Market share in this case is only one piece of the puzzle. Even if they make up 22% of market share (globally, it's 60% in the US), iOS usually makes it up in number of paying users.
Apparently the walled garden is hugely attractive to the best customers.
It’s almost like calling Tesla a monopoly power in the automotive industry because they have >90% of the luxury EV market: you’ve already sub-divided the market so many times that the idea is weakened.
In reality, most people use Android, and even in the US about half of them still use Android.
If iOS is a monopoly then so is Sony, Microsoft, and Nintendo. The dynamics of that market are quite similar.
Microsoft had well over a 95% marketshare during their antitrust saga.
Doing stuff like blocking competitors from your platform, blacklisting people who do business with your competition would be examples of not competing normally.
What Apple is doing is more subtle though - in general they are not using their position against Google, they are using it to force arbitrary conditions on companies seeking to do business on iOS and increase their own profits, to the detriment of end users.
I believe the ultimate test for market abuse in the US is considered something like business practices that harm other companies without benefit to the end user. If the end user gets lower prices or better value Thanks to your practices, the free market is achieving its purpose. If they are not, but one company is getting better profits, than the market is being manipulated. As a side note, this is not the same test as in the EU for example, which makes price dumping (selling below cost of production) usually ok in the US, but not in the EU.
Apple hasn’t blocked competitors. For every service that Apple charges money for, there is a competitor.
Every platform owner and reseller forces conditions on third parties - console makers, set top box sellers, physical retail stores, etc.
If what you said was any kind of reality, Apple or any other company could be accused of being a “monopoly” if they had any type of margins. Saying Apple is a monopoly because users choose to spend more is about like saying Nike is a monopoly when other shoes are cheaper.
It is not anti competitive to have a differentiator where users choose to spend more on your product than competitors.
On the other hand, if the game maker needs funding and the platform owner is willing to fund them, shouldn’t the platform owner get something?
Another example, Apple funding independent game makers for Apple Arcade means that games can come to iOS that don’t depend on loot boxes, selling consumables or ads. That also means Apple takes on the risk.
The main point is not that Apple is a monopoly on the smartphone market, the issue is the monopoly Apple has on distributing apps for the iOS platform.
When building an app access to all users is key to success. Apple artificially limits access to the users of their platform by having you jump through a dozen of hoops and an intransparent review process.
Although iOS only has a market share of around 20% (globally? more in the US), the iOS platform has a large enough audience and market size to be very relevant for investigations.
> It’s almost like calling Tesla a monopoly power in the automotive industry because they have >90% of the luxury EV market
It's really not. I can't think of a general comparison off the top of my head, but lets use Spotify and the Apple dispute as an example.
To keep the Tesla example, the situation would be more comparable if, let's say Volkswagen, would have to sell their EVs through Tesla for the north american market.
The question of whether the iOS app distribution market is, in fact, separate and valid antitrust market is not something that can simply be assumed.
This is known as a "wholly derivative aftermarket" (as the market for iOS apps would not exist independently of the market for iPhones), and US courts generally disallow antitrust aftermarkets to be defined in the context of a single brand's product unless specific criteria are met. [1]
One of the key criteria is whether or not the consumer knowingly and voluntarily agreed to the aftermarket restriction when they made their initial purchase. If they knew about the aftermarket restriction and could have bought an alternate product without such restrictions, but went ahead and bought the restricted product anyway, then the market power deriving from that restriction is not considered a valid basis for an antitrust claim.
In other words, if when consumers bought an iPhone, they knew they would be limited to installing apps from the App Store, and they went ahead and bought the iPhone anyway, it is rather unlikely that a US court would consider the "monopoly Apple has on distributing apps for the iOS platform" to be a valid antitrust market.
[1] The criteria are explained in Newcal Industries, Inc. v. IKON Office Solution (https://casetext.com/case/newcal-industries-v-ikon-office-so...). Most of the cases where single-brand aftermarkets were permitted by the court involve situations where the consumer did not know about the restriction at the time of purchase, because the company changed a policy or modified existing agreements after the purchase.
The thing to notice about this is that you're talking about the wrong market.
Suppose I want to use an unnecessarily specific product, like the 2015 Ford Focus SE Flex Fuel with 5-Speed manual transmission, and talk about the market for fuel for that vehicle. Well actually it can take regular 87 octane gasoline, which you can get at any gas station anywhere, so nobody has a monopoly on fuel for that vehicle, no matter how specific we get about the vehicle. It's totally irrelevant whether it has power windows or cruise control because they don't affect what kind of fuel you can put in it. We can specify any of those things and it doesn't help anybody to show a fuel monopoly unless the thing being specified is relevant, which most of those kind of details aren't.
