It's nice to see that you don't have to be a monopolist to be legally barred from anti-competitive behaviour. I hope this puts a permanent stop to all the thread on HN arguing one way or another whether Apple is a monopoly.
The current definition of a monopoly.
Whether the current definition of a monopoly needs to change.
If you are mixing the two arguments discourse can go nowhere because you're substantively discussing cause and effect. The current definition of a monopoly needs to change, imo, then we can talk about whether Apple is a monopoly.
I'm also interested in discussing conglomerates and whether they are good or bad, and how to control them similar to monopolies, but that discourse can't be had until we can agree on something like the definition of a monopoly.
Apple, Google, etc. are having their cake and eating it, too. They have platform which they charge others to use (ok), and then they study usage data (somewhat shady) and then launch direct competitors (<<super>> shady).
That's the root of the problem in many cases.
Of course, this needs to be coupled with stronger anti-cartel enforcement. Because tech is rarely a pure monopoly, but extremely often is ends up under the control of a cartel.
I really don’t feel bad if some developer selling a leveler app for 99¢ goes out of business because Apple pre-installs a free leveling app on the iPhone.
However, I fear most efforts would start with "Companies X, Y, and Z need to be categorized as monopolies. Let's write rules to fit"
Edit:
Stating my opinion without why isn't very HN-ly of me, eh?
She's been on Planet Money and discussed her ideas, where they come from, etc before. I don't think I'd quite do them justice explaining them myself. Apparently she's now a chair of the FTC as well (which I was unaware of).
If you want a raw view of her views on anti-trust: https://www.yalelawjournal.org/pdf/e.710.Khan.805_zuvfyyeh.p...
In one of the podcasts she dives into the history of anti-trust. She talks about how after Standard Oil we convinced ourselves everything was a monopoly and stifled a lot of innovation, which led to some reforms later and the anti-trust we have today which are demonstrably too permissive. She has picked on Amazon (as a wider corporation) quite a bit, but a lot of it has to do with the practices of their ecommerce division and the extent to which Amazon can compete with it's vendors. Basically, she believes there's a middleground to be found between the two anti-trust time periods and that it's important to be concise in how we do that. You can see some of her specific criticisms in the article above.
A more full bibliography can be found here: https://en.wikipedia.org/wiki/Lina_Khan
I highly suggest "The Separation of Platforms and Commerce" as that's the one that resonated with me, having worked in the startup world.
Would you mind linking to something pertinent, in order to add to the discussion? What does she say? Where does she say it? Why does that appeal to you?
In this case, the opening of the person's Wikipedia page probably sums it up right away:
> In the article, Khan argued that the current American antitrust law framework, which focuses on keeping consumer prices down, cannot account for the anticompetitive effects of platform-based business models such as that of Amazon. She proposed alternative approaches for doing so, including "restoring traditional antitrust and competition policy principles or applying common carrier obligations and duties."
If you want a raw view of her views on anti-trust: https://www.yalelawjournal.org/pdf/e.710.Khan.805_zuvfyyeh.p...
In one of the podcasts she dives into the history of anti-trust. She talks about how after Standard Oil we convinced ourselves everything was a monopoly and stifled a lot of innovation, which led to some reforms later and the anti-trust we have today which are demonstrably too permissive. She has picked on Amazon (as a wider corporation) quite a bit, but a lot of it has to do with the practices of their ecommerce division and the extent to which Amazon can compete with it's vendors. Basically, she believes there's a middleground to be found between the two anti-trust time periods and that it's important to be concise in how we do that. You can see some of her specific criticisms in the article above.
A more full bibliography can be found here: https://en.wikipedia.org/wiki/Lina_Khan
I highly suggest "The Separation of Platforms and Commerce" as that's the one that resonated with me, having worked in the startup world.
I wrote more about that here: https://www.tinker.fyi/6-break-up-tech-conglomerates/
The problems now have more to do with market capitalization / revenue than they do with physical control.
