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Comment by bruce511 | Hacker News Reader

Is Apple even a monopoly though? In the Microsoft case Microsoft had 90+% of desktop market share. (And propped Apple up to create even a semblance of competition.) They were accused of leveraging that position to prevent manufacturers etc from getting out of line.

Apple, on the other hand shares the market with Android. Globally it's a minority share. Yes, in the US, Apple has a bigger market share than it has globally, but Android is a real competitor even there. So I'd suggest the two situations are quite different.

If it's not a monopoly (which would be fine by itself anyway), it's hard to make the case that they are leveraging that monopoly in unhallowed ways.

All that said, clearly the DOJ think they have a case, and I imagine they've spent a LOT of man-hours thinking about it and forming an argument. More than the no-time-at-all I've spent thinking about it.

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You use the term Android like it is a corporation or a brand. Are you comparing iOS to Android OS or Apple to Samsung, Google etc.? I agree that Apple commands a relatively small share of the US mobile ecosystem, but where do the competitors stand?

Apple sells over 60% of new smart phones in the US.

Android is a brand. It's trademarked by Google.

Linux is trademarked as well. Is Linux a competitor to the iphone?

Yes. https://en.wikipedia.org/wiki/Linux_for_mobile_devices

Imagine you're an Apple lawyer, and you're explaining to the regulators that you are facing serious competition. You gonna send them that link?

I didn't say Linux was especially good competition for iOS.

But unless you can demonstrate that it sucks because Apple is doing something which qualifies as restraint-of-trade, which I would suggest is obviously not the case, that doesn't matter.

It actually does matter if it has no practical bearing on Apple’s market (most easily seen in pricing) power.

Theoretical competition is not sufficient to demonstrate absence of a monopoly.

It's not theoretical competition. It's actual competition, which is bad. These are not the same thing.

The doctrine that it's your fault if your competitors suck makes no sense. It's weaponized tall-poppy syndrome.

That's not the doctrine.

The doctrine is that you can't exercise monopoly power in certain ways. Monopoly power is an empirical question, and does not turn on merely whether it is possible to describe a market in which another product exists, but whether that is a real market in which the products are in fact competitive.

But even if you have monopoly power, if you aren't illegally exercising it, you aren't in trouble. So you aren't punished for being an empirical monopoly.

You're correct, it is a brand. The point stands though. Comparing "Apple" to "Android" does not work. Perhaps a comparison between iOS App Store and Google Play Store would be more apt, but that is another discussion.

iPhone is not a monopoly since z lot of companies sell phones, and with significant market share.

iOS is not a monopoly since at least one other major operating system exists, with significant market share. (Whether Linux is or isn't a competitor is irrelevant.)

A monopoly by itself is not a problem. Only behavior ancillary to that monopoly is. But to get there you have you have a monopoly. I don't see how you make the case. Clearly consumers have choice.

Now, there's a case to be made for bad behavior, but its weak. Apple will argue that consumers have choices.

But I am not a lawyer, so I'll leave it up to the lawyers on both sides to earn some fees discussing it.

Apple is competing against multiple companies, all of which are minorities relative to the iPhone's market share. These companies use derivatives of Android, but still compete against one another and Apple all the same. Android and Linux aren't competing companies, they're operating systems that are forked by OEMs and manufacturers to provide an OS.

So, now let's introduce iOS into the equation. Apple can differentiate their product, but how much is considered acceptable before regulators complain? The DOJ was quite straightforward today, accusing Apple of using iMessage to degrade user experiences through exclusion. If it walks like a duck, talks like a duck, it's probably a...?

> Is Apple even a monopoly though?

Do they have pricing power? You can select any boundaries you want for markets to come up with any market share number you want, but the key empirical test is is there actual substitution effect or does Apple have the ability to charge monopoly rents. One of the major points of walled gardens is to create vendor lock-in and prevent price conpetition, and Apple has been masterful at that.

In their App Store they absolutely have pricing power. They take a high tax, which is higher than most actual taxes, on nearly every single application installed despite doing basically nothing. Things like denying a application the ability to even mention services can be bought elsewhere are the worst offender of their misconduct and other offenses would be forcing apps to use their payment system, again with an extremely high fee, even on recurring subscription charges. Normally a payment processor takes 2 to 3 percent, not 30 %.

Sony (PlayStation store), Microsoft (Xbox store), and Valve (steam) all take 30%. No one can speak on what Nintendo takes due to NDA. Why are they never brought up?

Sony is currently facing antitrust lawsuits in multiple jurisdictions over the Playstation Store.

Those stores can be abusing their monopoly position as well. Apple has the greatest sales of all of those stores though so it should rightly be targeted first. They flew under the radar for far too long. People are literally going back to using websites rather than apps because of their decision, but Apple even tried to kill progressive web apps recently - which are basically just shortcuts to websites on the Home Screen.

You're mixing the literal definition of monopoly with anti-trust laws. They have over half the market as a single company and the rest of the market is actually a fragmented zone of other companies so yes I think they are. You don't have to own the entire market to run afoul of monopoly laws they don't require there to be literally only one choice in the market.

