they are able to hugely undercut us and charge €9.99. To our fans, this just looked like we were ripping you off
This particular part of the argument doesn't make a lot of sense to me, at least looking at the US pricing. Apple Music is $9.99 a month; Spotify Premium is $9.99 a month and includes Hulu. If not paying the IAP charge means Apple could "hugely undercut" Spotify, then shouldn't Apple Music be, well, cheaper? By at least 30%?
(N.B.: I'm not defending the specific 30% cut that Apple takes or any of their other demands, just going "hmm" at the bit you've quoted.)
Spotify is saying they had to increase the price to $13 to sell on the store. This price was not popular so they left the store to maintain the $10 price across the board. This was back in 2016, not what is offered now.
> 2014 June
> So, we give IAP a try. That means we are now charged Apple's 30% tax and sadly have to increase our price for our fans... to €12.99 a month.
> 2015 June
> Because Apple Music doesn’t have to pay the 30% IAP charge, they are able to hugely undercut us and charge €9.99. To our fans, this just looked like we were ripping you off
> 2016 May
> We opt out of Apple's payment system and the artificially uncompetitive price we had to charge for using it
I was responding more so to the bundling of services rather than to the App Store specifically. Though, you could argue that the App Store and/or Apple Music are services that are bundled
> They aren't, as far as I know, drastically undercutting the prices of their services to levels that aren't sustainable for other companies to compete.
Difficult to compete with free on a large scale, you can only compete on niche audiences at that point. Gmail feels like a good example here that effectively drove out most of the other competition's relatively limited free tiers for personal users, leaving only larger businesses and privacy-oriented individuals to continue to pay for email.
Fast forward a decade later and apple, google and amazon bundle a crazy amount of unrelated services into their platforms without the regulators raising an eyebrow...