If the result of this case is "you can have a monopoly as long as your device and ecosystem are 100% locked down", that's terrible!
Monopolies aren’t illegal. Only the abuse of a monopoly position to advance your interest in other markets is illegal.
E.g. It’s not illegal to be the only seller of gasoline in the country. It is illegal though to bundle laundry powder with gasoline sales to corner the laundry powder market.
For one thing, the jury is probably more technically savvy than the judges that will ultimately decide this case.
Blocking all other means of distributing apps in a reasonable way absolutely should have been enough to get Apple sanctioned. Blocking alternatives with economic incentives is now forbidden, but blocking the access using code is allowed. This is stupid.
But sure, jury trial. And also US judges in this area are especially broken, with their warped understanding of when a monopoly is harmful.
---
Of course the other part of this is stupid as well. It should be illegal to have a monopoly, and it's the job of the government to break monopolies to enable competition. The US has it completely backwards here, and this is a big reason why that country is failing in key areas of economic development and infrastructure.
America's failings in economic development and infrastructure are not strictly caused by monopolization of the economy. South Korea's economy is run by like three chaebols[0] but they have working infrastructure. The problem with America is that we have a government that doesn't like to spend money, plus a group of illiberal, antidemocratic NIMBYs who make budgeting impossible by jacking up the cost of projects after they've already been estimated and committed to.
Since I already shat on the Libertarian Party, let me shit on the Democratic Party next. California and New York have legal climates that are unusually hospitable to NIMBYism. They figured out how to weaponize environmental review laws, to the point where actual reports about environmental infrastructure necessary for mitigating or surviving climate change say that we can't build the infrastructure because it'll get tied down in NIMBY red tape. In California this manifests as delays, cancellations, and massive wind farms in Wyoming; in New York it's cost overruns as bribes are paid to whoever can look the other way to get things passed through. Either way we can't build shit in our most populated states.
If there's a root cause for all of this, it's "vetocracy". In a democracy, when a decision is made, the people on the losing end of this decision agree to lose. However, since at least the 1970s, there has been several parallel movements to roll back decisions already made and form new mechanisms to prevent new decisions from being implemented. Antitrust was a rollback, NIMBYism was a new mechanism, but in either case, we're being dragged out of our brief experiment with liberal democracy by people who stand to gain from it.
[0] The Korean for Zaibatsu[1]
[1] The Japanese for Chaebol[0]
Some parts of that infrastructure seem to be having serious problems now:
This is not really what the courts said (and to my knowledge the people who said it weren't members of the Libertarian Party or Austrian Economists).
The actual quote from the Supreme Court is, "It is competition, not competitors, which the Act protects."
The idea here is that, for example, if Walmart can undercut you on price and you go out of business, that's harm to competitors but not competition, because Walmart is only able to do that by offering the same product for a lower price. They can only do it by competing, and only for as long as they continue to outcompete the alternatives. As soon as they tried to raise prices or reduce quality, competitors could spring up to take the market from them.
That isn't what Apple is doing. If you want to offer an app store for iOS that only takes a 5% cut, Apple will actively interfere with you -- and then they take a larger cut despite the existence of prospective competitors willing to take less. That's not consumers choosing the incumbent because they're the most competitive, it's the incumbent preventing consumers from having a choice. It's harm to competition.
For example, two parking garages across the street from each other are strong substitutes. You can easily pick either one based on e.g. which has the best price. But a parking garage in New York and a parking garage in Boston aren't in the same market, because you can't reasonably park your car in New York and get out and walk to your destination in Boston.
You can easily have viable substitutes for app distribution on any given platform. Windows has a first party store but you can also install apps with Steam or download them from the developer's website. The Windows store and Steam are in the same market, so neither of them has a monopoly on distributing Windows apps. The same as two parking garages across the street from each other, or a Walmart and Target in the same mall.
If the operating system prevents competing app distribution methods, there is no longer any viable substitute for the official one. This is what the OEM wanted, right? No competition for their app store -- no substitutes, a monopoly. But then that's just what it is. You don't have to monopolize markets ancillary to your primary one, but if you do, you have.
We're talking about the market for app stores, not the market for phones.
> But again if you redefine the market to Apps you can install on IOS then certainly that's a monopoly. I just question if that's a reasonable way to define the market.
But why? You haven't provided any reasoning.
Apple's store and Google Play aren't in the same market because they aren't substitutes -- you can only use one or the other depending on which type of device you want to install the app on. That isn't a law of nature -- Apple could offer Android apps in their store and stop preventing Google Play from distributing iOS apps. But they don't, and because of that they're not in the same market.
But once four or five different competitors have tried, had Walmart drop prices again to undercut them, and gone out of business, no one else is going to try because they'll know they're doomed to fail.
Competitors are required in order to have competition. The Chicago School interpretation of antitrust is as intellectually bankrupt as it is morally.
Suppose Walmart has the lowest price for batteries. The local hardware store goes out of business. Now Walmart doubles the price of batteries.
The local grocery store is going to start selling batteries. Walmart has to lower their price again or people will buy them there instead. If they do, the grocery store will still eventually sell their stock to customers who value convenience over the lowest possible price. They may not restock them unless Walmart raises the price again, but as soon as they do, batteries are back at the grocery store.
If Walmart never raises their prices the grocery store may never start carrying batteries, but then Walmart can never raise their prices.
Lol, what?
I'm from Northern Europe, where running a 3% deficit is seen as edgy and daring.