Apple or Google aren't trying to buy all the railroad tracks between Cincinnati and Kansas City (app stores aside). They're trying to assemble a company that owns all the disparate but critical pieces in an ecosystem, then leverage those into extracting higher than free market rents.
Consequently, remedies shouldn't be the same as for monopolies (read: breaking up companies). They should instead of targeted on (1) classifying corporations by their size & (2) placing limits on their actions, in places where that size provides its own monopolistic-esque advantage.
Afaict, these should take the form of prohibiting acquisitions of competitors (Facebook shouldn't be able to buy Instagram or WhatsApp, but Instagram and WhatsApp should have been allowed to buy each other / merge) and stricter limits on market entry (FAANGM or SoftBank deciding they want to throw stupid money into a hole to poison the well and capture market share).
When a platform or market is created by an entity, and that platform reaches a certain scale, they must allow free competition within that market.
Here's an extreme example. Say somewhere down the line Facebook invents some metaverse or VR world. This becomes the primary form of interaction between people... 99% of interactions take place in this virtual world. It's clear the scale and extent to which this platform impacts people's lives is substantial. So Facebook logically would have to allow other sellers to enter this virtual world and compete to drive prices towards a free market equilibrium.
Past monopoly legislation has focused on competition outside the walls, product vs product. But nowadays the walled gardens are getting big enough to the point that these companies have large control over our lives.
Maybe that example just muddies things, but the important thing in my mind is to identify "private markets" and enforce that competition be allowed.
Most of the ills we're trying to avoid don't seem to easily slip around, if there's a law that says "If you control more than 25% of a market of more than 1M users..."
I don't think anyone is arguing that Apple shouldn't be allowed to create an iEcosystem.
But what we all want is a future where Apple's ownership of the iEcosystem can't be used in such a way, and generate enough profit, that no one can ever overturn Apple's position.
Your describing a monopoly. IMO the real question is what actually harms consumers.
Requiring companies to open their platforms is one option for regulation, but perhaps not ideal. Great for tech companies sure, but possibly a huge opportunity for scammers. Consumers and companies are often at odds, banning app coins for example is great for gamers and the opposite of an open platform.
A flat regulation that all software platforms are limited to X% fees might be a better option.
Here's a better one. Facebook creates a virtual world where 50% of the population choose. Apple creates a different virtual world which the other 50% choose.
If you simply look at the boundary/entrance you can say there's freedom of choice. But whether you choose apple or Facebook, there's 0 competition once you're inside that world.
Further, once you've established a home and connections within one world, switching to the other becomes quite expensive.
Competition at the gates, monopoly within.
I might add that this is very similar to the concept of company scrip whereby the local coal mine had a monopoly over local jobs and gouged workers for basic necessities. Absolutely you could have moved a town over, but the cost to do so was deemed too high in many cases.
When cost of switching is high, monopolistic power can be enforced upon customers. It's a similar situation with a lot of SaaS who have pricing power to strong arm their customers into high margins due to the cost of switching to alternative technologies. In a truly competitive market, SaaS margins should be close to 0. Obviously that's not the case today.
Regulation will catch up to all of these tricks, just a question of the timeline. Capitalism only works well when there's an environment of competition, and leveraging high costs of switching or large gated systems to enable profit margins well beyond what a competitive market would bear is antithetical to this concept.
That's why antitrust law is so important, and needs to evolve to handle modern business structures.
Xbox, iOS, and Windows are platforms that also provide basic utility where third parties are part of the basic product. It’s by owning a platform they gain some control over that relationship between consumers and those other companies. Such complex relationships aren’t completely new, malls are gatekeepers for the stores within. But, such relations are normally heavily regulated.
All of what you listed are easily substituted, and not very impactful to somebody's life.
The same games exist on Xbox and Playstation (95% overlap). McDonald's is a buy one time product, where you can easily choose on a given day to go to BK or Wendy's. You buy an iphone, you aren't going to just buy an Android the next day if Apple raises costs. Isn't it obvious how different these are?
You can bet that if Microsoft charged any third party apps on windows 30% of their revenue they would have been regulated long ago. You really think otherwise?
