It's nowhere near fair. It's extremely anticompetitive. This is the kind of behavior that gets a company in trouble with the FTC.
Indeed but Apple is aware that the FTC isn't likely to punish them enough that the behavior will be a net negative.
If only the Federal Government would be as serious about "Sending a message" on antitrust as they are about low-mid level drug dealers, this kind of thing would be a lot more rare.
[1] http://www.theguardian.com/technology/2015/apr/14/european-c...
If we believe in what we write, then we should punish them.
My recommendation to any one developing for apple devices is be ready to be blocked or kicked out of the app store if you are too successful. As apple will enter the market and if they do they will start applying rules they were ignoring earlier as those were selling devices for them but now they don't need you as you are a competitor so out you go.For example, Microsoft got in trouble for pre-installing IE on Windows because they had monopoly in the OS market. If they didn't have that monopoly, they would not have been penalized.
These are all anti-competitive behavior that will get one smacked by Federal regulators without being a monopoly.
http://www.theregister.co.uk/2015/01/16/silicon_valley_415m_...
> Doing an anti competitive practice is legal if you don't have a monopoly?
A practice being anti-competitive (in a legal sense) depends on the act being done by a company that is a monopoly, or part of an oligopoly.
For example, a company giving their product away for free is not illegal per se. Say, as part of a promotion, in order to get their product in consumer's hands instead of a competitor's product. In a healthy market, this is a valid way to do business.
But, if the company that decides to give their product away for free is a monopoly, and the result of that act is squashing what little competition might exist or is entering the market, then this same act (giving the product away for free) is illegal.
If your company has 10% of the market, and the rest has 1% each, you can still be slapped for antitrust if you start using that position as leverage in a different market.
ianal, btw...
And then you have Google, which has been taking quite a bit of flak from Europe lately.
An antitrust case can still be levied for conspiring to become a monopoly (as Microsoft did with its strongarming of OEMs combined and its bundling of Internet Explorer with Windows). Apple has even run afoul of that at various times (like when it got dinged for its monopolistic behavior regarding e-books; it certainly didn't have an actual monopoly, but that still fell under antitrust regulations).
"Judge Thomas Penfield Jackson issued his findings of fact on November 5, 1999, which stated that Microsoft's dominance of the x86-based personal computer operating systems market constituted a monopoly" http://en.wikipedia.org/wiki/United_States_v._Microsoft_Corp...
A company does not have to be the sole supplier in a market to be considered a monopoly in the eyes of the law.
> Apple has even run afoul of that at various times (like when it got dinged for its monopolistic behavior regarding e-books; it certainly didn't have an actual monopoly, but that still fell under antitrust regulations).
But that case didn't just involve Apple. It also involved the oligopoly of book publishers, who worked with Apple to engage in price fixing against Amazon.
With that said...
> Microsoft's dominance of the x86-based personal computer operating systems market constituted a monopoly
If you read further in the paragraph you quoted, you'll find that Microsoft was specifically engaging in monopolization (i.e. the process of becoming a monopoly), which was the specific reason why it got dinged. It also states the and in there - that they had taken measures to disrupt attempts to counter their monopolization.
This analysis is consistent with the Sherman Antitrust Act (the law under which Microsoft was cited), specifically Section 2: Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony [. . . ]". It's also consisted with the Sherman Antitrust Act's intent, as specified by its authors (George Hoar: "... [a person] who merely by superior skill and intelligence...got the whole business because nobody could do it as well as he could was not a monopolist..(but was if) it involved something like the use of means which made it impossible for other persons to engage in fair competition.").
This isn't even mentioning the failure of the court to recognize that there were viable altneratives to Windows that, in their words, "a significant percentage of consumers world-wide could substitute for Intel-compatible PC operating systems without incurring substantial costs". GNU/Linux (which was designed for "Intel-compatible PC"s to begin with), three of the four mainstream BSDs (NetBSD, FreeBSD, and OpenBSD), OS/2, and a variety of other operating systems existed at the time of that ruling. The only way the ruling's rationale would hold true is if they interpreted "Intel-compatible" to mean "Windows-compatible", in which case the ruling is directly applicable to Apple's behavior now (since Apple - like Microsoft then - is attempting to monopolize the application ecosystem of iOS; if Microsoft can get dinged for monopolizing a specific market segment, then so can/should Apple). In this case, Apple is "attempt[ing] to monopolize" smart watches within the the iOS application market (just like how Microsoft "attempt[ed] to monopolize" browsers within the Windows application market). The difference is that Apple's attempts are much more obvious.
Disclaimer: IANAL.
> That still leaves us with Google, which (as far as I know) is not considered a "monopoly" by any measure of the term.
I don't know how you've come to this conclusion. It is very reasonable to argue that Google has a monopoly on internet search. Whether they are engaging in antitrust is more unclear, but they wield an amount of power in the search market that no other company even gets close to.
That makes it correct game theory, Apple has to do it because every other company does it. So it's necessary, but that doesn't make it fair.
So apparently the FTC won't punish them enough for it to be a net negative. Oh well, I guess that's it then. No one else has responsibility, right?
Wrong!
We have responsibility. The good news is, you don't have to work hard at it. If you want to punish apple for this, just stop buying their shit. It's actually easier than not doing it!
This behavior may get them in trouble with the FTC, but it's also not likely to be very popular in the market. I get if they want a "premium" experience with the Apple Watch, but they shouldn't block other devices. The Apple Watch should be able to win on its own merits; the wearables space is still small enough that IMO any competition should be welcomed as it drives the whole market forward.
Abusing a stranglehold or monopoly will eventually draw the ire of regulators. Just ask Microsoft or the EU.
What is and isn't OK is something that will probably be decided in court. I hope this kind of anti-competitive measures do get some kind of regulation in the app-stores/ecosystems space that large mobile players have crafted over the past few years, because they could easily stiffle competition from their current dominant positions.
https://en.wikipedia.org/wiki/Apple_Inc._litigation#Antitrus...
> Abusing a stranglehold or monopoly
Apple has a "stranglehold" on what exactly? I think you're just using hyperbolic words.
> I hope this kind of anti-competitive measures do get some kind of regulation
How about a little patience instead? How about not buying Apple products? Let's get the pitchforks out and demand the government punish these companies because they're inconveniencing us, or give it enough time and let consumers sort it out. Look what happened with Internet Explorer. Does it dominate the market anymore?
I am not convinced that this practice is worthy of concern. I don't think that a short-term predatory pricing loss incurred by a dumper can ever be recovered. This opinion is based mostly on the personal belief that the substitution effect is far greater than most economists care to admit, particularly when the potential substitution is to not buy anything at all.
You can't dump alfalfa to bankrupt existing hay growers and then make a killing by raising alfalfa prices once you dominate the market. Why? Farmers will feed their livestock gummy bears[0]. And then they will plant their own damned hay crops at the very next available opportunity. The net result is that you go bankrupt, too, because you took a huge loss right before killing your own market.
[0]http://www.reuters.com/article/2012/09/23/us-usa-cattle-cand...
http://www.naturalnews.com/037351_cattle_candy_marshmallows....
http://money.cnn.com/2012/10/10/news/economy/farmers-cows-ca...