"In FY 2023, the federal government spent $6.13 trillion and collected $4.44 trillion in revenue"
There's a name for that condition: corruption
It is a societal disease that is vicious and hard to get rid of. It makes bad situations worse even when everyone says that they agree on a solution and want to make it happen.
Antitrust laws are one way to prevent and maybe even remove corruption, but they only work if the people writing the laws and enforcing the laws are not corrupt.
I don't think that's stupid. Blocking access using code is an honest act. Everyone knows the rules and can build their business accordingly. Blocking alternatives with economic incentives is manipulative. It gives the impression that the platform is open to competition, when it isn't.
Therefore, I support the Mexican drug cartels
Separately, that's kind of a gross choice of comparisons.
"Apple doesn't offer an App Store market" is just assuming the conclusion. Nobody expects you to get competing app stores from Apple -- you get them from Apple's competitors. What Apple ought to be in trouble for is interfering with their operating system customers' ability to patronize competing app stores.
This isn’t illegal. Equivalent to a “No outside food and drink” sign or not letting randos sell things in your own storefront
It’s not illegal just because you don’t agree with the philosophy of a closed ecosystem
In that case, someone else owns the storefront. I own my phone, not Apple.
If Apple would like to claim that I merely lease my phone, they need to update all their marketing so it isn't misleading. They should also be on the hook for repairs (without AppleCare), and all the other responsibilities that typically accompany a leased product.
Your phone isn't Apple's storefront. Their storefront is. Prohibiting their customers from patronizing any other store is clearly anti-competitive.
> It’s not illegal just because you don’t agree with the philosophy of a closed ecosystem
It's not legal just because you agree with the philosophy of a closed ecosystem. "A closed ecosystem" is inherently anti-competitive and should be illegal.
Really?
When you buy food from the grocery store, the grocery store goes to your home and physically prevents you from also eating food from a different store at the same time, in your own home?
When people buy a phone, they own it. They are using it in their own home.
No, a grocery store does not force you to only eat food from them, in your own home.
They do not prevent you from mixing milk from their store with cookies from a different store.
They appear to have ruled that Google has a monopoly because they’ve been squashing everyone else who should have been able to make an App Store by Google’s policies.
Apple isn’t squashing anyone, they just don’t allow it in the first place.
So I don’t think this would apply to Apple because of the line of reasoning. I know most people on hacker news think Apple should be forced to allow alternate app stores, but I don’t think this ruling can be used for that. It appears you would need something else.
It becomes an issue for the legislature to fix. Not the courts.
Rather think about this as Google lost, Android won. If this ruling goes trough, Android becomes an more open platform by default. Think about it: Steam, itch.io and GOG stores on Android.
The only thing that will be clear is that Apple got it right the first time by not allowing other app stores.
You might have a few stores but they will largely compete with each other, reduce prices, and offer freebies.
Fuck the App Store. I want to use steam.
Wildly different claim from “every game will have its own store”
Two markets ARE at play for consumers: mobile phone hardware (with OS) and mobile app stores/apps. Apple is using it's monopoly in the former to create/enforce a monopoly in the latter.
You can tell there are two separate markets because you, the consumer, make (at least) two separate purchases to participate.
The whole argument is that Apple is leveraging the position in one market (hardware) to gain advantage in another market. Your answer is "competitors can always build their own hardware" don't you see that this is a nonsensical argument?
Apple decided where the boundary of competition lies by deciding to bundle their phone, their operating system, their app store, and their code signing policies into a package deal. A thicket of copyright laws forbid you from unbundling any combination of these. For example, I can't legally run iOS on my Pixel 8 Pro. It is legal to run Android on an iPhone, except the hardware boot ROM is designed to reject anything not signed by Apple, and Apple won't sign Android. You can circumvent that by taking advantage of security vulnerabilities in the boot ROM[0], and that's legal, too, but you can't legally tell anyone about those vulnerabilities because telling people how to break copy protection is a felony.
This same logic applies to application software. It's legal to jailbreak[1] your phone to install non-App-Store apps, but illegal to provide the jailbreak tool necessary to install those apps. If Epic had decided to release a jailbreak to install the Epic Games Store, instead of releasing a hotfix for third-party in-app billing and suing for antitrust, Tim Sweeney would have been thrown in jail for violating 17 USC 1201.
In copyright law, there's a concept of copyright misuse, which is what the courts call using copyright to break antitrust law. Copyright allows you monopoly control over your work, but you are not allowed to use that control to maintain an illegal monopoly that's outside of the copyright bargain. In other words, you don't get to opt-out of forms of competition you don't like. Congress decides those.
So no, "build your own phone and app store" is not enough. And letting Apple dictate the conduct of their competitors is effectively giving them antitrust immunity.
[0] Which are, BTW, once-in-a-decade. We've had a grand total of two bugs that can be used to install alternative operating systems on an iPhone.
[1] Jailbreak bugs aren't as scarce as boot ROM bugs, but they've been getting scarcer over time. This is not because Apple is doing a good security job, but because the NSA is hoarding all the good bugs for themselves.
I my opinion the two markets are: Providing apps on iPhone, and offering payment processing for apps on iPhone. Apple is using its absolute monopoly on providing apps to also entrenched itself in the market of providing payment for apps.
I mean, it's far more than that. Most importantly:
>Historically they have been held to include exclusive dealing, price discrimination, refusing to supply an essential facility, product tying and predatory pricing.
