Supreme Court rules antitrust lawsuit against Apple can proceed
wired.com
wired.com
(That was the posted URL, but it's usually best to find the highest-quality popular article on a story and then include a link to the "paper" in the thread.
If anyone finds a better URL we can change it again—I just Googled until I found something that wasn't too annoying.)
https://www.scotusblog.com/2019/05/opinion-analysis-divided-...
SCOTUS holds that Apple can be sued for alleged monopoly of the Apple App Store. It does not decide whether or not this alleged monopoly exist.
Interestingly, it's a 5-4 decision, with Kavanaugh writing the decision, joined by the 4 liberal justices. Probably the most unexpected alignment of the current term!
It’s hard to swallow, but we need a third constitutional convention because this stuff is wrecked in the us.
https://en.wikipedia.org/wiki/Brett_Kavanaugh_Supreme_Court_...
What is this based on? Everything I've read up to today, even ignoring the confirmation events, has indicated that Kavanaugh is not a desirable choice for those on the left side of the political spectrum.
https://fivethirtyeight.com/features/how-conservative-is-bre...
As of last week, Rasmussen (a conservative polling firm) was sampling support for impeachment of Kavanaugh.
It's possible that Kavanaugh is completely ignoring the topic, and has dedicated himself to the high-minded topic of jurisprudence. It's also possible that he is aware of such polling and is building support should the winds change.
No he wasn’t. He was considered a partisan hack at best and was less popular than most previously confirmed justices.
He did get approval from the Amy Chuas and Neal Katyals and Akhil Amars but that says more about elite Ivy League in-groups than anything else.
[1] https://www.washingtonpost.com/opinions/we-were-brett-kavana...
Under previous precedent (Illinois Brick), only app developers would have standing to sue, and that is what apple argued should happen here.
"liable for the monopolistic effects" != standing. Standing is literally about "who has the right to sue at all".
Not whether they are liable or not. That comes later.
It's a very healthy precedent for app stores, regardless.
Under current US law multiple parties may not sue for the same damage. But at this point of time it is not decided whether the damages sustained by consumers in this lawsuit would be the same damages that app developers could sue for. It is entirely possible that Apple has swindled BOTH.
Either customers have their prices artificially increased, at which point app developers don't have damages as they're getting the money from customers, or else app developers are keeping prices low and taking the damage themselves, at which point customers aren't harmed.
It's just like a sales tax, who does it come from, the consumer or the retailer? It really doesn't matter, the effect is the same.
The only problem is if it is accounted for twice. If it adds $10 to a transaction, you can't say both the consumer and developer are each harmed by $10. Better to say each are harmed by $5.
A monopoly has structural implications which could disadvantage both customers and developers in ways that go beyond paying x% Apple Tax on each sale.
For example - opportunity costs for both developers and customers, lock-in costs, costs to competitors who might have been able to operate a related market, specific losses for specific developers based on arbitrary, capricious, or self-serving app store exclusions, and so on.
None of this has been proven yet, all of it is debatable, and it could all be included in potential arguments.
This is bad news for Apple - not just because any judgement could be worth tens of billions, but because of potential bad PR and brand damage, which may happen however the final judgement goes. And also because of the distraction from more constructive goals.
"Market definition is least useful when market shares would not be strongly probative of market power or anticompetitive effect, while direct evidence as to market power or anticompetitive effect is available and convincing." Apple's control of the App Store has a direct anticompetitive effect in the secondary market for iOS apps. This is pretty clear from the fact that Apple explicitly prohibits some apps that compete with its own. The interesting question is whether the plaintiffs will succeed in proving that Apple's conduct is illegal, under the prevailing interpretation of the US antitrust laws.
[1]: Market definition: an analytical overview (2007). https://digitalcommons.wcl.american.edu/cgi/viewcontent.cgi?...
I wouldn't say UPPAbaby strollers are their own market, but I would say UPPAbaby stroller accessories are their own market, at least if they have and act on a legal way to prevent all others from making and selling accessories that interact with their strollers.
Then again higher prices usually leads to less demand, hurting the devs even more (who will have to either eat the losses, or increase prices even more; goto 1). Apple made it so, so it's hurting the developers.
So Apple is hurting both, customers and developers.
But are app customers also Apple customers? Well, customers give a ton of money to Apple directly. It is comparable to a brick and mortar store where the customer does not actually pay the store, but the landlord of real estate in which the store is housed, who then keeps 30% and kicks over the rest to the actual store owner. And then the landlord claims it has no relationship whatsoever with those customers. Sounds ridiculous to me. Imagine credit card companies said they will no longer do any fraud prevention let alone fraud compensation because because all the money exchanged it between the customer and the vendor (or fraudster).
But it even goes further than this: said hypothetical brick and mortar store is in a company town, so all estate in the town is owned by the same landlord (the company in "company town"). Neither the store owner nor the customers have alternatives to do business in that town without the landlord's involvement. "But you can always move" says the landlord (i.e buy a non-iPhone as a customers and switch to another platform such as Android as a developer)...
Now the question is whether the court will find Apple is abusing their monopoly on "iOS App Stores" or if they are well within their right, because they do not actually have a monopoly as there is more than just iPhones and their App Store in the market.
Let's say you burn down a concert hall _with the intention to prevent the concert_. Then you have two different kinds of damages:
- Destroyed Concert Hall => The owner of the hall suing you because you destroyed their property.
- Prevented Concert => The visitors (trying to) sue you for "preventing" the concert.
Sure, in case of the concert I would be surprised if the second case goes anywhere, but then the situation wrt. the app store is way more complex.
[1] https://www.politico.com/story/2018/12/10/supreme-court-plan...
Last year, every Supreme Court Justice agreed with every other justice most of the time, except Sotomayor/Alito (they agreed 49% of the time)[0].
That doesn't mean the disagreements aren't important.