I don't understand the Apple defenders. Encouraging actual competition within the platform is the pro business stance. Competition is the basic element that makes capitalism work.
You don't have competition if cost of switching is high, it's that simple.
Platforms with sufficient impact on people's lives, and sufficiently high cost of switching will be regulated to require competition. It's as simple as that, though fanboys will kick and scream for the next few years until it passes into law. It's the obvious outcome, and china is already paving the way on legislation.
But everyone always becomes substantially less interested in topics once it becomes hashing out legal language. Which is why we pay lawyers well.
Have you any idea of how many laws would need to change, not to mention all the academic papers, legal and academic commentaries and textbooks?
At the end of the day, who cares if they are a monopoly or not - you don't have to be a monopoly to be in a position to do Bad Stuff to The Market.
Seems like that just makes "it's a problem" do all the work.
Even if they aren't a monopoly, they shouldn't be allowed to engage in anti-competitive behavior.
Market driven de-facto monopoly are allowed. If you own >90% search engine marketshare it is fine as you have earned it. If you abuse the marketshare to enter shopping, travel market it is monopoly-*abuse* and it should be blocked/fined.
They make a call about whether a company has monopoly power in a specific market defined in a specific case.
In this case, the court does not believe Apple is a monopolist in a specifically defined digital gaming market.
That has no bearing or relevance on whether they are a monopolist in some other defined market (or even on a different day in the same market!)
"The Court does not find that it is impossible; only that Epic Games failed in its burden to demonstrate Apple is an illegal monopolist."
Unlikely. While there may now be a legal decision in place it will still be argued whether or not it was the correct one.
The actual ruling is something more like "Epic failed to prove that Apple is a monopoly in the market the judge decided is the relevant market: digital mobile gaming transactions".
Here are the relevant sections of the ruling:
> The Court disagrees with both parties’ definition of the relevant market.
> Ultimately, after evaluating the trial evidence, the Court finds that the relevant market here is digital mobile gaming transactions, not gaming generally and not Apple’s own internal operating systems related to the App Store. The mobile gaming market itself is a $100 billion industry. The size of this market explains Epic Games’ motive in bringing this action. Having penetrated all other video game markets, the mobile gaming market was Epic Games’ next target and it views Apple as an impediment.
> Further, the evidence demonstrates that most App Store revenue is generated by mobile gaming apps, not all apps. Thus, defining the market to focus on gaming apps is appropriate. Generally speaking, on a revenue basis, gaming apps account for approximately 70% of all App Store revenues. This 70% of revenue is generated by less than 10% of all App Store consumers. These gaming-app consumers are primarily making in-app purchases which is the focus of Epic Games’ claims. By contrast, over 80% of all consumer accounts generate virtually no revenue, as 80% of all apps on the App Store are free.
> Having defined the relevant market as digital mobile gaming transactions, the Court next evaluated Apple’s conduct in that market. Given the trial record, the Court cannot ultimately conclude that Apple is a monopolist under either federal or state antitrust laws. the trial record, the Court cannot ultimately conclude that Apple is a monopolist under either federal or state antitrust laws. While the Court finds that Apple enjoys considerable market share of over 55% and extraordinarily high profit margins, these factors alone do not show antitrustconduct. Success is not illegal. The final trial record did not include evidence of other critical factors, such as barriers to entry and conduct decreasing output or decreasing innovation in the relevant market. The Court does not find that it is impossible; only that Epic Games failed in its burden to demonstrate Apple is an illegal monopolist. Case Court does not find that it is impossible; only that Epic Games failed in its burden to demonstrate Apple is an illegal monopolist.
> Nonetheless, the trial did show that Apple is engaging in anticompetitive conduct under California’s competition laws. The Court concludes that Apple’s anti-steering provisions hide critical information from consumers and illegally stifle consumer choice. When coupled with Apple’s incipient antitrust violations, these anti-steering provisions are anticompetitive and a nationwide remedy to eliminate those provisions is warranted.