While IANAL - even as a plebe I can pretty easily tie refusing to allow third party app stores to both refusing to supply an essential facility, and product tying.
Why should my choice of hardware or OS dictate the apps I'm allowed to install? That's 100% product tying. It would be one thing if third parties just had no interest in supplying an alternative app store. It's another thing entirely to lock them out via your monopoly on the ecosystem.
For tying, while not a firm ‘rule’ the most common application of tying is limited to the ‘tied’ product being from another market when compared to the ‘tying’ product. Also, the current appellate court standard (worded semi-informally) is that a tying of products raises antitrust concerns when it restricts competition AND provides no benefit to consumers.
As to essential facility, the most impactful factor for the plaintiff (as in the hardest burden for the government to overcome to establish monopolistic abuse) is as follows: the plaintiff is REQUIRED to prove that the compelled permission to competitors to utilize the “facility” does not interfere or allow for detrimental effects of the dominant firm’s ability to serve its own customers.
Apple’s historic marketing speak and other ‘on the record’ statements about the app store’s exclusivity ensuring tight control for the security of Apple’s customers is directly written to advance defenses to these two claims.
You can certainly argue that Apple’s conduct is characterized as abuse of monopoly, but there arguments against that can also be compelling.
The above IS NOT and should not be considered legal advice.
Do you own an iPhone? I suspect that the vast majority of people complaining about Apple's "lock down" are people who don't even use an iPhone.
If you do own an iPhone ... why the heck did you buy one knowing its limitations. It's like buying a pink shirt when you hate pink, despite the availability of shirts of other colors, then going to the manufacturer to complain about the color.
> why the heck did you buy one knowing its limitations.
Because:
• Almost everyone I know uses iMessage exclusively.
• I very strongly dislike Android's UI design.
• I strongly prefer iPhone hardware.
Any two of these would be insufficient to offset how furious I am that I can't decide what code runs on my own damn phone! But taken together, Android just doesn't make sense.
I jailbroke my iPhone for years, despite the many inconveniences of running an outdated version of iOS, but Apple's security has just become too good.
So for example, if you had a dominant market position for a particular category of phone operating systems, and you wanted to advance your interest in the market for app distribution...
Paying off gamedevs would be analogous to paying off dough-makers (or doughnut bakers?) to only supply your store, and not your competitor, which would be super illegal. AMD sued Intel for very similar activity, and won.
Epic as a game store is very much not a monopoly by any means. Game consoles are certainly an argument, but thus far none are dominant over the other. It would mostly be a problem if a new console jumped in and Sony/Microsoft teamed up to hardball it out.
Isn't the resolution the same in each case? If you have an iPhone and you want to install an app from another store, you have to buy another phone. It's the same with these deals with Android, just overt.
Apple prevents that I bring an outside donut from competitor's, while Android allows it. That is basically the difference.
I only know of the concept of Corkage, where you pay the restaurant a fee if you bring your own wine to drink:
https://www.webstaurantstore.com/blog/2626/corkage-fee-guide...
> A corkage fee is the price charged to guests who choose to bring their own bottle of wine to a restaurant. Corkage fees usually exist at restaurants that already serve wine. The practice of allowing guests to bring their own wine is considered a courtesy to guests. … The average corkage fee ranges from $10 to $40 per bottle but may be as high as $100 or more.
Or you know, they don't care as long you're a paid customer.
BTW, I didn't say anything about restaurants. Coffee shop in general have much more of a lax atmosphere, so they generally don't care too much.
Some do, some don't. In my experience, Starbucks couldn't care less as long as you buy a coffee (and even then couldn't care less. maybe a restaurant would care more but it's on bar logic: they don't mind lending seats until paying customers come in). Smaller shops tend to be more strict about doing that kind of thing.
Seems to me the analogy holds.
What percentage of people do you suppose carry two different phones in their pockets? Is this something you reasonably expect the majority of people to do?
> Apple preventing other app stores on iOS is more like Starbucks preventing Peet's from coming into its stores to sell its coffee.
Just look at your own words. Preventing other stores is like preventing competitors from selling in your store?
Preventing other stores is preventing other stores. You can put whatever you want in your store, they put what they want in theirs, and the customer gets to choose where to get their app.
Preventing the customer from using the other store is the anti-competitive thing being objected to. It doesn't need an analogy, that's literally what it is.
It is anti-competitive to prevent competing stores. How you do it is irrelevant.
and their OS. I don't care if they allow whatever on their store. I would like the option to go to other stores or even sideload my own apps without the store intervention. That's right now impossible without a) hacking the device or b) being a dev working on an app.
So IOS may one day not be considered a starbucks, but a park. And you can't hog a park to yourself
People that are not employees of the company that holds dominant market position.
Except the App Store was added to the iPhone before it reached its current level of ubiquity.
I believe Apple views the App Store as a feature of the iPhone that contributes to its value - the huge variety of apps available definitely contributed to the iPhone’s success; see the Windows phone for an example of a phone without a good App Store.
fwiw I completely agree, but isn't this the inverse of the argument people make for why Apple deserves 30% of app revenue? Do app devs deserve a huge chunk of iPhone revenue since they contributed to its success?
Why should that matter?
> I believe Apple views the App Store as a feature of the iPhone that contributes to its value
If people prefer to install apps from Apple's store they're free to do so. That doesn't require them to prohibit other stores -- let the customer choose.
> the huge variety of apps available definitely contributed to the iPhone’s success; see the Windows phone for an example of a phone without a good App Store.