Whether or not they actually do this is another question, but the incentive is still there even with a lifetime appointment.
The idea of Federalist Society “ideological purity” is also pretty amusing, considering that there is a large Never Trump contingency within the organization: https://www.huffpost.com/entry/george-conway-starts-anti-tru.... I’d wager there are a lot more pro-choice Federalist Society members than pro-life members of the American Constitution Society.
What you say may be a true statement, but it also selectively ignores the sexual assault accusations made by three women he has known. Whether or not you believe the accusations are true or false doesn't change the fact that they factor into his expectations as a judge.
[1] https://www.nytimes.com/2018/07/18/opinion/abortion-kavanaug...
They may have more conservative or liberal tendencies, but to think that that all Justices will vote the way that people want to pigeonhole them into is ridiculous.
I suppose it proves they aren't 100% (not 99.9999%....100%) bound to always make decisions precisely aligned with a political party.
But no reasonable person suggested that.
Not so! There are many decisions by Kavanaugh that "liberals" (it's weird to me that they're called than in the U.S.) will have trouble predicting the opinions of conservatives [0].
“Who was best able to pretend to be the other?
The results were clear and consistent. Moderates and conservatives were most accurate in their predictions, whether they were pretending to be liberals or conservatives. Liberals were the least accurate, especially those who described themselves as "very liberal." The biggest errors in the whole study came when liberals answered the care and fairness questions while pretending to be conservatives. When faced with statements such as "one of the worst things a person could do is hurt a defenseless animal" or "justice is the most important requirement for a society," liberals assumed that conservatives would disagree.”
And they're probably even worse at this now than they were in 2012, if the inanity of the mainstream moral caricatures is anything to go by.
His findings have also never been validated, even by other conservative scholars, and he refuses to provide the data from this study. (Also, the study was a survey given to people attending the Reagan Library during the work week, so a highly self-selective bunch...)
(Jonathan Haidt was a hero of one of my professors...until the scholarly issues with Haidt's research came to light.)
There is literally nothing else for these folks to strive for except being well regarded in the history books, so they can finally do what they regard as the best thing to do.
It's unfortunate but having a stalemate is the best course to eliminate rash changes to government when there is a lot of divisiveness.
It's an appointment, so they would only have to convince the president. Or you can prevent reappointment at all.
That's how the Senate used to work, with state legislatures "electing" the senators.
That was replaced a hundred years ago with direct election of senators.
The big difficult, however, is how to make sure that a hostile senate wouldn't just block all nominations (which is the new norm). Some people like Calabresi have suggested that the president and everyone in the senate would be denied all compensation (IIRC even from private parties) until the seat is filled. I don't think that's a workable idea though.
Most presidents are reelected to two terms, and so if judicial terms were offset from Presidential terms by a year, they'd have:
At 0 years, 0 justices they appointed.
At 1 year, 3 justices.
At 3 years, 6 justices.
At 5-8 years (and up until 1 year into the next term), all 9 justices.
So most President get to completely stack the court, the effects just don't last as long—the judiciary becomes another weathervane political branch of government, because the two of those was too few.
(And I don't even want to consider the consequences of all those short time justices looking to their post-Court career while sitting on the bench.)
Perhaps in the "old" days when Justices had the feelings you're attributing it might be true but now in the current political situation ideologues are who are sought out to appoint and they care only they're well regarded by their own political persuasion.
I'd be surprised to discover any alternatives to this constraint.
Why would they care about that? They already have the job for life. They don’t need to please their audience any more. They’re free to act on principle.
And beyond that, there's a more fundamental issue: people like this are chosen for these roles because of their fervent, polarized political beliefs. Their principles, if they have any, are either aligned with or overcome by the politics. Their willingness to listen to reason and step outside their bubble is limited, unless doing so lines up with their politics.
I certainly hope current SCOTUS justices have a solid grasp of history and what happened to the last SCOTUS justice who acted in a manner you're suggesting. And this is an institution that (also, as history would have it) does a pretty good job giving a wide berth to precedent.
> Are Supreme Court justices swayed by the political environment that surrounds them? Most people think "yes," and they point to the influence of the general public and the other branches of government on the Court. It is not that simple, however.
> As the eminent law and politics scholars Neal Devins and Lawrence Baum show in The Company They Keep, justices today are reacting far more to subtle social forces in their own elite legal world than to pressure from the other branches of government or mass public opinion. In particular, the authors draw from social psychology research to show why Justices are apt to follow the lead of the elite social networks that they are a part of.
Sometimes, having an old guy say "whoa, slow down! That's a bad idea" is a good idea.
It does have to be justified based on existing law and this is important. But often, existing law only talks about broad principles or is contradictory, and judges are expected to fill in the details. In the case of the U.S. Constitution, these "details" can be really huge gaps.
This is what an appeals court justice does and their check and balance role on the other two branches of govt.
It's strange that the idea that judges shouldn't decide by (future) popularity gets downvoted. At times I don't understand this community at all. Is that a "I believe that my opinion will rule supreme in 20 years, so judges should submit to it now and just ignore the constitution"-thing?
I'm sure plenty of people who voted Hitler thought they were in the right side of history until they suddenly weren't. That's the unfortunate part of politics, you have to build a system around not trusting people.
Or I don't know.. money, bribes, favoritism?
I think that the terms don't actually matter much. The real problem with SCOTUS is that it represents extreme concentration of political power in our system that doesn't have any direct checks on it. Then you have stare decisis, which makes it so much harder to overturn decisions - so even indirect checks are limited. That's why its lack of accountability (e.g. term limits) is such a big problem. It's also why it was inevitable for it to become more partisan over time - having a partisan majority on the court is basically the equivalent of having nukes, and once one side starts moving in that direction, the other will inevitably follow. And now we're at the point where many people vote for president solely on the basis of what kind of judges they will appoint - and it's not even an irrational approach.