Now we want to talk about apps and phones. If you have a "phone" -- the broad product definition you want to use -- then do you have competition for app stores? Now you've got a problem. You can't actually answer the question, because the answer actually does depend on what kind of phone you have. The details are relevant. That's how you know "phones" is too broad of a product definition -- it doesn't actually allow you to answer the question about app stores without being more specific about what kind of phone it is, because different phones use different app stores.
When we're talking about app stores, the relevant market is the set of customers that can use the same set of app stores as one another. And then you know it's a monopoly if the set has only one entry.
> If iOS is a monopoly then so is Sony, Microsoft, and Nintendo. The dynamics of that market are quite similar.
The strongest argument that this isn't the case is that it's common for people to buy multiple different consoles at once, so if the customer can't get a game on one console, they could still get the same game on another one because they actually own multiple consoles at the same time. I'm not sure if I actually buy this, because a lot of people don't actually own multiple consoles, and to that extent they do have a monopoly.
But for sure hardly anybody carries multiple brands of phone in their pocket.
Apple's argument, which I tend to agree with, is that the user does have a choice of app store, which they make by buying an iPhone instead of an Android phone (or a Xiaomi phone, or a Kindle, or whatever).
The reason I agree with this is that, for me, the App Store and how it's handled is one of the big draws of the iPhone; I've heard a lot fewer stories about malicious software, re-uploaded software with malware installed, software that walks you through the process of enabling sideloading or enabling adb connections so that you can install this one thing one time, all of which users might have to deal with without necessarily understanding the repercussions of what they're doing.
So once you've purchased an iPhone you don't have a choice of App Store, but you do make that choice, arguably, when you purchase your phone. The biggest argument against this is that if you've already invested a lot into apps on the App Store, then there's not a lot of option to switch app stores, but there is still a choice that users can make.
> The strongest argument that this isn't the case is that it's common for people to buy multiple different consoles at once, so if the customer can't get a game on one console, they could still get the same game on another one because they actually own multiple consoles at the same time.
I'm not sure this is actually the case for most people. I don't think the typical person is going to spend, for example, $600 on a Playstation 5, and then decide that they don't like how Sony handles their store so they go and buy an XBox Series X for another $600 so that they can get the best of both worlds, or get access to a different store with different policies.
The problem with this is that then you have to make the choice of app store together with the choice of the entire platform including the hardware and operating system and everything. Moreover, once you make the choice, it's hard to change because there are significant transition costs, even if the apps available in the stores change.
Suppose I bought an iPhone two months ago and today I want to install Fortnite. When I bought the iPhone it was available, but how does that help me now?
Or suppose I want an iPhone exclusively so that I'm not giving my data to Google and for no other reason. Then my choice of app store is being constrained by my choice of platforms -- basically the definition of an anti-competitive restraint.
> I'm not sure this is actually the case for most people.
So then you're making the case that they do have a monopoly.
This is no different than buying an Xbox or a Playstation or Switch knowing that you will only have access to certain games on each platform. Yes, once you've bought the Xbox you're limited to Xbox-compatible games and it will cost a lot of money to switch to a Switch. But it doesn't mean you didn't have a choice.
> Or suppose I want an iPhone exclusively so that I'm not giving my data to Google and for no other reason. Then my choice of app store is being constrained by my choice of platforms -- basically the definition of an anti-competitive restraint.
Your choice being constrained by your personal preference is well outside the scope of antitrust law.
Except, as previously mentioned, you don't switch to a Switch. If you have an Xbox and then go out and buy a Switch, you still have an Xbox. At which point the stores actually have to compete with one another because you could buy a game for either one.
That isn't what people do with phones. They're not going to carry two phones around all the time, but having only one destroys the competition between stores when a given phone can only use one store.
Also notice that the cost of a game (typically $50) is a lot closer to the cost of a console (<$500) than the cost of an app (typically $1) is to the cost of the average iPhone ($800).
> Your choice being constrained by your personal preference is well outside the scope of antitrust law.
How is this not like saying that a monopoly on gasoline is fine because you're only being constrained by your "personal preference" to drive a car instead of riding a horse?
It seems to me, when you make the choice of what gaming console to buy, you take the entire ecosystem into account. When you make the choice of what phone to buy, you do the same thing. That's not an unreasonable thing to do in either case.
You're framing it as if you had no choice of what phone to buy and now you're somehow stuck with an iPhone with all these restrictions you don't like. But you did have a choice when you made the original purchase!