You're referring to the platform's selection of available apps. That is something different than the method of distributing them or whether it has competitors.
They all have closed application ecosystems and don’t allow third party stores.
they can, but they don't. Part of their argument seems to be that mobile is now a general purpose computer like Windows so it should open up. The big 3 consoles don't try to pretend that you can make host much more than games and movies on their devices, and the consoles operate on much thinner margins than the mobile market.
You can say it's cynically about money and that Google/Apple are the biggest targets. You can optimistically say it's that Epic knows consoles do more to deserve their 30% and aren't just gatekeepers (there is a LOT more support for AAA devs from the big 3 consoles than anything Google/Apple offers. Including direct help in porting if you strike deals).
We're seeing more handheld PC's, but the days of the Vita or 3DS as dedicated handheld consoles seem to be past us. There's a non-zero chance PC far in the future does the same to regular consoles too.
It's one thing to say "this is how the law should be, so that Apple should have to open their platform"; it's quite another to say "as the law is right now, Apple should have to open their platform."
If the courts get it wrong then you have to go to Congress, sure. But then you're in the same place -- convince Congress that it's bad.
Either way we're having a debate about whether it should be allowed. And the answer is no -- this business model is anti-competitive, for any business, and if existing interpretations of the anti-trust laws don't currently prohibit it, they should.
And still Apple is the one being sued.
The way that anti-trust law works is that if you have more market power, like Apple clearly does, then you are even more subject to the law and required to do certain things.
But also, if you disagree, then feel free to sue those other groups.
Being charitable, these are two different juries. It's a little annoying that, in a country where iOS is the dominant OS, the iOS monopolist is exonerated and the non-iOS monopolist is recognized- nonetheless this is still a big win for consumer rights.
Just this part alone would applies to Apple the same way
It should be though. Unchecked monopolies, duopolies and oligopolies are antithetical to a free market economy - they stifle competition and make the market un-free as well:
- for employees, they're bad because monopolies (or cartels) suppress their freedom to go to a better employer. The best case to look at is actually the tech sector, where large corporations colluded to keep compensation down [1], but there's also more evil cases like WalMart that go as far as underpay their employees so badly that they can only survive on food stamps [6].
- for suppliers, they're bad (in the correct term of a monopsony) because having only a few (or only one) buyer depresses their ability to get fair prices for products, e.g. in agriculture [2], or in WalMart [3][4]
- for customers, they're bad because they can't (realistically) go to alternatives, especially if the monopoly in question has extinguished competitors by advantages of scale - again, WalMart is a nasty example [5].
- for society as a whole, they're bad because, again, large actors like WalMart can devastate vibrant community centers like malls, leading to dereliction of entire neighborhoods in a domino effect [7], and eventually the erosion of local tax bases, leading to funding issues for basic government services.
[1] https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...
[2] https://usceconreview.com/2022/07/06/america-where-even-sust...
[3] https://www.businessinsider.com/wal-marts-suppliers-feel-pre...
[4] https://www.wsj.com/articles/wal-mart-ratchets-up-pressure-o...
[5] https://www.investopedia.com/terms/w/walmart-effect.asp
[6] https://www.cnbc.com/2020/11/19/walmart-and-mcdonalds-among-...
[7] https://www.cnbc.com/2020/06/20/how-mall-closings-in-america...
Some markets only support a natural monopoly though. If you forcefully break up every monopoly you'll always be in court, because after winning the case and breaking up a company, the next natural monopoly will form within a few years.
The best compromise is to only go after them if they're abusing their position. I agree the standards for that are too low though.
I think there are a lot of laws about this. Guys get nicknames like "The Trust Buster" for going after them.
(Not that meal kit companies would be paying Apple 30%)
A typical customer lifetime might be somewhere between a year and two years, unless you happen to be a giant like Netflix.
Let’s say you expect your customer to churn after 14 months, so that means you only enjoy 2 months of Apple’s reduced royalty rate. Your total average rate is 27%.
This concept is why many sunscription services are able to offer lifetime subscriptions. They have already figured out what one customer is worth based on churn rate, so the lifetime subscription is set up to be a price that matches or exceeds that number.
A locked garden is a locked garden. But a locked garden that you go into knowing it's a locked garden is better than a locked garden that advertises itself as open and then locks you in. Both are locked gardens; one is also false advertising.
Out of curiosity, say that I'm not a techie that knows all about Apple vs alternatives ... and say I'm interested in buying Apple because I like the aesthetics of the device or something. Is there anything actually explicit in Apple's marketing that makes it clear to the consumer that they are buying into a "locked garden" ?
Part of this discussion has to do with definitions and what we're talking about, specifically. It's common in other industries to find yourself with some degree of vendor lock-in for "compatibility." I bought some high end Canon camera lenses, for example, so I have zero expectations that I can use those lenses with a Sony or a Nikon. I tend to buy Dewalt tools because I own Dewalt batteries etc.
Here we're talking about the "App Store." I don't know that it would register on the average non-techie's mind to assume they would have options ... but us techies know that the "locked garden" tends to mean "you're buying into the Apple ecosystem of products and will likely be stuck only buying Apple products for compatibility sake." Non techies might assume that because they assume that everything works that way. But is Apple making this extremely clear in their marketing so that people who don't assume would know up front? I'm genuinely curious since I don't buy Apple products.
If I must be in a walled garden, I'm choosing the better kept one. Android is quite simply inferior, I tolerated it because it gave me relative freedom but there's no reason to tolerate it any longer.