Are those threads arguing about a legal definition, because if not then this would have little impact on them. Even if they are arguing form a legal perspective, it would have to be within the same legal system as this court and thus could be argued for other legal systems. And even then one can argue the judge is wrong, look at how many judges end up being wrong based on appeal results. Technically you can't be sure which judge is actually wrong, you know which one is in the court that overrules the other, but you can still point out that the disagreement means one of them is wrong even if you can't say definitely which one is.
Why would it? The court basically dodged the question, so we still don't have an answer provided by the court system. Until that happens, we can discuss it to death if we want!
Edit: excerpt from the ruling is: "Given the trial record, the Court cannot ultimately conclude that Apple is a monopolist under either federal or state antitrust laws. (...) The Court does not find that it is impossible; only that Epic Games failed in its burden to demonstrate Apple is an illegal monopolist."
They did not say “we cannot ultimately conclude whether Apple is a monopolist” which would be your interpretation.
[edit] Given the downvotes (really?) I suppose I should add the nuance that all of this is based on this specific case and evidence presented; the case did not conclude that Apple can never be a monopoly (in another case, with other evidence) but that in this case, it isn’t.
> Given the trial record, the Court cannot ultimately conclude that Apple is a monopolist under either federal or state antitrust laws. [snip explanation] The Court does not find that it is impossible; only that Epic Games failed in its burden to demonstrate Apple is an illegal monopolist.
"Having defined the relevant market as digital global gaming transactions, the Court next evaluated Apple's conduct in that market. Given the trial record, the Court cannot ultimately conclude that Apple is a monopolist under either federal or state antitrust laws. While the Court finds that Apple enjoys considerable market share of over 55% and extraordinarily high profit margins, these factors alone do not show antitrust conduct. Success is not illegal. The final trial record did not include evidence of other critical factors, such as barriers to entry and conduct decreasing output or decreasing innovation in the relevant market. The Court does not find that it is impossible; only that Epic Games failed in its burden to demonstrate Apple is an illegal monopolist."
Borski's interpretation is right under the "innocent until proven guilty" burden-of-proof in criminal cases. Bialpo's interpretation is correct in that this Court has not made, as a finding of fact, that Apple is not a monopoly, only that the evidence brought by Epic to this trial does not prove Apple is a monopoly (i.e. another case on this topic may be brought if more compelling evidence is available).
> “The relevant market here is digital mobile gaming transactions, not gaming generally and not Apple’s own internal operating systems related to the App Store,” Gonzalez-Rogers wrote.
> Under that market definition, “the court cannot ultimately conclude that Apple is a monopolist under either federal or state antitrust laws,” she continued.
My main point of surprise is that anti-trust was even relevant in a lawsuit between two private parties. I thought this would only be relevant if the state were trying an anti-trust case.
"the Court concludes that Apple is a monopolist under federal / state antitrust laws"
"the Court concludes that Apple is not a monopolist under neither federal nor state antitrust laws"
Instead, the court went with the third, which to me means "we have not ruled on whether Apple is a monopolist or not, lawsuits welcome". Is that not the right way to look at it?
Leaves the door open for Spotify to sue.
We need strong federal antitrust enforcement. This only worked because Apple is based in California, which has stricter rules.
The argument is not "bigger". It is exactly the same. If we're not a monopoly (Apple), how can we be anti-competitive?
Since other states do not have the same laws of California, the Supreme Court will likely apply Federal Law, not California law, on appeal.
Epic is headquartered in NC, after all. Thus this will fall under interstate commerce clauses, and California law only applies to transactions in California.
> (the judgement) then leaves a bigger argument for reversal on appeal.
is supposed to mean by "bigger argument".
Can someone ELI5 why Apple is considered to be anti-competitive for not dedicating resources to assisting another business in creating a competitor to a market for a platform they and they alone created?
If Epic wants to have their game on a phone, it makes sense they abide by the rules enforced by the company that allows the whole ecosystem to exist. If they don’t like it, they can go and create their own phone hardware and app ecosystem.