So I think that it's better to make the court less powerful, such that those appointments are not quite so important. One particular idea that I had is to abandon simple majorities as the way to decide matters on the court, and run it more like a jury - basically, the only way to declare something to be definitely unconstitutional, or definitely constitutional, should be by unanimous decision, or perhaps a strong supermajority (say 7 out of 9?). If a panel of people who are specifically chosen as legal experts cannot agree what the Constitution means with respect to something, I think the most sensible interpretation is that it's ambiguous - but then going with a simple majority would be very wrong.
Instead, if the judges cannot agree, this should automatically trigger a constitutional amendment process. Basically, have them all write opinions explaining why they cannot agree with their opponents on the court, and what changes to the Constitution would be necessary before they can agree. Submit all those changes as proposals for ratification, using the normal process, except that only one can be ratified, and that automatically rejects the other changes. If one of the amendments is ratified, that resolves the issue unambiguously and with an explicit rule for future cases like that. If none get ratified, then the lower court decision stands, but it does not set a precedent - the constitutional question remains open, and can be challenged again.
I would expect this to result in more unanimous or supermajority decisions with less extreme and more narrow effects, because the judges would be more likely to try to hammer out a compromise to cross the threshold.
It isn't really. It's just the standard partisan split, albeit with one guy "crossing the floor". Such crossing is common but since most of the media is incapable of understanding anything but partisan point scoring, they portray the Justices as partisan hacks, which they are not.
Heck, they aren't even that good at tracking point-scores, since the most common score at SC United (states) is 9-0.
https://en.wikipedia.org/wiki/2018_term_opinions_of_the_Supr...
https://www.scotusblog.com/2019/05/opinion-analysis-divided-...
Basically in order from left to right numbered 1-9 the majority on this case were 1-4 and 6. So it's only one step away from being a fully partisan split.
>"they portray the Justices as partisan hacks"
I leave it up to others to decide whether scoring each justice on a left-to-right continuum is any more nuanced than this.
> Apple filed a petition for writ of certiorari to the Supreme Court in August 2017, posing the question "whether consumers may sue anyone who delivers goods to them for antitrust damages, even when they seek damages based on prices set by third parties who would be the immediate victims of the alleged offense". The Court agreed to hear the case in June 2018.[8] Oral arguments were held on November 26.[9] [10] Court observers stated that the four liberal Justices were joined by three of the conservative ones, Justices Alito, Gorsuch, and Kavanaugh, as to side with consumers on the question of standing.[11] Justice Sonia Sotomayor stated that Apple's practice creates a closed loop that impacts the price paid by consumers.[12] Justice Neil Gorsuch considered that the prior decision from Illinois Brick may need to be overturned at the federal level, as at least 30 states have rejected the Illinois Brick doctrine.[12]
> The Court issued its 5-4 decision on May 13, 2019, affirming the Ninth Circuit's decision that consumers did have standing under Illinois Brick to sue Apple for antitrust practices. Justice Bret Kavanaugh, writing for the majority, stated that under the test of Illinois Brick, consumers were directly affected by Apple's fee and were not secondary purchasers, that consumers could sue Apple directly since it was Apple's fee that affected the prices of the apps, and that while the structure for any damages that consumers may win in the continuing suit may be complicated, this is not a factor to determine the standing of the suit. Kavanaugh was joined by Justices Ginsburg, Breyer, Sotomayor, and Kagan. The decision remanded the class-action case to continue in lower courts, though did not rule on any of the antitrust factors otherwise at the center of the case.
3/3 of those are true for some digital products like amazon kindle books even where you buy from amazon, not apple.
Or put another way, those are therefor clearly not the correct questions to be asking.
They are the final word, so they must get it right. Thus they want lots of other lawyers and judges to spend time coming up with all arguments and working out all angles. The worst possible thing would be for them to issue a final ruling, only to realize they are wrong because of some line of reasoning nobody had thought of.
In short, by taking 8 years, many smart people have spent 8 years thinking about the issue. There is a good chance that nobody will think of a different argument that is compelling.
Unfortunately law is not math. There are no fundamental truths to start from. It is a matter of conflicting opinions. We will never be sure that they are right or wrong, but at least they carefully considered their decision trying to get it right.
Macbook owners with bad keyboards are probably looking at 1 - 2 decades before their settlement checks arrive!
Instead of an Apple device, say you’re using a Google-manufactured Android device (something-or-other), and have installed a third-party App Store on it. But that third-party App Store turns around and uses Google Pay as its payment processor.
All the same qualifications still apply: you essentially used a “Google POS device” (your phone), were routed through Google payment processing, and the results were deployed to a Google device (your phone again.)
But from the perspective of the seller, you were just using an arbitrary Android device to run their App Store on; and Google, to them, is just the payment-processor they chose to use (probably because it’s conveniently integrated on Android devices) but they could have just-as-well used PayPal or Stripe.
Is this third-party App Store—in this particular case—legally “Google?” Even though, in other cases, where people are using other non-Google Android devices to access the store, or maybe selecting a different payment-processor option at checkout, they definitely aren’t legally Google? I would say “obviously no.” Those apps were legally sold by the third-party App Store. Google was just a payment processor there. (Payment processors still also have legal responsibilities regarding the transaction, but they’re different than those of the seller.)
And if that’s true, then what’s the difference between a third-party App Store that you installed as its own app, and a “third-party App Store” that is a section of the Apple App Store app, e.g. a Microsoft section or Adobe section? Isn’t that the same as, say, buying from a physical Microsoft store in an Apple-owned shopping mall?
And if that’s true, then where’s the line between that and “each app you purchase is purchased from its own little stall in this digital mall, which is owned and operated by the software author”? Is there one?
I feel like this is something that’s unclear enough that you could spent eight years arguing the various precedents behind deciding either way.
