I guess a comparison would be a utility that both owns the transmission lines and power plants? However, the transmission line rates are set by regulation. We have accepted as a society that the infrastructure needs to have regulated pricing.
So why is it all that different here?
The transmission of the products, just given the way the cellphone market works, is basically limited to either App Store or Android Store. I basically have no alternative.
Isn't that approaching a monopoly / duopoly where regulation starts to make sense?
I say this all as a fairly conservative person, but it just seems too similar to utilities to me...
Why am I wrong? (Serious Question)
Or it might be a cartel (few players are coordinating for maximum revenue, are not competing, prices are fixed), but we usually won't let that stand either.
It's good to remember that Google and Apple (and others) have been found to collude before when they made secret no-poaching deals. They settled for $415m.
I don't know how that would work though, without breaking up the companies.
… Let's just say there's a reason my example is oddly concrete.
In your example, as far as I know consumers do not actually interact with the power plants, and have no choice on what utility company to use; to do so would require duplicate infrastructure. In the (either) app store case there is — I can still install the Microsoft mail client instead of the Apple or Google ones.
This wouldn’t work now, but if it was done when Netflix was growing it would have severely impacted their ability to compete.
Which is exactly how Xfinity OnDemand works.
Apple’s creation, development, and control of the App Store is akin to Comcast’s Xfinity OnDemand. They are both retail stores owned, operated and curated by their private enterprise creators in order to sell some first party but mostly third-party content.
Utility regulation only works when the product doesn’t change and is a fungible commodity - power is power. It also is about driving prices down for consumers for that commodity.
The iOS and Google platforms have barely existed more than a decade, and the platforms are constantly evolving. New platforms and ecosystems are emerging too, with Facebook/Oculus, Valve/Steam, Amazon with Fire/Alexa, etc.
Enshrining today’s dominant app platforms as the government sanctioned ones will surely stifle their evolution and innovation, because that’s what declaring something a utility is: a commodity with no differentiation.
The crux of this matter is that end consumers generally do not care about the 30% cut, It’s a retail cut they’re used to from other platforms like Sony PlayStation, or Ticketmaster for concert tickets. it barely impacts them (and arguably the curated stores are a better overall experience). I also don’t think almost any consumer of iOS would agree their App ecosystem experience is fungible with Android or anyone else. This is entirely driven by Devs and publishers that want better margins.
The counterpoint being that Ticketmaster doesn't take a 30% cut on consession sales at the event AFAIK.
That's the real issue - these stores are distributing some apps for free and some for pay. Hence free apps can sidestep paying the Google/Apple cut and then offer in-app payments directly. But that's entirely due to their business model of allowing free apps and taking a cut on paid apps.
Ticketmaster doesn't provide as complex of a service as Apple does with the App Store.
The service doesn't seem that complex. Executing the service well may very well be complex, but the service itself isn't.
So it's like you use Google Firebase as the backend for your app and they take a cut under that agreement, as opposed to the Play Store agreement.
There was an attempt to argue they were a monopoly that should be regulated due to the % of the ticket they retained (Pearl Jam spearheaded this in the 90s). It didn’t work.
Also I see nothing wrong as a business model with the Firebase analogy. If you could convince customers to go for it, then why not? Will the business model police arrest you?
What I don’t get about these arguments is that they’re trying to get the government to punish a couple of companies that built a very successful business model purely because others want some of that dough. This isn’t about monopoly by any historical definition, it’s about sour grapes.
I think by inadvertently comparing them to ticketmaster (whom consumers actively loathe) you've inadvertently demonstrated just how much consumers do care.
Consumers just aren't necessarily able to understand the underlying market mechanism that gives rise to the shittiness they experience.
Banks don't offer the same services and prices, and they cann innovate by creating new financial products, which seems to address your fear of losing the innovation in a regulated market.
When a bank wants to participate in a market it operates, it is forced to create a subsidiary, which is not allowed to have a better deal, or insider information.
These rules have been pivotal in the development of market operations, because they offered investors confidence that they had recourse against rigged markets.
In effect, that would mean that Apple and others. would be able to compete with app creators, but 1) Market owner's apps would have to pay the 30%, and 2) market owner would have to provide equivalent ToS enforcement for all services.
Once you have critical mass, failure is next to impossible, slow and even preventable. Microsoft has been dominating desktop computing since 1981 through MS DOS and 1991 through Windows (almost 40 years!). Android and iOS will probably be around for 50 years, even if they become just another layer. We still have radio, TV, heck, even the post and vinyl.
Computing has changed. It crossed the chasm.
zOS is still the dominant OS for mainframes (60 years later!), MS-DOS was replaced by a product from the same company, Windows, that is still the dominant OS for desktops (30 years later). I don't see anything on the horizon that threatens zOS, nor Windows. Except their platforms disappearing, which is still at least 10-20 years from happening.
iOS is the dominant OS for its platform and Apple won't abandon it until the platform dies (I guess once we have wearables that completely replace smartphones?), Android is the dominant OS for all other smartphones. Microsoft poured billions into creating a smartphone app ecosystem and failed. Blackberry, Palm, Nokia, Amazon tried and failed. How, pray tell, would Android die if smartphones are still popular? The Google moat is HUGE.
It's worth noting that Media has gone in the opposite direction - One of the many reasons I was vehemently opposed to Comcast's acquisition of NBC was because it's just too vertically integrated to be good for the consumer.
Something like that happens a lot with mobile networks, where some operators both have a license for bandwidth and sell it to customers, and other operators buy bandwidth from them to sell it to customers (https://en.wikipedia.org/wiki/Mobile_virtual_network_operato...), with an important difference being that customers (sometimes after a few years of contract) are free to switch between providers.