Maybe I’m just naive.
There are limits to what you can do in a vertically integrated business stack, especially when you invite third parties to participate in pieces of that stack.
As a consumer, I can't have a phone for every software vendor I want to purchase from, that's obviously ridiculous. If Apple wants to create a marketplace, it has to allow certain things to happen in that marketplace. If the App Store was an entirely separate business not tied to hardware, the restrictions would be significantly less.
(emphasis mine)
Nobody said anything about Apple assisting other businesses. They could easily just let everything be, but instead, Apple is going out of their way to prevent competition.
Imagine if your favorite Linux distro only allowed you to install software from their package repos, and you had to jump through tons of hoops to install software from outside their repos, and adding other repos was impossible.
I know you'd say "I'd just switch distros!", but in the mobile world, you effectively only have two choices.
I don't think anyone is saying that they need to provide support for third-party payment processors themselves, but their rules can't restrict someone else from supporting them.
I don't know why that would be controversial.
Imagine a world where Google required a 30% cut of everything bought through Chrome. How is what Apple's doing any different from that?
If I buy a table, I can choose to stain it a different color, or put a tablecloth over it, or cut the legs off, or burn it for firewood. I have the right to use it however I want for whatever purpose I want, because I own it. For some insane reason bootlickers are willing to throw such rights out the window the moment you try to apply them to computer hardware and software.
What about the sucker that bought the phone? why the company that created the device should decide what the owner can do?
Isn't ironic Apple prevents someone showing you a link to the product webpage and the explanation is that you are too stupid to be let opening a webpage from the app = will they remove the web-browser ?
https://en.wikipedia.org/wiki/Hollywood_Anti-trust_Case_of_1...
What do you even think a monopoly or anti-competetive behavior is?
During the standard oil trials, would you support the argument of "If people don't like it, they can go build their own railroad!"?
Do you simply not believe in any forms of monopoly law? Because your argument could be used in literally any monopoly trial, if you actually believe it.
Famgopolies [1] behave different than monopolies. But they're every bit, if not more, dangerous.
They use their incredible market power and cash piles to enter new markets with ease and put price pressure on the incumbents. It's hard to compete with free. Then all the other famgopolies enter the space too, and it's just a famgopoly watering hole.
Their objective: capturing attention and keeping their users on their platforms longer. They use their platform bubbles to capture a large group of users that will never leave their services. Like Apple users. They're all in a bubble, and if you want access, you have to pay a steep tax and jump to the beat of the their whims.
And this isn't a new kind of monopoly? It's a monopolization in a new sense: they wrap their shroud over individuals and companies and keep them attached at the hip. Switching costs become incredible.
Apple, Google, and Amazon are turning us into serfs. They have a quasi republic going on that they tax and control. You can't start new businesses. You can't escape. If they target your small market, you're screwed.
The DOJ needs to break these companies up into twenty or so smaller ones that don't form a cobweb of entrapment.
Apple/Google/etc fans and shareholders will disagree, but these companies are hurting our industry and soaking up all the innovation.
[1] FAAMG companies with supremely anticompetitive behavior
Some of the prevailing themes:
- These companies are after attention across any vertical a person may touch
- These companies build platforms that scope creep into other platforms and verticals. They connect and entrench them.
- They make it impossible to access consumers without them, and then they tax the entry points
- They make switching costs high
If you want to make your own cereal, good luck; the supermarkets trust the Big Three and are pretty uninterested in flighting something new; shelf space is finite and people don't trust off-brand cereals.
The cereals care more about attention than price-competition. They know it's all the same crap; they want you to care more about whether there's a bear or a frog on the box.
And the same companies that make the cereals make several other verticals too, all carved similarly.
This configuration has not, generally, been considered illegal in terms of market regulation in the US. The standard is harm to consumers, not harm to non-incumbent manufacturers. Your battle to show why either of these spaces should be regulated more stringently is uphill against the default in the US to take a hands-off approach to market activity unless necessary to cure an obvious ill (and the ills here are non-obvious; how do we show the cereal market, or the software-services market, don't look the way they do because the incumbent players have hit on a locally-optimal approach to give value to customers, while customers are satisfied? Amazon, for example, are bastards, but they're bastards that have managed to unlock such efficient distribution and value-satisfaction for their customers that they rendered an entire ecosystem of competitors as obsolete as the buggy-whip manufacturer).