To use your analogy, the line is if someone can set up their own shop outside the mall. As a consumer, if I have no way to avoid purchasing from a store inside a single mall then I'm effectively purchasing from the mall itself.
At least in my opinion. I'm not a lawyer.
You can only buy the new Jordan's from X stores, only available on PS4, exclusively at Target, etc.
And places that sell things are well within their right to choose their vendors unless you want to demand that the BMV dealership be leglly required to sell Ford trucks if Ford desired.
Put exclusivity and vendor selection together and you have a digital app store. Apple doesn't even pretend to be open -- they're a product with licensed 3rd party integrations.
On what grounds should they be compelled to be anything else?
https://www.businessjustice.com/is-exclusive-dealing-illegal...
https://www.ftc.gov/tips-advice/competition-guidance/guide-a...
https://www.theantitrustattorney.com/exclusive-dealing-agree...
That's why this is going to the Supreme Court - we all recognize that the App Store uses exclusive dealing, but it's non-obvious whether or not it's lawful.
>And places that sell things are well within their right to choose their vendors unless you want to demand that the BMV dealership be leglly required to sell Ford trucks if Ford desired.
Not sure what that has to do with anything. Apple's point was that they aren't selling anything - therefore appstore customers wouldn't have standing to bring an antitrust against them.
When this matters is when you have a dominant market position. Target doesn't have to sell Nike because you can reasonably buy them at Walmart. Nike doesn't have to sell to Target because Target can reasonably buy from Reebok, which is a reasonable substitute.
The issue here is that there is no reasonable substitute for Apple's App Store, because they have made it that way on purpose. You can't sell your iOS app through Walmart or Google Play or Amazon. You can't download it from the developer's website. And you can't run Android apps on iOS devices. So Apple has a dominant position in iOS app distribution, and with that comes the antitrust restrictions that don't apply to competitive markets.
Is iOS app distribution a thing that can be dominated though, legally? In your example I get how stores and shoes are both things that can be dominated but what category of thing does iOS app distribution fall into? Is it still in the same category if one deletes iOS and just calls it in "app store"? Would Apple still dominate apps?
It's all confusing to me. I'm asking sincerely because I honestly don't know.
So for example, is "Clorox bleach" its own market, separate from just "bleach"? Well, no. Clorox bleach is chemically identical to any other bleach. You could switch one for the other and not even be able to tell the difference.
On the other hand, is "broadband internet service in Pittsburgh" a different market than just "broadband internet service"? It kind of is. There may be a dozen different ISPs in varying cities across the country, but the prerequisite to using one that doesn't offer service in your city is to sell your house and move somewhere else. That doesn't make it a particularly viable substitute.
So then is "iOS app store" a different market than just "app store"? Well, what do you have to do to substitute one for the other? Is it reasonable to have to exchange your $600 phone, or buy a second $600 phone, in order to buy a $1 app from a different store?
You would still have to buy a new $600 phone to use that $1 app irrespective of whether Apple had multiple stores or not. iOS is a platform and apps can only work on that platform.
You need a phone to use an app in the same way that you need a piece of real estate to get internet service. That doesn't mean Cox in Omaha is a competitor to Comcast in Pittsburgh, because people aren't reasonably going to make a choice with hundreds of times greater implications just in order to do that.
> iOS is a platform and apps can only work on that platform.
You're only providing reasons that it is a separate market from apps on other platforms.
No different to Nintendo, PS4 stores etc.
This decision makes clear that legal weasels lost.
Understanding next steps requires constructing the argument correctly. One could ask why should Apple be forced to open "their" phone for example. This too would be weasel words because nobody on earth is asking Apple to open the phones in their pockets.
A more reasonable person might ask that Apple allow owners to control THEIR OWN PHONES.
You ask erroneously if BMW should have to stock ford Trucks. This isn't remotely analogous. This is asking if BMW owners ought to have to go to a BMW gas station, seek repairs only at BMW owned service stations. Listen to BWM approved music on BMW approved stereos.
Fundamentally using control of a users device after sale to maximize future revenue is inappropriate and the only remedy is to give users full control.
If we decide that designing a toaster to only accept $vendor's bread is illegal that's all well and good but the justification for such a law will be that it's monopolistic behavior, not that the end user owns the toaster.
https://en.m.wikipedia.org/wiki/Possession_is_nine-tenths_of...
Without a compelling, court-tested, legal precedent for Apple to claim "you don't own that iPhone in your hand", the assumption is that you do, regardless of what the EULA might say. EULAs that are contrary to standing law are not valid.
The fact that one can buy iPhones on the secondary market lends credence to notion that consumers own their devices.
And given that Atari and Nintendo both tried, and failed, to make similar arguments against 3rd party software manufacturers, I think it's pretty clear which way the courts would go, if it were to ever be tested.
We don't live in a society where corporations get to make up whatever rules they want, as long as they can convince someone to sign on the dotted line.
Say I sell you a car outright. I decide to push an update that bricks the car and pops up a window on the in dash entertainment with an offer to re enable it for a monthly fee or an offer to buy it back for pennies on the dollar.
I think we can agree that I basically just stole your car and offered to rent it to you.
My ability to control the heart of your device means we can either
- spend the next century litigating in what fashion and circumstances I am and am not allowed to fuck you and to what degree while hoping that the side with the deepest pockets doesn't win most rounds
- pretend that the dysfunctional hand of the free market is capable of solving a complex societal problem this time
- admit that the privileges and rights that we already acknowledge and value implicitly must include the right to access and modify the software included or they can literally be taken away wholly or in part for the increasing percentage of things that include a chip.
I think this is true implicitly but am entirely open on the idea of spelling this out explicitly in terms of additional laws and lawsuits.
Are you really on the side of the weasels?
I actually think the option 1 world would actually be better than deriving rights from device ownership because then it would be super easy to get around by renting devices or by using SaaS services; consumer protection litigation protects you against various types of fucking in all cases.
