It’s time to free ourselves from ‘Big Tech’ monopoly
azcapitoltimes.com
azcapitoltimes.com
The U.S. keeps consolidating, the "spin" is that it's all about lower costs to the consumer by allowing "scale", when it reality it's just about monopoly power and the ultra rich getting richer and more powerful.
A two party government.
It's all an illusion of choice.
This is happen all over the world, it's not an American thing.
> A two party government.
Doesn't matter if the number of parties is 2 or 20. The problem is: the government doesn't have limits.
Two things we urgently need, IMO: - An improved and very aggressive antitrust law. - Dramatically reduce what a government can or can't do.
Without those two things, I don't hold too much hope of living in a free world.
Those two things are sort of incompatible?
It's hard to be aware, hard to criticize, hard to know and integrate all..
Why not both?
By this logic, there is a Grocery ‘tax’, and a haircutting ‘tax’.
Spotify ‘Taxes’ you. Netflix ‘Taxes’ you. The New York Times ‘taxes’ you.
It’s also a lie to say that Apple charges 30%.
It’s 15% for almost all developers except for a tiny percentage of themselves extremely wealthy corporations.
Perhaps these are the people who are behind these moves. They are the only ones who will gain.
The the idea that paying, 10% less to small app developers will do anything to make Arizonans better off is utterly stupid.
There may be good reasons for tech legislation - e.g. forcing Boot Camp style installation of alternate operating systems on hardware.
But it’s fairly obvious that all this talk about the App Store is just the result of other middlemen lobbying for a part of the action.
> It’s 15% for almost all developers except for a tiny percentage of themselves extremely wealthy corporations.
Remember dealing with distributors and middlemen before the App Store?
I recall high schoolers getting their app on the App Store (and making money out of it) not that long after the Store launched. That was unthinkable a few years before that.
Uhhh.. remember hosting fees, payment processors, ad networks?
For smaller shops in an open market, they'll be a ton of vendors willing to do the 'full stack' checkout experience for a fraction of what Apple/Google charge.
For one, Shopify will open up a 'Software Goods' version of their front end to manage digital inventory and that's that.
$20/month.
I suppose they also provide the ecosystem of devices and the extremely valuable higher-income market segment Apple targets.
Presumably Shopify will do nothing to scan the software for malware, build a privacy framework, deal with incremental downloading of content, etc. etc.
The App Store is not just a bunch of urls with a paywall in front of it.
General “fees”, probably; there's a sense in which monopoly rents are tax-like, though.
Then we can have a meaningful conversation about what to do about them, if that’s indeed what they are.
Tax-like, is not the same as Tax. Even saying ‘tax like’ would be better.
It’s still a dishonest politicization to call them taxes.
If we call App Store fees ‘taxes’, why don’t we also call healthcare premiums, or bank charges, ‘taxes’?
It seems more honest than dishonest to me.
But it’s not what they are doing. They are not saying it’s ‘a lot like’ a tax, the way you are. They are saying it is a tax.
What they are doing is dishonest.
Fees which can be perceived as arbitrary capture of a piece of economic activity (and monopoly pricing could be considered that in part) acts just like a tax.
You can actually demonstrated the 'economic loss' (deadweight) from a tax with the supply and demand curve. The loss is usually more than that, but at least the direct math is there. [1]
And this: "talk about the App Store is just the result of other middlemen lobbying for a part of the action." is just completely false. There are no 'middle men' to lobby.
[1] https://www.khanacademy.org/economics-finance-domain/microec...
Whether something is a tax or not has nothing to do with perception.
Also these fees don’t act ‘just like a tax’.
They are not taxes. They don’t act like taxes. It’s dishonest to call them taxes.
It’s reasonable to compare them to taxes. It’s false to call them taxes.
> There are no 'middle men' to lobby.
This makes no sense.
Epic is lobbying and want to be a middleman.
Facebook is lobbying and wants to be a middleman.
Your link is about taxes, but does nothing to support the argument that App Store fees are taxes.
Edit: Here is proof that Epic is lobbying:
https://appleinsider.com/articles/21/02/16/epic-games-behind...
Apple, were it not a 'kind of monopoly' would have considerably different pricing structure. The difference between that 'free market price' and 'Apple's current price' - is the the part that has similar effects to a 'Tax'.
Apple's fee is like a tax for exactly the reasons I highlighted - it creates 'dead-weight' in the market.
This is bad for everyone, even Apple in the long run - just as carriers like AT&T and Verizon wanted to charge 10 cents per 'WAP' page back in 2002, which a price they can dictate because they had the power to, but was obviously completely stupid because it would have restricted the market.