The PKI industry is a good example of this.
The Certificate authorities have to abide by standards and any misbehaving Certificate Authorities can be removed.
I'd argue the integrity of the PKI industry is just as important, if not more so, than App Stores and they have managed to maintain a device agnostic market with healthy competition.
- Ben Franklin
I can, and I don't mind. Let it happen. Computer freedom is more important than preventing scams and fraud. Just have the corporations and banks eat the losses instead. God knows these trillion dollar corporations can afford it.
If that's not enough warning for someone then they probably shouldn't have a smart phone, or if they do it should have strict parental controls on it (blocking 3rd party installs, most sites, and phone calls/texts).
There have been many such cases.
The rule of thumb, in a very simplified way, is indeed that you can have a monopoly as long as you don’t actively leverage that power to stifle competition.
That’s not a result of this case but a result of all the jurisprudence leading up to this case.
And to a certain degree, that makes sense. The alternative, making all monopolies illegal, would cause too much havoc because it would affect almost everyone putting out a product.
Say, for example, you’re a newcomer in the market of smart thermostats. By definition, you have a monopoly on your thermostats. If monopolies are by definition illegal, regardless of circumstance, you’d have to allow Nest to put software on your thermostat advertising their products.
That’s an undesirable outcome, if only because it makes it harder for you to compete in that market.
Apple doesn't allow other stores to exist on their ecosystem. That's a problematic monopoly, because competitors can not exists.
That's different from what you are saying: other companies are allowed to create smart thermostat and compete against Nest
What's really important is the power play: your company should strive to hold a comfortable and stable monopoly position in a meaningful market (meaningful to you), while the government's role is to watch over all the businesses so that large numbers of people are not under heavy influence of external forces and not made unhappy. If any product exploits its monopoly by shifting the power from the government or making people sad, then gov steps in and interprets the rules in the way to correct this. Or, the gov is corrupt and helps keep that monopoly going :-)
To your second point: people are sad that we can’t have cheaper and better software on iOS. It’s a poor UX when an app makes me go on my desktop to sign up for their paid service. It negatively impacts consumers and only exists because Apple is wielding its monopoly.
So every store is a monopoly? You are going to have to be a bit more rigorous than adding “-place” and call it a day.
This is why monopolies aren’t illegal per se, and it requires a couple of components for it to venture into unlawful territory.
One is that the monopoly is powerful enough that it can be exerted to pressure other parties in an anti-competitive way, and another is that that power is actively used. There are more, but for the sake of simplicity, these are the important ones in this debate.
Disallowing competitors to exist, in this case, means passively making it possible for competitors to exist.
The omission of an act (passive) will never be as substantial as an indicator as an active act to quash competition.
The App Store hasn’t changed much since its inception. Commission rates have decreased since its inception, making it harder to argue that Apple is squeezing developers now that it has more power.
The analogy with the thermostat hypothetical is accurate. If I create a new smart thermostat startup, I create a new market, the software distribution on the thermostats I manufacture.
This is analogous to the market definition people use to argue that Apple is violating antitrust laws. If it makes it easier to grasp what I'm saying, then instead, imagine I start manufacturing a new smartphone.
They launched the iPhone and, by doing so, created a new market, the iOS app distribution market.
The only difference is that the iOS app distribution market has grown exponentially, but the relevant legal realities are the same. The law currently doesn’t have a mechanism to say, “Ok, now you’ve grown, so now it’s illegal.”
Instead, it looks at abuse of power, where acts weigh heavier than the omission of acts.
The main difference between the Google and Apple’s case is that the former went out of its way to stifle competition by making demands and setting requirements (akin to Microsoft back in the day).
Some now say that the only reason this difference exists is because Apple doesn’t have to pressure others like Google did, but that’s not a difference to be shrugged away. It’s an essential difference.
It makes the difference between one giant who throws its weight around and another who never had to do that because the terms have been the same from the get-go (however favorable it was for them).
It is for that very reason that the Google case won’t have much bearing on the Apple case.
Google and Apple are a duopoly that controls one of the most essential devices of our time. Their racket extends more broadly than Standard Oil. The smartphone is a critical piece of modern life, and these two companies control every aspect of them.
- Tax 30%
- Control when and how software can be deployed
- Can pull software or deny updates
- Prevent web downloads (Apple)
- Sell ads on top of your app name or brand
- Scare / confuse users about web downloads or app installs (Google)
- Control the payment rails
- Enforce using their identity and customer management (Apple)
- Enforce using their payment rails (Apple)
- Becoming the de-facto POS payment methods (for even more taxation)
- Partnering with governments to be identity providers
- Default search provider
- Default browser
- Prevent other browser runtimes (Apple)
- Prevent browser tech from being comparable to native app installs (mostly Apple)
- Unfriendly to repairs
- Unfriendly to third party components (Apple)
- Battery not replaceable
- Unofficial pieces break core features due to crytographic signing (Apple)
- Updates obsolete old hardware
- Green bubbles (Apple)
- Tactics to cause FOMO in children (Apple)
- Growth into media (movie studios, etc.) to keep eyeballs on their platforms (Apple)
- Growth into music to keep eyeballs on their platforms
If we compared the situation to auto manufacturers, there would be only two providers, you could only fuel at their gas stations, they'd charge businesses every time you visit, they'd display ads constantly, and you'd be unable to repair them without going to the provider.
There need to be more than two providers. And if we can't get more than two providers, then most of these unfair advantages need to be rolled back by regulators.