I don't really want to live in a world where companies are allowed to be maximally evil with their software but it's okay because you are technically allowed to replace it with your own. All this would do is allow a tiny tiny fraction of the population to enjoy their devices while everyone else would be fucked.
I'm on the side of "I would personally love if companies were required to allow/support device modification but the justification for such a thing is weak and wouldn't actually protect or solve problems for consumers."
The question is whether Apple should make it easy for you to do this. And there is no legal basis for that.
It does not protect your oem from competition.
Pretending that this isn't extraordinary is a very questionable tactic that Apple has handled in an innovative fashion.
And it's not extraordinary at all. These days any device with apps/games has their own store e.g. Nintendo, PS, XBox, Fitbit, Thermomix etc.
With iOS not only you can't buy from a third party, you can't even install an app that hasn't been signed by Apple.
Either way, end users have the right to sue Apple here, not just the developers.
Furthermore, repair applies to the hardware of the device, not the software ecosystem. You have to make a separate, very different argument for software as it is more malleable and less restricted than hardware components are.
So you are arguing that an iPhone is a very sophisticated calculator and not a general purpose computer?
I don't think you can argue platform monopoly here any more than you could argue, say, that Amazon has a monopoly on AWS-specific services. Since an app developer can choose which platform to use with approximate levels of parity between those platforms and a few distinctive services per platform, it is my opinion that the 'platform monopoly' argument is rendered void. This argument is only weakened in recent years as feature parity increases between Android and Apple ecosystems.
AWS is also a platform but they don't lock customers into only using AWS or AWS-licensed services. This is almost as preposterous as saying, "Someone bought it, so it's not anti-competitive".
Again, to make your case, you must argue that Apple products are categorically different from any other device available on market and that they are preventing new entrants from competing with it, which is so blatantly not the case here.
Secondly, that MS case is a different matter than the one cited here, and does not map well onto this case.
Thirdly, the major precedent of the original ruling appears to have been overturned shortly after. This damages the argument somewhat. The ruling seems scurrilous in the first place, in my opinion.
2. My point is not to compare the two cases, legally speaking, but you argued that "consumers are well aware of those constraints on purchase". Well, consumers were well aware of the limitations of Windows and that didn't change the fact that Microsoft was charged with unlawful monopolization.
3. Sorry, I'm not sure what you are referring to here.
Considering Apple has been pushing the "iPad is a PC replacement," it's a fairly easy case to make with regard to iOS and the App store. There is a lot Apple has done to push the idea that the "users" are in control of their information and that "there is an app for that." Couple that with the history of people being able to customize their phones in certain ways, it's not a case that is that hard to make, especially when compared to contemporary phones.
Would you?
My feelings and desires affect how I vote, and voting affects legislation as well as such things as who gets appointed to the Supreme Court. (and given our legal system, courts determine law as much as legislators do)
I think it is awful that manufacturers of devices have that level of control of who can sell apps to run on them, and I certainly hope enough other people do to affect law. I'm old enough to remember when you could only buy a (landline) phone through Ma Bell, and luckily the law -- via courts of course -- stopped that eventually.
This is very similar, but in my opinion the current issue is a good bit worse that AT&Ts monopoly.
As a consumer, I can be disgruntled that my chosen platform is not as flexible as I wish. I can either throw a fit and lobby congress to force Apple to open its gates, or wait a year or two for my phone to slow down and pick up an Android device. In fact, this kind of migration occurs in both directions on a regular basis. Only religious loyalists stick with a single ecosystem without examining the tradeoffs they're making, as a general rule.
Your purchasing decisions are not mutually exclusive with action from courts and legislators and voters and such. And, especially if you take into account that market theory as well as game theory tends to view individuals as rational agents pursuing self interest (1), a pure free market approach simply does not effectively curtail monopolistic and otherwise anti-competitive behavior of corporations.
[1] as a baseline, anyway.
Luckily courts take into accounts the barriers inherent in such things. If few enough people do such things because the difficulty of doing so makes them impractical for most people, they give appropriately low weight to such arguments.
If I make a device, you should not be able to force me to support your software running on it. That seems fundamental.
> [you] have installed a third-party App Store on it.
I believe that is more than "one little thing". Here is why: Plantiffs say that Apple's decision to be the sole source of apps for the iPhone is monopolisitc. In your scenario, the purchaser is buying apps from a third party, not affiliated with Google. So, no, a third party cannot be possibly "legally Google". Critically in your scenario, "you were just using an arbitrary Android device" and "Google, to them, is just the payment-processor they chose to use" and most critically "they could have just-as-well used PayPal or Stripe." So, I believe the facts of your case are very very far from the facts of the Apple case.
Hypothetical Google Case: - Third Party App Store - Multiple competing payment solution
Actual Apple Case: - Only one app store by order of manufacturer/OEM/OS Vendor - Only one payment processor (who is the app store)
In the scenario with Google, google is no more involved in the purchase than mastercard is in your purchase at Walmart.
In the scenario with Apple, the app developer is no more involved with your purchase than the book author is on Amazon (when you buy directly from Amazon). You purchase FROM APPLE.
The true motives of a corporation often come out in court.
Nobody's claimed that Apple believes that people buying their phones aren't their customers. Apple claimed (IIUC) that in this scenario, it's the app store vendors that are the customer of the app store. Which is a reasonably valid way to look at it.
And the court (correctly) said no.
So either Apple is misleading us when they say we are their customers or they are flat out lying to get out of a lawsuit. Can't have your cake and eat it too, mate.
Apple won on the standing point in the trial court, then lost on appeal to the circuit court, and chose to protract the preliminary litigation by running this failed appeal to the Supreme Court, at significant cost to its opponents. Perhaps in doing so, Apple achieved a public benefit by securing a Supreme Court decision that explains this contested part of the law on standing. But if the minority opinion had prevailed, Apple would have won a victory that deprived the courts of the opportunity to review the legality of its behaviour for a few more years.