...
'Epic' is not a 'middleman'.
'Epic' is a vendor, they are on the other side of the value chain. They are effectively having to pay a 30% tax on their business and it has nothing to do with 'middlemen'.
It's unlikely Facebook wants to be a 'middleman' because they could already be doing that for Google Play - and they are not.
Once we see true, independent app stores and software that supports smaller vendors - which will happen when other app stores can be on equal footing - we'll see what the 'true' free market competitive pricing for those services will be.
My guess is that it's well under 10%, probably in the range of 4-8% depending on services provided. 3.5% of that will be processing fees to VISA and the networks etc..
Completely false. Epic proposes to run their own App Store. They are a middleman. You would know this if you had been following their cases.
The Google play analogy is absurd for obvious reasons. By that logic, anyone who would be interested in opening a store on iOS would already be running one on Android, which is clearly not the case.
If Apple is charging too much, the solution is for competitors to build their own platform. They can easily afford to do so, and that would create jobs, innovation, consumer choice, and pricing pressure.
Forcing Apple to provide a platform for them is the opposite of market dynamics.
Epic and others are trying to avoid making real investments in the future because lawsuits and lobbying are cheaper than building platforms.
it might not be a tax that goes straight to the government but what are you going to do, not eat? how will people treat you if you stop maintaining your hygiene and look like a caveperson? its a tax because it is a necessity.
For what it’s worth, I know people who haven’t cut their hair in decades, without any serious consequences.
For the same reason if I sell 'magic makeup' it's not dishonesty because anyone with a brain knows it's not literal.
It’s fairly obvious that Apple invests heavily in the development of iOS, the Mac and the iPad and iPhone.
The people whose assets are being protected are the people sitting on large amounts of capital that they could invest in creating alternative platforms.
What would it cost to build an alternative?
$1BN? $2BN
Epic alone has vastly more than that available to invest, and there are many others who do too.
There is no reason that we shouldn’t have a third or fourth alternative given the 100s of billions of dollars sloshing around in these companies and in VCs.
That would create more jobs, and would put real competitive pressure on Apple and Google.
Letting a few middlemen siphon a few percent out of the App Store while degrading user experience will not.
Just consider for a moment what it would take to make an actually free Linux into a viable smartphone platform (as librem and pine are trying to do).
The answer is, very little for companies whose revenues are in the billions.
That would create the free market they claim to want.
There is no reason at all for companies and investors who think an open ecosystem would be good for them not to put $2BN into a joint venture to build an open Linux for mobile.
Except that they don’t want an open platform.
They just want a cut.
"The Rule of Three applies wherever competitive market forces are allowed to determine market structure with only minor regulatory and technological impediments."
https://iveybusinessjournal.com/publication/competitive-mark... https://en.wikipedia.org/wiki/Rule_of_three_(economics)
The costs here of developing the platform and substitute services / features is high and all investors want some return on the investment. Third place companies are often stuck in the ditch going nowhere. Microsoft has deep pockets and years of experience, but ultimately bailed on Windows Phone because #3 is not a good place to be.
However I agree with you about Windows phone. There is no room for a 3rd place closed ecosystem like iOS or Android, where the goal is to monetize the app distribution platform.
However, there is absolutely room for an open platform where the profit comes from competitive apps that are able to do things that are not allowed under iOS and Android and can be developed by more parties.
The fact that a truly open platform would get leverage the from community, only strengthens the case.
If you want some MBA buzzwords as a lens, this would be called commoditizing your complement.
It is in the interests of people who don’t own closed stores, for the stores to be a commodity priced at as close to cost as possible.
That group has an interest in investing in such a platform. Not because of the direct ROI from platform fees, but because of the reduced costs to them, and frankly the reduction in power of companies like Apple.
It’s appears that it is cheaper for them to attempt to lobby for legislation to force other people’s App stores into being a commodity (or more likely force access for a limited group), than to actually build one, or at least it’s cheaper to try that first.
You can also look at low-end disruption theory.
From a mathematical perspective alone, these companies have soaked up immense wealth.
There’s little to go around for infrastructure projects while it’s locked up in private vaults.
Many communities did not have much say in how decimated the local economy would become by the last few decades of neoliberalism. It’s placed a heavy burden on many lives.
This is true. Such a colloquial definition does exist.
However using that definition in a discussion about government and economic policy is a form of dissembling.
> From a mathematical perspective alone, these companies have soaked up immense wealth.
This makes no sense. The concept of ‘soaking up wealth’ is a completely subjective political characterization. It cannot be a mathematical perspective.