Not a lawyer (let alone one specializing in antitrust law), but it looks like the relevant legal standard is "dominant position". Basically, it's legal to have a dominant position, but that position can be abused through certain categories of actions. By contrast, under the Sherman Act it's nominally a felony to even attempt to become a monopoly (although the application of this by courts has apparently been both complex and contentious).

> Is Apple even a monopoly though?

Apple has a monopoly though it's AppStore on over 2 billion devices though which it conducts $90,000,000,000 a year. That's more than a lot of countries GDP combined.

Saying Apple doesn't have a 90%+ share of phone market is irrelevant.

The question though, is if Apple as the Platform (phone) provider, maintains it's monopoly (AppStore) though anti-competitive means.

This is exactly the same argument Epic made, and lost.

Just like you have an illegal monopoly of 100% of the market of people posting on HN with the username "InsomniacL".

Epic's sentiment certainly resonated with the European Commission, and apparently the DOJ as well. Do any of us really believe Apple's App Store control is harmless?

1. It's not illegal to have a monopoly, it is illegal to abuse it or gain it though anti-trust means

2. people posting on HN with the username "InsomniacL" is not a 'market' in any sense

> Market: an area or arena in which commercial dealings are conducted.

I don't know the details of Epic's case, they may have lost the battle but seems they might not have lost the war...

This depends on one important question: What is the relevant market? This is a fundamental question in all antitrust law cases: https://en.wikipedia.org/wiki/Relevant_market

If the relevant market is found to be "Apps on iOS", or "Flagships phones in the US", Apple is more likely to be considered having a monopoly position than if the market is "phones in the world". The courts will have to decide on what the market is before deciding if Apple has monopoly power or not.

Why do the app store policies and prices look so similar between iOS and Android? What competitive forces are going to change a duopoly with soft collusion?

Given the discovery both Apple and Google went through in their Epic trials, I would think that any collusion would have been documented by now. You don’t need collusion to have price convergence, just market forces. Are you arguing that Microsoft, Sony, and Nintendo are conspiring to fix the prices of console video games? All of them have fairly similar licensing requirements.

But we know the cost of providing app store services is quite low, so the convergence price is as high as the other party willing keep it at. If Apple lowered its cut to 8% tomorrow, Google would follow suit because it is still enough money to run the Play Store with. For video game consoles, the margins are slim (or negative), so the current cut is the natural price that lets developers sell games for a profit and the hardware companies to subsidize consoles to a level that people can afford them.

> But we know the cost of providing app store services is quite low, so the convergence price is as high as the other party willing keep it at.

Or what the developers would bear. Although I think the actual costs are higher than some people would like to think (with human reviewers and stuff, not just infrastructure).

> If Apple lowered its cut to 8% tomorrow, Google would follow suit because it is still enough money to run the Play Store with.

Would they? Apple changing their fees has no effect on Android. Android suffered from the stigma of being a second-class citizen for a while, when apps were developed for iOS first. If it is as you say, why did they not drop their fees back then?

> For video game consoles, the margins are slim (or negative), so the current cut is the natural price that lets developers sell games for a profit and the hardware companies to subsidize consoles to a level that people can afford them.

Right, but that’s a moral argument, not a legal one. Negative margins on hardware is a business decision. The law does not discriminate depending on your business plan. If 30% is extorsion, then whatever you do on the side does not make it stop being extorsion.

What is meant by "monopoly" has been evolving, and a majority share acquired through anticompetitive means could be enough to warrant government action.

Anticompetitive != monopoly.

> but Android is a real competitor even there

Is it though? On the hardware side sure but on the software side I don't see any competition. Both stores have close to identical practices and do not look like they compete over to get developers onboard. The only pricing change ever made was also made in reaction to an antitrust lawsuit and copied verbatim.

While not a strict monopoly, the lack of competition in this area between the only two players seems obvious.

Edit: I give up trying to help people

When was the last exclusive deal like we have on console then? I never heard of one.

This is maybe the first interesting/novel point I've read on this topic. (this Apple debate has mostly been beat to death and the whole thread here looks to be full of the same talking-point style arguments repeated ad nauseum by people on both sides who don't seem to be engaging any critical thinking).

I think Apple is clearly anti-competitive and is definitely powerful enough to warrant regulatory action given past standards, but the same exclusivity deals like consoles (and even audiobooks) have is certainly not a common thing (outside of Apple's first-party apps of course, but I would agree that isn't really what we're talking about here). I think this deserves some explanation, as it does seem like an obvious anti-competitive move that Apple could make but doesn't.

I tend to think Occam's Razor applied here is that Apple realizes their vulnerability to regulation and didn't wish to serve their critics evidence on a silver platter. I think that's why they announced that they will (finally) add (an inferior implementation of) RCS to the iPhone after many years of refusing and telling people to buy their mom an iPhone if they want to text her. Or the (inferior) implementation of PWAs. This is very much speculation of course, and I'd love to hear other theories.

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