> Also notice that the cost of a game (typically $50) is a lot closer to the cost of a console (<$500) than the cost of an app (typically $1) is to the cost of the average iPhone ($800).
Again, not sure why this is relevant. The vast majority of apps are free anyway (in which case there is no cost to switch) and other apps may come with you because your account is separate from the app itself (Netflix, etc).
> How is this not like saying that a monopoly on gasoline is fine because you're only being constrained by your "personal preference" to drive a car instead of riding a horse?
A horse is not a "reasonably interchangeable substitute" for a car. An Xbox is a "reasonably interchangeable substitute" for a Playstation.
"We're a Duopoly, not a Monopoly" isn't a winning argument.
But that isn't true if they reject apps for arbitrary reasons, because then there are apps you can't get. Moreover, even if all the apps were available on both, the fact that they don't have to compete after device purchase means they can each charge a higher percentage as a fee, which in some cases will be passed on to the customer as higher prices and in other cases reduce the quality or quantity of available apps by starving developers of resources.
I guess Apple would argue that their policy to reject apps doesn’t hurt consumers, because, if it did increase prices and/or decrease quality and/or decrease availability of apps on iOS, why do so many consumers still buy iPhones? Maybe because having only one, vetted, store has value to them, too?
(Just to make sure: I’m not sure whether I would buy that argument, but I also don’t think it is a slam-dunk that Apple’s behavior hurts consumers, and that consumers have no choice to accept that (there’s nothing against companies giving their customers a bad deal, as long as they’re free to walk away))
Google is removing the ability to side-load apps for anybody but developers who have developer mode on.
Not only that, but side-loaded apps can't automatically upgrade, install in the background or install alongside other applications at the same time. Third party app store can't implement these features, either.
At best, Apple and Google have a duopoly on mobile application publishing and distribution, and they engage in anti-competitive behavior in that market and adjacent ones.
Besides, your argument is a red herring. From the FTC[1]:
> Courts do not require a literal monopoly before applying rules for single firm conduct; that term is used as shorthand for a firm with significant and durable market power — that is, the long term ability to raise price or exclude competitors. That is how that term is used here: a "monopolist" is a firm with significant and durable market power. Courts look at the firm's market share, but typically do not find monopoly power if the firm (or a group of firms acting in concert) has less than 50 percent of the sales of a particular product or service within a certain geographic area.
[1] https://www.ftc.gov/tips-advice/competition-guidance/guide-a...
Apple doesn’t have 50%
https://www.statista.com/statistics/266572/market-share-held...
You're right, according to your source, Apple has 52.4%. Apple also has the majority of mobile app purchases in the US, as well.
Even if they had less, companies have lost antitrust lawsuits with much less than 50% of market share.
Further more, both Apple and Google have a duopoly and are guilty of engaging in anti-competitive behavior.
Android, however, still holds the largest share of the United States smartphone operating systems’ market and has done for many years. Vendors Samsung, Motorola, and LG have all adopted Android as their mobile OS and sales of their devices make up around 50 percent of all smartphones sold in the United States. Sales of Samsung smartphones alone account for 28 percent of the sales market and this could rise in the future with studies showing their Galaxy series of devices rank highly for customer satisfaction among Americans.
Care to cite cases in the modern era? Every time someone tries to find citations, it’s always multiple companies colluding - which is always illegal.
Someone else already addressed side loading, but notice that this wouldn't be true even if Android had actual competition between stores, because it still wouldn't have every app. For example, if everyone in my family uses iMessage, I can't get it for Android, and not because Google rejected it. If I need an iPhone for iMessage, I'm stuck with Apple's store.
> I guess Apple would argue that their policy to reject apps doesn’t hurt consumers, because, if it did increase prices and/or decrease quality and/or decrease availability of apps on iOS, why do so many consumers still buy iPhones? Maybe because having only one, vetted, store has value to them, too?
Or maybe because of iMessage, or because Apple makes faster processors than Qualcomm, or because they do like Apple's store even if they would prefer to have other stores available too, or because they want iOS over Android, or because an iPhone is a status symbol with signaling value in certain business contexts, or because they originally chose an iPhone before it came out that Apple was making all these capricious app rejections and by then were already locked in to the platform, and so on.
That's the problem. When all your choices are merged into one, you can't say no to something you don't want without also saying no to two other things you actually want, which forces you to say yes to things you want to say no to.
I see this excuse all the time. So what if X, Y and Z are a monopoly? The problem isn't monopolies. You are stuck on a word that makes no difference. It is abusing your market position that is the problem. That is what got Microsoft punished and it is what Apple is doing now.