Hacker News Reader

Apple and Google have a duopoly in the mobile app distribution market, and they're abusing that duopoly in an anticompetitive manner to prevent companies from competing with them in mobile app distribution. Anti-trust legislation gives regulators the right to order and prosecute companies for abusing their market positions and for limiting the ability of the free market to deliver to consumers better, more efficient and less costly solutions.

Microsoft in the late 1990's and early 2000's was in a similar situation. They abused their position in the PC operating system market in an anticompetitive manner to prevent competition in the browser market[1]. Microsoft built their OS and Internet Explorer, so who has the right to tell them what they can and cannot do with them? It turns out that the federal government and regulators around the world have that right.

This is like asking why regulators have right to prevent Standard Oil from engaging in anticompetitive behavior, given that Standard Oil built their own pipelines and railroads, after all.

[1] https://en.wikipedia.org/wiki/United_States_v._Microsoft_Cor....

Can you think of any situation where bundling would be acceptable?

Should e.g. a restaurant have to provide an open market for silverware providers?

Restaurants doesn't sell silverware. And even if they did they wouldn't have 10% of EU as customers. EU puts their anti trust laws for marketplaces at 10% instead of defining it as a monopoly, at that size you have to play fair.

Restaurants sell a bundled experience. The use of their silverware is part of what I buy.

You could argue that the restaurant shouldn’t be a gatekeeper. Other parties could let me enjoy a cheaper meal, competing to offer the most discounted silverware. My $10 burger could be $9 if I could rent a paper plate from a third party and eat on the floor. After all, the restaurant shouldn’t abuse it’s monopoly, right?

It doesn't have a monopoly. Now if one restaurant chain controlled 50% of the market, suddenly you've got good reason to treat them as a platform and regulate them accordingly.

Once I’m in he restaurant, it has a monopoly. The same way Apple has a monopoly once I’m in the App Store.

Apple is the only seller of apps on my Apple phone.

Burger King is the only seller/provider of plates and cutlery at my local Burger King.

The difference is, if you don't like it you can leave the restaurant and choose any other. You have no lock in. Once you've bought an iOS device, you can't buy apps anywhere else.

Even if you forget the sunk cost you just have two providers to choose from.

I can always get my next phone from Samsung, just as I can always get my next meal from McDonalds.

But this meal is locked in. If I don’t like the pickles on my whopper, they don’t provide McDonald’s pickles, do they? The don’t allow me to get a McFlurry with my Chicken Sandwich?

Bundling is allowed in every other instance and is key to many great products. Apple can do it too.

This comparison of situation in restaraunts and mobiles is laughable. It reads as either disingenuous or daft.

You are significantly more locked in to your phone than your meal. There are also more choices for where to eat that what phone OS you want to have. Your phone OS is also a gateway to many different industries. Transactions made on a smart phone make up an ever expanding portion of economic activity, whereas eating-at-restaurant generally remains a constant portion of consumer spend.

You can use webapp with almost any modern device, without Apple or Google's app stores

But Apple phone is not your only choice

Does this restaurants operation constitute more than 10% of the silverware market? If not, there is your answer.

Also whoever came with this ridiculous analogy probably goes to a restaurant and then eats there their every meal for the next 2 or 3 years, thinks restaurants have popular multi billion marketplaces of silverware where they charge 30% to providers, which is a significant part of their revenue, and at the same time their own silverware factory which doesn't get the fee, lives in a world where 2 restaurant chains own 99.9% of the market...

People who choose to do business by selling a phone or opening a restaurant choose to do so within the context of the rules and regulations that society imposes on businesses of their sort. If they or society don't like the current rules they are free to lobby congress.

There isn't any inherently correct answer just a variety of possible answers with various outlooks for many parties.

I don't think anyone regards a restaurant as a market for silverware and plates where different vendors compete but Apple explicitly clearly runs a market for apps which is a notably different situation from selling burgers.

There is everyone reason to suppose that burgers ought to be regulated differently from software and regulators, lawmakers, and courts aren't robots required to interpret law like code. Reasonable results require both the literal text of the law and common sense.

A lawsuit attempting to force Burgerville to allow third party plate rental would run into the common sense conclusion that the Burgerville isn't presenting plates inc an opportunity to do business with customers they are simply offering them an opportunity to sell n plates to Burgerville for usage in their business.

Well put.

Apple runs a store, not a market. This is the key distinction to my mind. In a store I expect curation and payola. On a market I expect independent hagglers.