But yes, the important discussion here is whether app stores should become utilities. AFAIK, there is no existing law there, so it will have to be created. Because there is no law, I don’t see Epic winning this in the sense that they will get paid for damages. They may win in the sense that things will change, though.
Here in the UK, a common tactic of theirs is selling a branded product, then if it sells in sufficient quantities they make their own brand, cheaper, sometimes lower quality, version.
And then they put it right next to the original product on the shelf.
It can't be one rule for the tech companies, and another for all the other companies. It's a store, expect the store to take a cut and if you're too successful, compete with you.
It’s like there’s only one supermarket where you can sell your products, but they can still compete with you as you described.
if you don't like this thing we're talking about, why didn't you do anything to stop this other tangentially related thing that happened a long time ago?
I'm not even sure what you are describing makes sense. our supermarket sells hood brand milk, as well as their own private label milk. however the private label version is made at the hood factory using hood milk. in this case, I'm pretty sure the people at Hood don't care which one you buy since they get paid for making the "ripoff" brand.
your example would be fitting if Apple made their own clone of epic's app, but paid epic to do it
While that may or may not be the case in this particular anecdote, it's certainly not the norm.
This is whataboutism.
Many people around here were not old enough to be interested in politics "literally decades ago". And for those who were, the hindsight we have now is a good reason to start getting interested in the issue.
> It's a store, expect the store to take a cut and if you're too successful, compete with you.
The whole point of politics is to fix outstanding issues. "It's always been like that", "suck it" or "fuck you, got mine" rarely make for convincing political speech.
The issue here is not making a comparison, but calling people out for not having addressed the object of the comparison beforehand.
Compare that to app stores: users are in practice not free to pick another app store, even on android - network effects make using alternatives quite tricky and even risky, and the device/OS maker don't make it easy to pick reputable alternative stores. App stores additionally leverage their monopoly on that user to hide their costs from them; e.g. in apples it's not even allowed to mention the cut apple takes and where you might be able to buy more cheaply - and not just in the store, but even in the app itself, even indirectly! There's no MSRP by which to note that that 30% cut is extortionate. Finally whereas last-mile logistics are tricky for real-world goods, app store checkouts are not; almost the entire value provided is in network effects: i.e. the value is provided by the users of the app store, not the app store itself.
All of these disparate factors mean that app stores clearly are not a competitive market, whereas supermarkets aren't quite as bad. But let's not forget: just because supermarkets are "less bad" than app stores doesn't mean there's no potential for market manipulation; we should be vigilant there too - just that the kind of manipulations supermarkets can pull off aren't going to be quite as impactful.
TL;DR: not only are app stores much, much worse than supermarkets when it comes to harmful market manipulation, flaws in one market do not excuse flaws in another anyhow.
Says who?
(1) Telecom provider as a case in point. They provide a fat internet pipe to consumer. But they do not get to bill the application providers (OTT- over-the-top) on a recurring basis.
(2) App marketplace is an interesting and crazy thing. If I subscribed to Netflix through app marketplace, the marketplace does NOT provide me (consumer) any value at all. But if Netflix has to pay 30% to Apple/Google of all the $$ that I pay to Netflix, something is broken in the system from my (consumer) viewpoint.
But it provides Netflix value in that they have more customers.
If you (physically) shop in a store you don't even think about the retail margin.
ctrl-f for undercut in https://timetoplayfair.com/timeline/
That only occurs if Apple facilitates/manages the subscription.
AFAIK, they are both generally outside of the "Apple Tax" at this time by redirecting subscription signups to a browser.
30% is the reward they get for making great business decisions, and as far as competition goes I don’t really think Apple is that serious. Apple Music is an evolution of iTunes, which has been an Apple product for 20 years.
If Spotify wasn’t profitable it wouldn’t exist. Apple’s platform makes that business possible on mobile. If Spotify’s investors weren’t content with making the money they are making now, Spotify can fold up. There is no reason that they have to make a “fair” profit or the same amount of money as Apple Music. None.
When you look at the App Store ecosystem it is incredibly healthy and competitive. There are numerous music apps, all making a ton of money. I have no sympathy here.
This is the very reason Spotify charges more (if they even allow it anymore) when purchased as an iap.
Apple likely has not stomped down on it because that one would be rather clear cut case for courts.
Should AWS have to sell at cost because Amazon uses it for a cheaper price than other retail websites?
Because that’s the same thing, but without cellphones.
I realise a lot of people argue Apple shouldn’t be able to charge anything, or should provide features for side loading and APIs and services to third party stores for free, but that’s not what your suggesting. I’m just critiquing your suggestion.
In fact, even in the grocery retailing industry, there are integrations that would run afoul of the rule you are proposing. Kroger, for instance, sells brands it owns, while selling competing brands for what is, effectively, a commission. I'm not just picking on Kroger, all major chains engage in this practice. I was only using Kroger by way of illustration.
So what you're proposing has far reaching implications. I don't even think it's necessarily "bad", per se. But it does change the entire "order of battle", as it were, in the American retail space. Lots of people would go out of business, and lots more would be in serious financial trouble.
Google and apple effectively have a 30% tax on all mobile software business. They are killing all apetite on developing new mobile software, as less and less developers want to be involved with their shady practices of stealing features and locking apps out.
It would be the same if there were only 2 stores where you can buy clothes in the US and they tax every manufacturer 30% to sell any goods there, while also selling their own goods without commission. On top of that, occasionally stealing good concepts, copying those, and selling as their own products. And of course, locking out annoying partners at their will without having to explain why one manufacturer can no longer engage in business with their customers.
You can buy apps from other Android stores as well. Android stores that have absolutely no affiliation with Google.
This sounds a bit like “nobody drives anymore because the traffic is too bad.” App stores are still growing at a decent clip, no?