I don't know enough about the decision-making process to say whether Apple's behaviour in running this litigation was ethical. My point is that Apple executives are morally responsible for it, even if it is perfectly legal.
Apple has two possible customers in this issue - the developers it provides distribution services to and the consumers that buy the apps. The point in question is which of these two customers has standing to sue on the basis of the specific harm in question. Under US law the answer cannot be both.
Also, please omit distracting dross like "get a life".
We detached this comment from https://news.ycombinator.com/item?id=19899824 and marked it off topic.
The debate in this case was all about whether the end user was Apple's customer (thus able to sue Apple directly) or the developer's customer.
I hate that they use federal money to subsidize their workforce' paychecks (non-living wages, supplemented by food stamps), but...they're great for the consumer.
In order to avoid this you just don't let people pay less than a minimum survivable hourly wage so they can't force the government to subsidize them.
In the absence of a minimum wage constraint, and all other things being equal, a change in government assistance is going to result in an opposite change in the market wage rate. This is just a statement of market mechanisms. When the labor pool has access to higher benefits, it is easier for an employer to find someone willing to work for a little less than before (and vice versa).
The two situations are somewhat different though. In the first case you are talking about an individual moving themselves into a different market (unskilled/untrained labor to improved skills/experience, for example). Ensuring that this progression isn't penalized via overly aggressive reduction in benefits is a good thing irrespective of any minimum wage constraints. In the second case you are talking about a global change to the market constraints for all participants.
So I was just responding to the parent to say that when the government changes its "formula" for benefits, it is entirely reasonable and expected for the market to find a new equilibrium. This isn't an example of Walmart or any other employer "using federal money to subsidize their workforce". This is just the market doing what it does.
As for your minimum wage concerns, a minimum wage prices some people out of the labor market entirely. Someone with minimal skills or experience won't be able to bring enough value to an employer to cover the minimum wage. I think it would be much better to get rid of minimum wage rules and adjust benefits accordingly. It makes more sense for someone with minimal skills to have a job (and thus a path towards more skills) and some additional public assistance than to have no job at all and be 100% dependent on public assistance.
In a fictional world without minimum wage or assistance a low wage employee can't afford to work for less than would be required to live for very long so one would expect the wage to float to somewhere in that neighborhood. Lets completely arbitrarily set that value at $10 an hour without worrying what the actual value would be. Imagine that the company expects to create $15 of value on average for each $10 paid out.
Note that in this universe even without a minimum wage the wage still can't float arbitrarily low because people can't live and certain people who truly don't create the needed value are STILL pushed out of the labor market by more employable people. Without any benefits they just die.
Now lets add welfare! People with enough to eat, free medical, cheap rent can indeed afford to work for less even if the company is still generating the same $15 net on each labor hour. Say the person effectively gets $7 an hour in benefits and companies average out to pay $5.
This means that in the original arrangement customers paid out $15 and the employee collected $10 the employer $5.
In the new situation the customer paid out $15, society kicked in $7, and the employee collected $12, the employer collected $10.
One could have achieved the same societal benefit by giving the employees $2.
Nations that provide sizable benefits to poor are obliged to set a minimum wage to avoid the situation where the social safety net represents a net transfer of wealth to low end employers by allowing employees to offer below living wages.
I'm not claiming I have a good solution, just pointing out the side effects of the high minimum wage (higher that the otherwise natural market clearing price).
They are only great at the point of purchase. They make it harder to run a competing business, they create a tax burden by paying low wages, they distort local markets and cause local economies to suffer, they benefit foreign suppliers of products produced at wages and in conditions below American legal minimums (at the expense of American companies that compete with them, which affects American workers at those companies).
That said, I don't see how the App Store is a monopoly. How would "monopoly" be defined to even formulate a case against Apple?
* - notwithstanding that many apps want you to create an account on their systems - Apple does indeed allow this.
I think the argument would be fairly straightforward: the App Store is the exclusive avenue to distribute paid applications to iPhone users. In so doing, it acts as a single seller of applications to consumers and a single buyer of applications from developers, and its arbitrarily-set fees are incorporated into prices.
The fine parsing comes in whether "iPhone users" are a sufficiently distinct market to effectively make the App Store a monopoly, and I think reasonable people could have different opinions here.
So, they're certainly a monopoly in that market today and possibly in the general market in the near future. I have also read that you don't even need to have a higher than 50% market share to be considered a monopoly. You simply need to affect the entire market, which Apple certainly does with their 45% general market share in the US.
The overwhelming trend is towards Apple losing share as Chinese phone manufacturers start to increasingly capture the middle market.
If my product is being sold in any retail store e.g. Best Buy then I typically don't have access to the customer's contact details that may be collected at the checkout. It's up to me to capture that information when a user uses my product.
Yes, Apple has a monopoly over iPhones. They do have a monopoly over phones.
But Apple is the one that's skimming all the revenue and making huge profits on their forced 30% cut. Apparently they made $12 billion just from the app store in Q3 2018. How is it surprising that a lot of developers are having a hard time making money?
I’d refer you to this Joel Spolsky article which explains it: https://www.joelonsoftware.com/2002/06/12/strategy-letter-v/
You see this strategy everywhere in tech. It’s not by accident.
Because the issue is the price of app distribution, i.e. the part of the price Apple gets, not the part of the price the developer gets. The fact that the developers are getting squeezed is what you expect to happen when some other part of the supply chain is monopolized, because more of the revenue goes to the monopoly and less to the developer.
> Before the App Store, software licenses for Mac software could be priced in the $40-$70 range for software that might have had feature parity with what you get in a $3-$10 app on iOS these days.