I imagine if Plateify, a hot startup from the EU, wanted to get into the American Burger King “plate market”, they could get all sort of different attention from lawmakers.

Anyway, where’s the line to a “sub market”? If it’s the soda brand that goes with your burger? Should consumers always be able to get Pepsi cheaper than Coke? The whole reasoning is complex and arbitrary. I’d much rather just let companies decide what they want to bundle and unbundle.

What are you talking about. A restaurant doesn’t have the power to steer an economy of billions of dollars worldwide (the phone app market) . Apple and google do. Do you understand the risk for countries to allow one single private company to have complete control over the life/jobs of hundreds of thousands of citizens (app developers) that could be just destroyed by the whim of one of these two companies? It’s the price of creating a multi billion dollar business. You have to take responsibilities that go beyond your own revenue as you have worldwide power.

I don’t feel entitled to controlling any company unless I own stock.

If I build my career on a supplier company I don’t control, that’s my problem.

EU politicians seem to disagree. Mostly (I bet) to protect their own.

Good thing your feelings aren't relevant to... Pretty much anything under discussion here, then.

Well that’s not how it works. When a company controls a very important piece of something society starts to rely on (oil, information, communication ... etc), regulation is not just preferable . It is NECESSARY.

Couldn't the society adopt alternatives on their own if they feel it unfair?

When you are the only two Restaurant in town that offers dinning services and somehow these restaurant has a high barrier of entry so other restaurant cant compete, then yes. How much and what silverware you use could then be a problem.

And I could force you to buy silverware made in X.

If the "app developer" doesn't feel fair to work for apple app store / google play store, they could work for other android app store or, they could work for the web.

Even there are many Apple App developer on the world doesn't mean they cannot choose to left.

I go to a restaurant for food and drinks, not silverware.

I'm not smart enough to make an argument about food pricing but some restaurants let you bring your own bottle of wine as long as you pay a 'corkage fee'

> What precedent are we setting by legally mandating what a corporation can do on a platform they solely built?

This does not concern setting precedents. The antitrust laws are already there, this is just a case of them being applied.

More broadly speaking, I'm not really sensitive to the argument "they built the platform, so they should get to choose to do with it whatever they want". Network effects are so large that there is effectively zero competition. What little competition there is can be easily squashed by Apple throwing a minuscule portion of its capital at it.

We need strong regulation to counter this, and to give small businesses a chance.

> Network effects are so large...

Then are these network effects worth paying 30% for or not? If yes, you've just conceded the price is fair. If no, then Purism's Librem exists (and will not be bought by Apple).

> We need strong regulation to counter this, and to give small businesses a chance.

The same way it gave small railroad companies a chance? Or small oil, or small pharmaceutical, or small telecom? National legislation historically has been a method of pulling up the ladder behind robber barons, not of giving the little guy a chance.

> Then are these network effects worth paying 30% for or not? If yes, you've just conceded the price is fair. If no, then Purism's Librem exists (and will not be bought by Apple).

EU forcing Apple to lower app store fees to 5% or something similar wouldn't remove the network effect though, there is no incentive for EU to allow Apple to extract that fee. Tell me this, what would EU lose by capping App store fees in general? App stores would still operate there, App store companies would still be very profitable, they would just be less of a leech on the economy.

> The same way it gave small railroad companies a chance? Or small oil, or small pharmaceutical, or small telecom?

Regulating those companies greatly reduced their ability to extract money from the market and therefore contributed to the plethora of small companies in other domains we see today. We don't see small companies in oil or pharma since those domains requires scale, which is why we instead of forcing competition force regulations on them to make them do the right thing.

I mean, imagine if we let the oil companies take 30% of GDP as revenue, it would totally ruin the economy and prevent us from progressing as a society. You could argue that those oil companies deserved to get that much money since without them how would we get to work? But, fact is that giving large companies that much money doesn't benefit anyone but their shareholders.

>"legally mandating what a corporation can do"

Can we please stop pretending corporations have feeling and liberties the way natural persons do? It reads like collective insanity "stones have feeling too".

> what precedent are we setting by legally mandating what a corporation can do on a platform they solely built? And are we pulling up the ladder after the incumbents have climbed it?

We are setting no new precedent. In the US, internet provider are regulated as utilities and are stripped of any power on the content they serve, and the platform thrived as a result. What would Internet look like today if AOL had applied Apple's policies?