- They make it hard for consumers to shop at other stores. Or repair their devices (bad analogy).
- They're doing all kinds of things a supermarket would never do. Like turning into music and movie studios.
- The really sad thing is that before the giants sprang into existence, you could distribute your software and services without the need for a supermarket. Famgopolies created an artificial warehousing system and forced us all into it.
As a user of Apple, Google, and Amazon tech for decades, I simply disagree on the other two. You'll have to clarify in what way Google and Amazon make it hard to shop at other stores. Google, in particular, enables side-loading on every Android device. Of the three you've named, Apple is the biggest offender, and it appears they have touched the hot stove, unless this Court's ruling becomes reversed. But they touched it in a way that Google and Amazon do not, unless I'm missing something.
I don't think a world where F-droid continues to exist is one where we can claim Google, in particular, is a supermarket that makes it hard to shop at other stores.
- They're doing all kinds of things a supermarket would never do
That's not by itself illegal, or discouraged. Traditionally, companies have considered such expansion a bad idea because they expose themselves to outsized risk in a market downturn. But there are examples of other companies doing that. Sony is a hardware manufacturer and a movie producer. Disney owns theme parks and movie production. Proctor & Gamble make some 90% of what goes in, on, or around the American body and home that you can buy off a store shelf (including many apparently-competing products). ViacomCBS owns theme parks, television studios, book publishing, heavy-industry machinery, and nuclear technology.
- The really sad thing is that before the giants sprang into existence, you could distribute your software and services without the need for a supermarket
I remember, and what I remember is, I think, one of the reasons American law tends to take a relatively hands-off approach in this space.
The user experience from the era you're describing, to be blunt, sucked. Mobile devices, when apps could be loaded on them at all, where hard-to-manage, the apps were buggy, and they were hard to find. Lack of standards, lack of oversight, no trust that any given app wasn't a security mess (or just a Trojan) without something like brand recognition to rely upon. It wasn't just Apple and Google who changed that; we saw Steam come along and regularize the games-on-PCs space, we saw package management get more robust in the Linux ecosystem... People weren't forced into software catalog ecosystems, they ran to them and brain-drained alternatives because most of the alternatives were actively painful.
The government wants to avoid stepping on the neck of a better customer experience inadvertently via over-regulation.
And perhaps most importantly: you can still do that. You can still write an Android app and put it on F-droid, or self-sign it and give users instructions for enabling side-loading. But you won't see the adoption you will in using the big app stores, because the big app stores are a way better experience for most users. Outside of those app stores, discovery, reputation-tracking, consumer communication, anti-Trojan safeguards, etc. are '90s era.
> I remember, and what I remember is, I think, one of the reasons American law tends to take a relatively hands-off approach in this space.
It is a false dilemma that you either have vetted apps with Apple, or unvetted apps.
You could still have other app stores reviewing apps. That would increase competition but still let users choose safety over a Wild West.
And brands who have gone to great efforts to obtain user trust can sell directly.
Sure, manufactures could find small retailers and build a following from there, or find ways to market direct to consumers. But it seems like that is still true, if not even easier in the modern age. So what is different. I ask this not rhetorically, clearly there are differences. Is the scale the difference? Was it always wrong and we just didn't see it a clearly? Is the smaller number retailer the major factor?
For reference, Walmart and Amazon have about 14% and 10% market share respectively. Numbers differ from report to report, but the scale of difference is pretty clear.
There are many authors that have been exploring the economic aspect of platforms. As such nowadays that phenomenon is know as "platform capitalism" in literature due to Nick Srnicek's 2016 Polity book of the same name. [1]
[1]: https://theceme.org/richard-godden-platform-capitalism-nick-...