The desktop and mobile markets are very different. For one thing, the people paying for desktop apps are primarily businesses whereas iOS apps are sold primarily to individuals. The mobile market is also bigger, which means more customers to amortize costs over which should result in lower prices.
Compare the price of iOS apps to Android apps. They're not lower and if anything are higher.
When Apple want to sabotage universal adoption of certain technology (such as DASH for video streaming), they can avoid implementing needed components on the client side in their engine, forcing everyone who wants to target iOS (a sizable chunk of the Web market) to support their own technology instead of only something else.
So control over the browser engines in the store gives them anti-competitive control which extends way beyond it. It's surprising no one challenged that garbage until now.
https://www.oyez.org/cases/2018/17-204
A non-PDF version of the opinions can be found through that link or at https://supreme.justia.com/cases/federal/us/587/17-204/#tab-... (which is at that link)
+ Rejected challenges to NSA authority
+ Rejected workers rights to picket
+ Opinionated diverting public funds to religion schools
+ Rejected meat labeling requirements
+ Repeatedly restricted the EPA
https://www.politico.com/story/2018/07/09/brett-kavanaugh-tr...
Kavanaugh is highly anti-consumer. That he's sided with consumers in this case is very surprising to me.
I think it's a bit disingenuous to assume partisanship on the basis of a <1 year voting record. That's a serious charge to levy against a judge, as it implies he/she is violating his/her judicial oath by failing to "administer justice without respect to persons, and do equal right to the poor and to the rich".
It's rather unfortunate that courts have become the foci of partisan politics. It reflect the reality that Congress has been effectively abdicating their duty as the ones who must write the law.
The road to hell is paved with good intentions.
I strongly agree.
To focus on preferred outcomes rather than strong first principles is a good intention on the path to hell.
Strong first principles are great when we're arguing philosophy but it's pretty bad when we're preventing millions from exercising a fundamental right. The soldier who carries out atrocities because he believes in the duty of following orders is no less guilty of the atrocity.
This doesn't mean that the end justifies the means but it means that we must judge our course of action and the actions of others with their full weight, not only intention or goal but the direct cost too.
This one is pro-consumer, not anti consumer.
Key paragraph from opinion.
Do you have a source for this? Reading the decision here it seems like both the developers and the consumers have standing to sue, although for slightly different reasons [0].
[0] from the decision: "Here, some downstream iPhone consumers have sued Apple on a monopoly theory. And it could be that some upstream app developers will also sue Apple on a monopsony theory. In this instance, the two suits would rely on fundamentally different theories of harm and would not assert dueling claims to a “common fund,” as that term was used in Illinois Brick. The consumers seek damages based on the difference between the price they paid and the competitive price. The app developers would seek lost profits that they could have earned in a competitive retail market. Illinois Brick does not bar either category of suit."
How the court defines the market will decide whether you win or lose in almost all cases.
Here, this is a case about the app store. The market was defined as consumers of apple phones who use the app store.
In that market, apple is clearly a monopolist.
In some larger or smaller market, they may not be.
In this case I think it is going to be a hard sell to demonstrate an anti-trust issue, but "A vertical arrangement may violate the antitrust laws, however, if it reduces competition among firms at the same level (say among retailers or among wholesalers) or prevents new firms from entering the market."[1]
I think claiming that Apple has some kind of monopoly on the smartphone market is a nonstarter, since they are well below 50% of the smartphone market in every country, including the US.
It's not clear that Apple's policies reduce competition among firms at the application creator level. However, Apples policies clearly do prevent new firms from entering the market. For example, Apple has explicit rules forbidding entire classes of apps that it believes compete with it's own services.
I think you might be able to make the following case, although the lack of an actual monopoly makes it more difficult (but not impossible) to frame it as an anti-trust issue: The levels of this vertical integration are 1. selling phone hardware 2. providing phone operating systems 3. reselling of applications (app stores) 4. production and sale of applications (app developers). Apple doesn't allow competing app stores at all on the hardware it sells, so it's clearly using it's control of a large segment of the smartphone hardware selling market in a way that discourages competition in the application store market.
[1] https://www.ftc.gov/tips-advice/competition-guidance/guide-a...
The only option is to Jailbreak your own device. Yes your own device not Apples.
The question is if the way Apple controlled the market fell afoul of legal standards in a way that effected makers and users. If this is deemed so it would be true regardless of what percentage of users would install apps from a third party store.
The only kind of place I've seen prices less than MSRP is discount stores like cdkeys. For example, try to find microsoft windows that costs less than MSRP -- on all stores, first party and third party, the price will be the same.
So, lack of 30% markup is very unlikely to reduce the final asking price by 30%.
Or apps that get denied from the Apple App Store. Emulators come to mind, but also the recent Steam Link app is still not allowed on the App Store.
For a department store, it is very clear that you are buying from the department store. They own the physical goods at the time of sale.
For an App Store, most people would agree that the Store does not own the digital goods they are selling to consumers.
So, while a superficially similar transaction occurs, both the nature of digital goods and the difference between goods and services makes for pretty vast differences under the surface.
Just to bit pick and it doesn't really change your point, but I thought a lot of places basically do consignment now for their vendors and don't own much of their stock?
The difference is that big box retailers won't force you to only make purchases with their credit cards or other vertical integration limitations.
Or Sony, because they are the only vendor of Playstation games?
Yes, though I have no idea if you would win. This decision doesn't decide that Apple has a monopoly or that Apple is abusing a monopoly. It decides that the end-user purchasers of apps on the app store are Apple's customers, not customers of the app developer only. It follows that they are entitled to raise a suit that Apple is abusing monopoly powers in a way that harms them. Whether Apple has a monopoly, and if so, whether Apple is abusing that monopoly both remain to be decided. (My guess is neither.)
[1] https://arstechnica.com/gadgets/2019/01/facebook-and-google-...