If we go by that precedent, destroying the closed gardens around platforms is the best thing that could happen.

If we choose to ignore it, then shouldn't we welcome that network carriers demand their 30% share of Apple's profits?

> In the US, internet provider are regulated as utilities and are stripped of any power on the content they serve, and the platform thrived as a result. What would Internet look like today if AOL had applied Apple's policies?

About the same as it looks today. AOL was a walled garden, and unregulated internet was so compelling that AOL was forced to offer it, or die, like so many other services did; of course, AOL still pretty much died, but it lasted the longest of the pre-internet national information services. Incidentally, that was back when it was easy to switch between competitive ISPs or set up your own and there was not much in the way of regulation. Now, we live under the threat of the cable and telephone companies pushing their products. Not a whole lot of clear regulation now, and not even the basis for local loop unbundling like congress provided in 1996, but the FCC watered down until it meant hardly anything.

If Apple wants to keep a tight control on the app offerings and pricing on their store, they should be able to do that. But as there's no official way to install apps outside of that, it's really an unfair position to put the users and developers in to.

"what precedent are we setting by legally mandating what a corporation can do on a platform they solely built? "

They key word is 'platform'.

It's designed for 'broad public consumption', this is different than other, purely internal aspects of their service.

So Ford or GM cannot stop you from buying other vendors stuff and tweaking your car. The very thought would be absurd. A car is designed to be at very least maintained, they can void warranties etc. but not have absolute control.

BMW is stricter about those things, which is fine, but it's still outside of their control.

Finally, I think the reach of the platforms actually does matter - once something becomes a public good, we treat it differently.

Imagine if the electric company in 1921 only ever let you buy appliances 'made by them' suited for 'their electricity', it's just not good.

A similar situation is MS using their platform monopoly to dominate other areas, such as MS Office, which I think should have been regulated as well. Using a platform monopoly, companies can definitely dominating adjacent economies - even while providing an inferior product or experience, which is bad for everyone.

To your point, it's probably worthwhile for us to start defining in legal terms what we mean by 'platform' so the rules can be applied fairly.

You don't have to make up an imaginary electric company example when the real life phone company pulled that bullshit (and still sort of do tbh). In the old days you couldn't just buy a phone or something that used the phone line like an answering machine or some other device. No you had to lease a phone from the telephone company that was approved and installed by them. Hell they tried to stop people putting rubber cups on their phone receivers. And they also happened to have a majority stake in the phone manufacturer too...

Of fundamental importance is that they run a platform. A platform creates a new economy and letting one party (which is not the government) regulate a market is a bad idea.

Also, there is the network effect and there is vendor lock-in. In the past other companies could not use Bell's telephone network, so the government stepped in. The same could happen with OSes.

Don't forget, they built the platform, but 3rd party apps are what gives it value. Very few people would use an Apple device if they didn't have access to their games or productivity apps.

Moreover, users pay a high premium for their device to access the platform. Why should companies also pay in addition to the annual subscription fee to their developer program?

I’m a bit curious about this. I’ve been developing an impression that my willingness to install an app on my phone is a bit anomalous and that, as a rule, the trend is to install a core group of apps and use the browser for everything else.

Even for my day-to-day uses there’s only one or two third-party apps that really “add value” for me (Slack, Taskmator and Signal)

Microsoft also solely built Windows and the EU still forced them to introduce the browser selection screen. No new precedent here.

What about Microsoft and Windows then. People complained to death back in the day for anticompetitive behavior (and were right). The iPhone success is not only Apple’s success. Apple has to thank all the devs that supported its platform with their apps (yeah Facebook and google included) and without which the iPhone would be a gimmick. We can’t just ignore this and tell every developer after they get Sherlock ed to “suck it up and create your own platform you loser”.

Totally, the flow of value goes BOTH ways. The Mac in the 90s was on the verge a death, because you’d pay a premium for a platform with far fewer apps available for it than Windows 98. If Microsoft didn’t bring Office to the Mac, it would have been even more irrelevant.

Apps are the difference between “A phone with extra tricks” and “A computer in your pocket.”

These are very legitimate points. In my uneducated opinion, allowing other app stores to compete with Apple's would reduce the power of incumbents and allow Apple to compete on a level playing field. If another app store is better at filtering out spammy apps, or takes a smaller fee, then I just might install from their app store. It pushes Apple to improve their services than gouge as deeply as possible.