This is horrific.
You might be able to blame Apple for starting this and continuing it on their phones, but I don't think Google is pushing Android handset makers to do this at all, just like I don't think Google is pushing Samsung (and maybe some others) to eliminate 3.5mm headphone jacks on their phones. Unfortunately, I think this is one of those things where the whole industry is just copying each other. Non-removable batteries are better for manufacturers for various reasons, but bad for consumers, and they've conned consumers into accepting it.
>Unfriendly to repairs
Same here. Nothing is keeping Android phone makers from being repair-friendly.
>Updates obsolete old hardware
This is Apple-only. The Android counterpoint is "Updates simply cease after 2-3 years, leaving you with security vulnerabilities that won't be fixed", but here again it's the fault of the handset makers, not Google: they're just too lazy, and Google is too stupid and short-sighted to force them to support their phones longer-term to improve the Android brand image.
It's so sad that a company that resorts to those kinds of tactics to increase their market share, as opposed to, just selling more of their product because it's a superior product.
Also, the OS developer acting as a gatekeeper is necessary to prevent malware from getting onto devices. Without that, you have Windows where black hats trick the average user into installing malware constantly.
Almost everything you list is actually a positive thing, although I would be wasting my time to explain it to people who should take the time they put into complaining into developing their own competing platforms that align with their ideals. Please do put your energy into making a competing platform. We need more choices at the operating system level, and nothing people hope these lawsuits would accomplish would give us that.
If Windows and MacOS imposed the same limitations, entire classes of software would stop getting distributed. Games would no longer be profitable enough to ship or diverse enough to compete in terms of profits. Professional software/plugin developers like Pro Tools, Panic! and U-He would lose the software margins they enjoy today and potentially stop supporting new OS releases. It happened already on MacOS after the depreciation of 32-bit apps and OpenGL.
> the OS developer acting as a gatekeeper is necessary to prevent malware from getting onto devices
You say that, but then viruses like Pegasus show up using nothing more than first-party Apple services. It's a bogus fearmongering tactic that cannot be used to justify not giving people a choice. User exploitation will exist as long as the user has enough power to act against their own interests. You'd have to remove the phone functionality to make a safe phone.
> Almost everything you list is actually a positive thing
> nothing people hope these lawsuits would accomplish would give us that.
Interesting, you sound incredibly desperate to dismiss the idea that legislation could fix this problem despite a lack of evidence. Wanna expand on that?
Google is paying hardware manufacturers to use their search and for exclusivity with their store. Both of those are more or less explicitly to keep out competition.
Apple cut a deal with Netflix but what competition does it squash?
These are just different issues.
Anticompetitive behavior can be downstream of stuff like this, even if Apple isn’t actively quashing something but merely making it way easier for certain places to absorb the costs (especially if the deal was only offered to Netflix but not to other platforms).
Its not a ironclad argument by any means but its something
That’s what Google did according to the verdict. They paid money to stop competitors.
In fact Apple negotiated that deal to keep Netflix on the platform because Netflix wasn’t happy paying 30% (surprise). It’s not good that they’re playing favorites secretly, but it’s not the same thing
And Apple had previously explicitly stated in its defense that everyone got the same deal.
Towards other streaming services?
Yes.
The law doesn't say you have to give everybody the same deal just because it's "unfair" to others.
The monopoly/antitrust/etc. laws are about misusing a position of power for your own benefit at the expense of competitors. Apple doesn't have to be "fair" to Netflix vs Max vs Disney Plus.
The whole 30% fee is premised on providing services to app makers for money.
But they lied.
Without saying too much, I have personally witnessed such a deal at company with a measly 2-3 million app downloads. We had a physical product in the Apple Store that was doing very well. Our sales guy somehow negotiated lower IAP fees in exchange for higher cut or exclusivity of our retail product. Everything is negotiable if you have leverage.
> Netflix stops offering in-app subscriptions for new and returning customers on iOS
https://www.theverge.com/2018/12/28/18159373/netflix-in-app-...
Apple allows companies that have a free app used to access subscription content to sell the subscriptions on their own website without giving Apple a cut.
Netflix used to allow you to pay though Apple to reduce the sales friction of needing to set up billing through the Netflix website, but they stopped letting users pay through Apple years ago.
On the other hand, Google is trying to manipulate the market to gain an advantage over competitors on non Google hardware running Google software.
On the Apple side of things, the full vertical is Apple. That is not the case for Google.
Google said you could start your own App Store and then secretly undermined people who tried to start their own App Store.
That’s what they got in trouble for. There is no evidence of Apple making backroom deals to prevent people from doing things Apple said they could.
You don't have to buy an iPhone, this isn't like a railroad or a telecom that owns all of the possible infrastructure. If you want a walled garden get an iPhone. If you want freedom with all that implies, go Android.
You can provide a walled garden. But that's not Apple does.
Instead, Apple is a mafia that shakes down all the vendors for the right to sell in their semi-open market square.
If Apple iOS were a walled garden, it would have contained only Apple applications.
Even using Apple, you can't do this, because you need a separate Android and iOS app already.
Big picture though, I don't think you really have a "right" or entitlement to just access everyone.
You're not entitled to use someone else's business, even if it's a good one. You can't just go and sell your product in the AT&T store, you need to agree to their terms. Even if you make a phone that only works on the AT&T network, you still need to agree to their terms.