0: I'm assuming Ford hasn't added some sort of DRM to their vehicles; if they have, then they have a monopoly on maintenance for those vehicles and should be penalized accordingly.
1: They can sell you jailbroken-iPhone apps, but you could also get maintenance on a DRMed truck once you ripped out and replaced all the computer systems, so that's not very relevant.
https://www.washingtonpost.com/technology/2018/11/26/iphone-...
> iPhone users can sue Apple over “monopolistic” prices in the iOS App Store, prices that a group of consumers allege are driven higher by the commissions Apple charges independent appmakers.
Some providers like Netflix and Spotify are deliberately not offering the option to subscribe through the iOS app to avoid paying the Apple tax currently at 30%, and for subscriptions I believe the cut is reduced if the user is subscribed for a certain period of time.
This was not unexpected but precedent was on Apple's side.
Apple was basically playing the "whoa, we don't sell apps, we just make an app store. They buy apps from the developers" card.
This is technically true.
In that situation, Illinois Brick/etc would normally say consumers cannot sue you, only app developers can. Most of the reasoning in those decisions is around how hard it is to calculate damages, etc.
However, the court refused to buy it.
The abstract they give is pretty easy to understand: "Second, Apple’s theory is not persuasive economically or legally. It would draw an arbitrary and unprincipled line among retailers based on their financial arrangements with their manufacturers or suppliers. And it would permit a consumer to sue a monopolistic retailer when the retailer set the retail price by marking up the price it had paid the manufacturer or supplier for the good or service but not when the manufacturer or supplier set the retail price and the retailer took a commission on each sale.
Third, Apple’s theory would provide a roadmap for monopolistic retailers to structure transactions with manufacturers or suppliers so as to evade antitrust claims by consumers and thereby thwart effective antitrust enforcement. "
How is it technically true? Apple collects the payment and takes a cut. Yes, the developer gets to set their prices, but I don't see this as any different to manufacturers of products setting their cost price for retailers, who then go and apply their markup to it.
(this is also what the court found)
Also keep in mind that various kinds of price fixing by manufacturers (IE forcing retailers to sell at a certain price) are also subject to antitrust arguments. It's simply no longer "per-se" illegal. For a long time, the precedent was that various forms of price fixing and price maintenance were illegal on their face. YOu didn't have to prove it hurt anyone, only that it existed.
They are now subject to rule of reason analysis (basically, balancing of harms).
The reason such lawsuits are uncommon is not because the price fixing is okay, but because it is incredibly expensive and time consuming to litigate for a very uncertain outcome :)
To purchase a product I go to an Apple owned-and-operated store, give Apple my credit card, and receive an item that's been packaged and signed by Apple tools from an Apple server.
Apple's claim is in large part that the transaction is not between them and the consumer, but they are basically just off to the side somewhere. Again, in historical precedent like Illinois Brick, that is most certainly correct, and you can bet money the app store was structured in precisely the way it was to try to fall under that precedent.
However, that illusion of being off to the side is clearly false from a practical perspective, as you have shown, and in the end, that is what lost them the case.
Apple took the precedent to the logical extreme, and when you do that, you run the risk of the supreme court saying "yeah, actually, that goes against what we were trying to accomplish in the first place be". Which they did here: in the abstract, they actually say "yeah, we get it, but that that makes no sense in practice".
(Hopefully lyft/uber/etc are paying attention, because they seem to expect the courts to let them take their "we're just app makers" argument to the logical extreme in a different legal context)
Well, one thing is certain, and that is that Spotify will be happy with this as it may end up making their competition against Apple Music a bit easier.
Technically? It doesn't look like it. Apple decides what is sold, how it is sold, IF it is sold, and what the thing sold may do. It will decide how to take payment, Apple takes payment and pays something else to the app developer after 30% and more. Apple decides when the developer gets money. Apple may retroactively cancel the sale within 90 days. Since the developer is paid within 60 days, it will do so.
Apple is what is bills the customer and Apple(or one of Apple's many subsidiaries) is who pays the developer.
Does the developer know who buys the things? No. They just give an infinite supply of widgets to Apple who sells them and gives the developer a cut.
A reference to the American board game "Monopoly" and its "Get out of jail free" card. https://en.wikipedia.org/wiki/Monopoly_(game)
Now this case can proceed, then what stops consumers or sellers from suing Amazon, eBay or Google Express? They are a monopoly in their own domain.
Amazon, for example, charges 15% for sellers fulfilled for every sale. The fee is even higher if the seller elects to be filled by Amazon.
https://www.oyez.org/cases/2018/17-204
Link to Oral Argument Audio:
https://apps.oyez.org/player/#/roberts10/oral_argument_audio...
Antitrust lawsuits are brought by the government itself, not consumers.
For example, Federal Trade Commission v. Qualcomm Incorporated or United States vs. Microsoft Corporation.
They all implicitly agree that buyers have standing to sue sellers who illegally use a monopoly to overcharge the buyer.
But - somehow - that is no longer true if the seller also overcharges their supplier. Then the dissent says that any harm is "passed-through" the supplier.
Huh? The buyer isn't buying from the supplier, they're buying from the seller. If any harm passes from the seller to a supplier, then the only way for it to get back to the buyer is for it to then flow back through the seller to the buyer. AKA the overcharge is still coming from the seller.
I believe that (barring a hacked system) there is no side loading of games that aren't Sony-blessed.
I'm not. There is a pretty big cloud of illegitimacy over his head. He needs allies in case the next administration encourages some of the proposed inquiries to proceed.
Sorry, but you have to take the 30% hit, or you can't mention your website, and you certainly can't put in a third party payment system. You'll get booted fast, or, won't even make it in the door when they review your app.
That's why you can watch videos in the amazon prime video app, but you can't rent or buy movies there. You need to rent or buy the video on Amazon.com, then you can watch on the amazon video app.