> There’s little to go around for infrastructure projects while it’s locked up in private vaults.
What are you talking about when you talk about infrastructure? Is this point about taxing corporations so you can build schools?
If so, that’s nothing to do with what the article (written by Republican politicans) support.
A generalized attack on neoliberalism has nothing to do with the points being made here.
For example, I support the idea of forcing something like bootcamp to be made available for all general purpose computers.
It an ironclad economic reality that Apple has $200 billion literally sitting in offshore tax heavens. It has failed to effectively invest or spend it for the past decade.
If you deny that this is unproductive, then you have left the realm of reasonable discourse and it's like debating Nasa's research with a flat-earther.
It’s not actual banknotes. It’s in investment vehicles.
Generally that means it’s invested in things like stocks commodities etc.
We can debate whether Apple is investing their money in productive vehicles or not.
But it’s not literally sitting anywhere.
> It has failed to effectively invest or spend it for the past decade.
Has it? You may be right.
You are certainly right that they have this much capital offshore.
To claim that it hasn’t been invested effectively isn’t something you can say without qualification.
> If you deny that this is unproductive, then you have left the realm of reasonable discourse and it's like debating Nasa's research with a flat-earther.
If you say so.
One reason businesses keep large amounts of securities on hand, is to mitigate risk.
I’d say Apple faces some of the largest risks of any company in the world.
It is dependent on China for most of its manufacturing, and Taiwan for all of almost all of it’s silicon.
It’s not at all unreasonable for them to consider a future where one or both of these are the subject of political instability.
The government can certainly precipitate disaster for Apple in China or Taiwan, or fail to protect Apple’s interests.
What it cannot do is rebuild its supply chain or silicon vendor in such an event. For that Apple would need a large reserve in the order of 100’s of billions of dollars.
Do you deny that?
Which is ultimately my point. None of us have to view Apple as “valuable”.
It’s simply a political routine built upon exposure to previous political routine. Time series of the brain.
There’s a tax on our agency to keep propping up systems that are devaluing our agency to the benefit of a moneyed minority.
We’re under no political obligation to enable or protect that, no matter how much economic theory you copy-paste.
Imo the free market is not Apple and Dell computers, or Ford and Chevy cars. It’s between public and private power.
One has cost us reliability and resiliency for fiscal efficiency. We do not have to politically accept that.
Not really. Also I’m not copying and pasting anything here.
Notice that the person I am replying to is the one who is talking about ‘iron clad economic realities’.
You’re welcome to deny the value of anything you like, or the existence of it for that matter.
Nobody is obliging you to accept any reality you don’t like.
> There’s a tax on our agency to keep propping up systems that are devaluing our agency to the benefit of a moneyed minority.
Why are you propping them up then?
> Imo the free market is not Apple and Dell computers, or Ford and Chevy cars. It’s between public and private power. One has cost us reliability and resiliency for fiscal efficiency. We do not have to politically accept that.
It’s not clear what you are trying to say here. Can you explain?
What do you mean by a ‘free market between public and private power’?
I talk trash about big tech constantly, I’m hardly propping them up. They have no information advantage, just a political capital one.
The authors are using their political insight, based on the last generation or so of political rhetoric to emotionally minimize others value of Big Tech, suggesting that to be of local economic benefit.
> It’s not clear what you are trying to say here. Can you explain.
Our economy is predicated on a post hoc conclusion based upon information manipulation.
We denigrate humans spending time economy on public solutions to problems, and celebrate deference to privatization.
This creates a neurological preference for the latter over the former. We circularly continue to justify storing more value in these organizations ultimately based upon the initial post hoc observation; this is what happened so it must keep happening!
Never mind that ultimately it’s human agency being co-opted into propping up the value of others and undermining themselves.
Politics needs to consider the time dimension for the masses. If it’s going to take someone their life to pay off a debt because society told them that’s just how it works, that’s hardly freedom. Politics largely just concerns itself with space; ownership of property. Not the tax on our time for things other than making sure Bezos and Musk are still rich.
I don’t see what this adds except a vaguely insulting innuendo which applies equally to you and lowers trust. Also, it seems odd to me that you are reading emotion into what you call copy pasted economic theory.
I actually agree with a lot of what you are saying, except that I don’t think it reduces purely to information manipulation, and to a certain extent, that claim can result in a facile justification for one’s own attempts at manipulation.
It’s also just not clear how any of this is relevant to the topics at hand.
Isn’t your comment just a generic ‘the system is bad’ and ‘politics needs to change’ (agreed), and ‘it’s all a scam to keep the rich in power’ (partially agreed), we need to think differently (agreed). But with no additional content?