You can't sell in Target or Walmart or Costco or even Amazon just because you want to. Oh and you may be quite disappointed to discover many of them take >30% cut too.
Apple thinks of the iOS App Store as another storefront, and you need their permission to put your product on their "shelves". The courts agree.
Prior to the 1980s, AT&T, as the dominant telephone service provider in the United States, had a policy that only allowed customers to use telephones that were leased from them. This policy was rooted in the belief that non-AT&T equipment could harm the telephone network. Does that sounds familiar?
Several legal cases (and the eventual breakup of AT&T) eventually opened up the AT&T network to third party phones and consumers rejoiced.
And yet you can literally pick up a phone, dial some numbers, and reach everyone else who has a phone number.
And yet you can literally pick up a [product engineered to a phone company’s specifications], dial some numbers [assigned by a phone company] and reach everyone else who [also agreed to the phone company’s TOS] [as long as you and them have paid a large monthly fee].
This isn’t freedom. Companies still decide how you can use their services.
The sneaky part of Apple's counterargument is that they try to apply your argument not to their own App Store, but to the entire OS. This is a land grab - the App Store is their service, but I own the phone, so the OS should respect my decision to circumvent Apple's curation if I so choose. If I'm not allowed to sell in Target or Walmart, I'm allowed to open my own store and people can circumvent Target to go to me directly. This is how it works for every other form of computer except phones and tablets.
But only because macs existed before they were able to get away with this. I would bet a huge amount of money that if macs were invented/created after the iphone, they'd be locked down exactly the same way. And many of the same people who love it on the phone would love it on the computer, even though now they would say that it's a general purpose computing device not an appliance like the phone is.
They can't shake down someone out of their reach.
They can identify them though ( green icon... )
I agree. However, consumers have the right to go to a different supermarket, without selling their house.
We can take these analogy absurdities wherever — the harsh reality is that nobody is stopping someone from building an open ecosystem phone. But there isn’t enough demand.
As a consumer, why should I care? As a company, unless I’m building my own walled garden for company phones, why should I care? What’s the market here?
I don't think there's too little demand, I think there's too much profit incentive in the other direction.
Only a tiny number of companies on earth have the resources to build a successful mobile platform. If you are lucky enough to be one of those companies, you're not going to leave money on the table.
The harsh reality is that manufacturing capacity and network effects actually prevents building an open ecosystem phone. You will never be able to purchase the best chips and displays.
I think we need to stop pretending that regulating competition is a bad thing. Competition is what makes capitalism work as an economic system. Without competition capitalism is inefficient and harmful. If we can inject more competition into the system as a whole, wherever possible, it's going to be good for consumers.
Consumers bought this house with their eyes wide open knowing that they can only access one supermarket.
There are billions of iphones out there. Unless you're working with data (which you should share) then your anecdotal experience from talking with other tech literate people is so ridiculously non-representative that it's hard to even visualize.
Might want to Google "Confirmation Bias"
Edit: I suspect I’m wrong, adding it probably causes their assumptions to be given more weight for no reason, as happened here. Interesting observation, that’s in line with the research that disclosing conflicting interests actually causes people to weight the compromised advice more highly than they otherwise would.
It's to the point where you can't look up local government apps here without getting some advertising garbage in the results first because Apple started selling app space.
Apple doesn't have multiple competing stores. It has ONE store.
And if you are a software vendor that makes mobile apps, you HAVE to support Apple or you will go out of business.
When I first started, I used to think of Apple as the best option available to me. Now I think about it as the least bad option. The cost of leaving involves so much time and money, that it’s not a realistic option.
DVDs come out. Now I have to rebuy all my VHS movies on another platform...
When someone comes to your store and says "I made the streets and regulate the power, water supply, sewer, and everything else in this place, cut me 30% of your revenue in taxes" that's the government.
And you'd do well to not confuse those so haphazardly. Apple didn't come to your app and with no cause blackmail you to get your money. They created an ecosystem that did not exist before, and they have to maintain it. Paying for it is completely rational.
That's exactly what Apple does. If you make a mobile app (for example, a presentation manager) you _have_ to support iOS, or you will go out of business.
As a developer, you simply don't have a choice. You have to either support iOS, or get out of mobile apps entirely.
What? That’s not true. There are plenty of Android-only developers.
Fortnight is the only example, and it's on its way to SCOTUS. Google apps, which one?
Beeper Mini replicates native iOS functionality - it's obvious why it can only exist as an Android-only app.
Fortnite is the product of a massive studio, whose decision of not publishing it on iOS was deliberate as part of their anti-monopoly lawsuits. They can easily afford to do it because Epic Games has other revenue sources, alongside with running Fortnite on pretty much every other platform imaginable.
Google doesn't really cash in on their more niche apps, publishing them on iOS is unlikely to change anything for them. However, not choosing to publish them gives Android - their own product - a tiny boost in appeal due to exclusive functionality.
But anyway, you said "As a developer..." not "As a major developer...".
By your logic there would be no towns, cities, countries, unions, companies, any kind of organization at all. Because any time you need to pay for something, you feel like it's the mafia.
- Is it the mafia when it comes time to pay time for rent. "I HAVE to pay rent or I'll be kicked out on the street!"
- Is it the mafia when it comes time to pay your bill at a restaurant. "I HAVE to pay my bill or I'll be hungry!"
No one owes you anything. You ask for money for your apps, don't you? Because why are you complaining otherwise? 40% of $0 is $0, isn't it? But you require money, despite maybe someone could be like "you're mafia unless I can play your game for free".
