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Comment by echelon | Hacker News Reader

Apple is now a monopoly.

They shouldn't be allowed to run an App Store, and they should probably have their services division peeled away into a separate company.

All of the mega tech monopolies need to be broken up. What business do any of them have being movie studios, advertising firms, car dealerships (Apple?), banks, and fifteen different marketplaces rolled into one? This is absurd.

Tech would be better if neither Apple nor Google ran their app stores, Amazon/Apple/Google weren't in the media business, and Google couldn't run a browser.

Break them up.

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I’m not sure you understand what monopoly means.

Nobody is mad that Apple/Amazon/Netflix/etc are creating competition for banks, movie studios, car dealers, etc.

The complaints about these companies are the specific areas where they hold a dominant position and unfair advantage over other companies. The App Store in the case of Apple/Google, advertising in the case of Google, etc. The areas where these companies have a stranglehold on distribution is the problem.

Amazon and Apple having movie studios and banking aspirations makes competition BETTER, not worse. Literally nobody is mad at Apple for having a credit card or funding movie productions.

Apple has zero control over credit card distribution or automobile purchasing. Why the hell would you want to protect the big banks and lazy old car companies from having to compete with Apple?

The reason you don't want a platform monopoly operating a payment service isn't that they (currently) have a monopoly on payment services. It's that they would leverage the platform monopoly into one, and then there would be less competition in payment services. Prohibiting vertical integration prevents that sort of leveraging without having to micromanage every multinational conglomerate.

The platform company should instead return their profits to the shareholders, some of which will invest them in upstart payment services or movie studios or car dealers. The reason they don't do it this way is that they lose the "advantage" of leveraging the platform monopoly. (There are also perverse tax differences, but that's a different problem.)

> Prohibiting vertical integration prevents that sort of leveraging without having to micromanage every multinational conglomerate.

How is policing all forms of vertical integration in the corporate world not micromanagement of all businesses?

It's macromanagement. It's a big clear fault line that regulators can see from outer space, instead of trying to evaluate whether Apple App Store charging Spotify a given percentage is anti-competitive based on a detailed analysis of their cost structure and having to argue about the allocation of fixed costs between business units.

It also has the advantage of creating a de facto limit on entity size so we don't end up with corporations more powerful than elected governments.

And it's not a prohibition on vertical integration whatsoever, only on vertical integration for companies with market power in any market.

> It's a big clear fault line that regulators can see from outer space

Nothing in the world of regulation is a clear fault line. You're just creating different points for regulators and lawyers to fight about. How are you defining "market power in any market?" Is it just if a company gets 20% of a market? 50%? 70%? 90%?

This also gets extremely sticky in markets that are still developing.

Take Saas for example. Mailchimp arguably has "market power" in email marketing (70%). Should they have been allowed to get into the social post scheduling business? Using your argument, you could call that unfair competition for social post schedulers like Buffer, since Mailchimp already holds market power over one area of the marketing stack.

But what if it's more efficient for all businesses to keep their email marketing and social post scheduling in one tool? Are you going to force everybody to be inefficient and use separate tools for everything because you think it's better the for the "social media management Saas" market?

Should that even be a market? How granular are you going to get over what's a market and what's just a product feature? Social post scheduling is both a feature, and a market of companies. This solves nothing and only creates more micromanagement headaches for regulators.

> How are you defining "market power in any market?"

This is already a concept that exists under established antitrust law. It's complicated and ugly and could probably use some reform, but it's also a different part of the equation. "Does this company have market power" is a separate question from what do we do if they do, for which the proposal is to prohibit vertical integration.

> Is it just if a company gets 20% of a market? 50%? 70%? 90%?

Market power has very little to do with what percentage of the market the company holds. For example, in a market with two local ISPs where one has 95% of the market and the other has 5%, they could both have market power because the market is so consolidated that the company with 5% could still be able to dictate terms to customers. On the other hand, a company with 99% market share might not have market power, if barriers to entry are low and any attempt to raise prices would cause new competitors to enter the market, as is the case with e.g. Walmart.

> Mailchimp arguably has "market power" in email marketing (70%). Should they have been allowed to get into the social post scheduling business? Using your argument, you could call that unfair competition for social media management Saas tools like Buffer, since Mailchimp already holds market power over one area of the marketing stack.

I don't see the trouble here. Mailchimp may or may not have market power (I don't know enough about that specific market to evaluate it), but knowing 70% isn't really that informative. If they do have market power then preventing them from leveraging it to destroy Buffer is good. If they don't then they wouldn't be prevented from entering the other market.

> I’m not sure you understand what monopoly means.

Well, you'd best take that up with the EU and the US Department of Justice, then. You might be a little late.

> Nobody is mad

Half the people in this thread are mad. Companies putting up with app store bullshit and extortion are mad. Furthermore, this will only get worse as the mega monopolies extend their reach into more industries and force people to use their rails for everything, taking their pound of flesh with every interaction. Apple customers aren't even your customers in their model, for Christ's sake. Why do they get the monopoly on that? It's beyond evil and makes it hard to survive, let alone thrive.

Having an iPhone, working for one of these companies, or owning their stock shouldn't cloud your judgment as to what's happening to our industry. Open your eyes and see.

>They shouldn't be allowed to run an App Store, and they should probably have their services division peeled away into a separate company.

I think the ship has sailed on App stores. They're just better than the alternative and consumers are used to them. I'd consider them an integral part of the OS.

The problem is the fees. 30% is excessive especially so for in-app purchases where the customer is already acquired. The easiest and cleanest solution is to just cap these to something more reasonable. Something like 5% or maybe CC transaction costs + a couple percent.

% of revenue shouldn't be a thing. They're offering a service for distributing apps - there should be a standard fee and transaction costs. When I go to get tires on my car they don't charge me based on my income. When I purchase a book they don't charge a percentage of my income. On the app store suddenly you owe them a % of your revenue and you have to use them to get apps on iphone.

> I think the ship has sailed on App stores. They're just better than the alternative and consumers are used to them. I'd consider them an integral part of the OS.

If customers really want app stores then prohibit platform companies from operating them and third parties will do it. But they'll compete with each other instead of abusing a monopoly into high fees and prohibitions on apps that compete with the platform's business interests.

Or if app stores fall out of favor as soon as they're not imposed on everyone by platform monopolies then it disproves your theory that most people independently want them.

30% is industry standard. Spotify takes 50% fee from Anchor; Tencent takes 50% fee in its China Android App Store and owns 48% of Epic Games.

If you mention Tencent fee in Tim Sweeny Twitter you'll get instantly banned.

Amazon's Twitch also takes 50%. But everyone's mad at Apple since they produce products and services everyone buys, even Google engineers mostly use iPhones and Macbooks.

Your position is ridiculous and unworkable.

By your definition companies like Sony, Microsoft, Nintendo, Epic Games, Intel, AMD, Nvidia, IBM, Stripe, Facebook, Samsung, Adobe etc would all need to be broken up as like Apple they are in multiple markets with similar market shares.

YC itself would need to be broken up given your criteria.

I don't see the problem with separating every platform company from every app store. They can obviously be operated by two separate entities, like Steam on Windows.

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