* Big Tech monopolies controlling news and information: Twitter, Facebook, Google
* Big Tech monopolies on Advertising/Marketing: Facebook and Google
* Big Tech monopolies on Multimedia content: Netflix and Spotify
* Big Tech monopolies on Cloud Technology Infrastructure: Amazon, Google, Microsoft
* Big Tech monopolies on Mobile: Apple and Google
* Big Tech monopolies on eCommerce: Amazon
We could be talking about "Breaking up Big Tech" for 50 years trying to break all of these up. It's kind of insane.
I think you mean NYT, Wapo, Fox, CBS, Zeit, Asahi "control" the news...except there sure are a lot of them.
If it's a traditional news article or op-ed, it's almost always a complaint about this iteration.
Don't forget the soon to come:
* Big Tech monopoly on space travel/mining: SpaceX, Blue Origin
* Big Tech monopoly in the car/taxi industry: Tesla, Boring Company, Apple, Google
* Big Tech monopoly over wearables/implants: Apple, Neuralink, Amazon, Google
* Big Tech monopoly over VR: FB, Apple, Valve
* Big Tech monopoly over restaurants: Uber, Apple, ???
* Big Tech monopoly over banking: Chase, Apple, Intuit, Amazon
Big Tech is likely a misnomer. The reality is over the last 50 years we have only really had 10-20 companies that we truly consider innovative. Technology is a new modus-operandi for companies.
Its like this: The first shops just used spoken language only. When some shops started to use literacy as a way to write down a menu or track receipts, calling those businesses "Big Literacy" would help, but really the best help is to get every business to change their mental models and operate under the newest winning modus operandi. Similar story with businesses that normalized leveraging Math and/or Economic theory as a winning modus operandi.
What we need is every company in the S&P 500 to adopt the winning strategies (long term thinking, leadership principles, software as a product rather than a cost center, vertical integration, etc) from FAANG companies, until then we will be left with only the S&P 5 or at-best 50. Or, we need to create regulation to stop those strategies from being the winning strategy (hopefully without stagnation).
I think the oligopoly term hasn't really entered the North American vernacular. Even I think about Russian oil companies when I hear it.
And yes, we're still creating more of these every year as Big Tech expands to eat the world.
You would also have to remove the ability any state or city to carve out exceptions
Judge-driven? My memory is that AT&T asked to be broken up so it could get into the personal computer business.
https://legiscan.com/AZ/amendment/HB2005/id/89532
I'm not sure why it was introduced as an amendment for a bill about distributing federal education funds, but I'm sure there's some justification in the legislative process.
Anyway, this is very clearly tailored towards the current Epic vs Apple/Google fight, right down to disallowing "retaliation" from platform providers.
Isn't this just grandstanding, based on letting Microsoft keep it's monopoly?
This is the Midwest aiming to break apart coastal software ecosystems and distribute them more evenly across the nation. Big tech firms don't just use their might to unfairly fight smaller competitors, they also use their might to recruit talent to certain geological regions. This causes salaries, cost of goods, among other things to stagnate and hurt their own economies. The real word for it is pushing back against state to state income inequality by attacking the powers and structures that reinforce them, which in this case is technological conglomerates. If you've ever wondered why you get paid $80k to be a software engineer in Oklahoma while someone doing the exact same job with the exact same requirements in Silicon Valley makes $200k+, state to state income inequality is most of the reason, while cost of living attributes a very small sliver of that calculation.
Stupid.
Im not even sure why you mention Microsoft? In what way are they a monopoly in any way? All of their products have alternatives, and they charge no extra fee when I install software on my Microsoft computer.
They have more than 70% of the desktop OS market share: https://gs.statcounter.com/os-market-share/desktop/worldwide
In Enterprise software (cloud or desktop) they have even larger share.
> All of their products have alternatives, and they charge no extra fee when I install software on my Microsoft computer.
And Google's products don't have alternatives? :) I would argue it's much more easy to type "bing.com" in your URL than it is to change the desktop operating system, even for a techie. So not only are there alternatives, they are easier to switch to.
Whats your definition of a monopoly?
Is the word "web" there instead of "app" just a mistake? Because web developers can accept payments for their apps without going through Apple or Google, even on mobile. It's one of the things I love most about the web.
that's like arguing that housing market is not a problem because you can live in a cave or a tent.
Most people aren't going to do that, bank apps refuse to work on jailbroken phones, etc.
Not defending the heuristic, but I can see the (hasty) logic.
However, it's worth noting that this article is under the Opinion section.