Things cost money. Grow up and start acting like an adult.
Are you a part of mafia? How else would you defend Apple that is bent on destruction?
If you want to charge money, Apple will collect it for you and take a cut. If you don't want that deal, you can still distribute your app for free, you just can't charge money for it in the app. You can still charge money for the service, but you have to do that on your own website and infrastructure (a la Netflix, etc.), not Apple's.
Basically, you can't make money. Duh. You can't even place a link for a third-party payment system (the case to allow that is on its way to SCOTUS).
Apple is a mafia.
Seems to me you're not noticing the Kremlin levels of cognitive dissonance in your statement here. With this severe lack of self-awareness, if you were in Apple's place you'd be way worse than they are right now.
> They want money from my app when I want money from their store!
Apple is a mafia because they want money that they do not earn. They didn't do anything that deserves 30% of gross to help me write my application, and they are not promoting it for free.
All they do is they provide a shitty autoupdate service.
> Seems to me you're not noticing the Kremlin levels of cognitive dissonance in your statement here.
Are you paid by Apple's Reich?
Worse, you can't make money and you have to pay the $100 developer fee every year. The developer fee is trivial if it's a business expensive, but quite expensive otherwise!
30% is way too high. 15% seems high as well without knowing the costs or benefits of the App Store.
Am I doing this right?
> Am I doing this right?
No.
Apple allows you to ship infinite amount of apps at no cost, if you don't in return ask the store for money.
What kind of a mafia works like that?
I think they actually have a monopsony since you can only sell to apple. If there were other app stores, you could sell to them instead.
"In economics, a monopsony is a market structure in which a single buyer substantially controls the market as the major purchaser of goods and services offered by many would-be sellers. The microeconomic theory of monopsony assumes a single entity to have market power over all sellers as the only purchaser of a good or service. This is a similar power to that of a monopolist, which can influence the price for its buyers in a monopoly, where multiple buyers have only one seller of a good or service available to purchase from."
https://en.wikipedia.org/wiki/Monopsony
(And they probably have a monopoly wrt iphone customers)
A reasonable fee with 0 competition would be fine. No fee, while hiking the prices of the devices would be fine.
Imagine you're working on a hardware product that can communicate with your other devices over Bluetooth. How exactly do you avoid Apple in this scenario?
You can't, or you won't be in business for very long. You need to develop an app because Apple intentionally gimps their browser, and to release the app you must agree to their terms.
They're in a dominant position that allows them to dictate unfavorable terms to the rest of the industry which, among other things, stifles innovation.
I can't think of nothing that is paired over Bluetooth that couldn't be done better with some other medium. Even Apple use a superset of Bluetooth to get its devices working properly together.
The HN audience in particular is not just tinker-friendly, but the vast majority surely lived through the era of Apple where Jobs pitched the iPhone as more of a gateway to the internet in your pocket, web apps were even mentioned as being a major feature/philosophy.
Not to mention the "old world" of premobile OSes which still have the basic understanding that I can install programs programmed for this platform, without "protection" and the "protection fees" associated with a centralized monopoly, an old world of which macOS could never shed in the name of profits, but iOS and beyond has become the battleground for redefining the computing experience to the mainstream: is it supposed to be a bladerunner 2049 esque experience of hitting the predetermined icons on my pocket vending machine, infantilizing and commodifying people's lifestyle for wealth concentration of a company that uses it's wealth to...hmm.
It is, at the very least though, a bit of a betrayal to those used to the old ways.
At the worst, it's part of a larger regression against individualism.
For comparison, Amazon charges 15%. AWS marketplace charges <10%.
Yes. Why are we so ok on giving up our rights like this? "no company is allowed to inside trade/use slaves/have a monopoly" - yes!
Framing things as you have leads to the impression that, by analogy to oppressing a person, restricting a large company is bad. But a company is not a person. Companies are legal constructs that exist because they are useful to society. A monopoly distorts markets and stifles innovation by disadvantaging potential competitors. This is not beneficial to society and so should not be permitted. So yes, a sufficiently large company should not be permitted to do things that might be permissible for a smaller company.
Exactly. If you take US antitrust law as written, once you're close to being the dominant player, you can't have a walled garden.
I think tech savvy users should be able to (after jumping through a few hoops) do whatever they want with their phones, without any fear of reprisal from software and hardware manufacturers. If Apple and Google insist on strangling this market then Tim Sweeney has the money to develop a competing phone ecosystem, it could be a great business opportunity if a large number of users and developers are actually not being well served. But he may find that this underserved population is a quite small slice of the total addressable market, and that walled gardens actually do a good job for the vast majority of users, protecting my oblivious grandma who clicks on everything from a horde of scammers.
One could hope people would despise such a company and the market would fix it, but humans have proved the opposite. I've stopped trying to educate people and lost all faith in humanity. Most of them just don't care, as long as they've got their shiny stuff.
It reminds me of the Newburgh Letter, suggesting that George Washington be declared king after winning the revolutionary war. It's like they missed the whole point of the exercise.
No. It’s you can have a monopoly if you treat everyone equally and don’t make secret deals with anyone.
This is a generally accepted and non controversial practice in certain areas.
Of course not saying that this should be the case for app stores or that Apple is actually treating everyone equally..
I guess part of the result is "you can't lock your ecosystem while pretending it's open". As for Apple's situation, it's different enough to warrant a separate lawsuit.
Or would that be illegal since it was originally open?