> its phones’ ecosystems are closed for security reasons since it can vet App Store apps for malicious code and other dangers.
I'm not saying that this is not true, but given that Apple's app store revenue will probably be greater than global movie ticket revenue in 2018, I suspect that "security precaution" is perhaps not 100% of the motivation behind blocking all competition.
That's some fucked-up mental gymnastics of an excuse to explain the existence of the app-store. It's like having your refrigerator manufacturer enforce purchasing of groceries that he's vetted to save you from a salmonella infection, where the manufacturer keeps 30% of the grocery revenues, and arbitrarily controls what groceries can be purchased in the first place
Outside of apple, software is bought and sold in a secure manner without forking 30% to Apple, or having Apple mark you as a threat and toy-fuck you out of business [1].
And by what legal authority did you just state that?
Microsoft was forced to ship competitive browsers in the OS to avoid monopoly claims, but Apple - unlike Microsft, they won't even allow 'un-blessed' apps to RUN on the phone. Seems patently illegal
The same legal authority you've used to make your argument.
And Microsoft's situation was quite different from this one. For one, they had an overwhelming monopoly in desktop operating systems (something like 95% marketshare), and they had several times been caught intentionally breaking competitors' offerings.
Microsoft did a lot of shit to warrant their anti-trust suit. The browser thing was one bit.
How about how they spent $1 billion to market IE (a free product) in order to cut into a potential (though indirect) competitor's product (Netscape). Netscape's browser was reaching the point (as early as this was in the WWW days) of being a potential host for cross-platform software applications. This terrified MS as it would eliminate a lot of their foothold in the business market, in particular.
How about how when Compaq and others wanted to sell non-Windows OSes, Microsoft threatened them with increased Windows licensing fees. They had access to OEM rates which meant they could participate in the cut-throat and very low margin PC business. Without those rates, they would have to raise their prices. Even an extra $100-200 would price them above their competitors. This was done to eliminate the OS competition (or constrain it).
What has Apple done that is equivalent to these actions? And how has Apple's (minority) marketshare enabled them to do these things?
All you've started here is that you dislike Microsoft. There's zero moral difference in Apple's actions on the app store and Microsoft from yesteryears
Moral and legal are different things and you keep conflating the two. Additionally, you're the one that brought up Microsoft's anti-trust issues. If you're going to make a comparison, make it correctly. And if you're going to talk about moral and legal, make sure you distinguish between the two concepts.
Microsoft had a monopoly on the desktop PC OS. Apple has no monopoly on any product category. (Defining "iOS" as a "market" and saying Apple has a monopoly over that is absurd; it would turn every platform into a monopoly. By that reasoning, Facebook has a monopoly on Facebook.)
There is no specific law, or legal precedent disallowing a platform owner from exclusively controlling software distribution for their platform. In fact it’s been going on for a lot longer than the App Store. Several early smartphones before the iPhone were locked down in similar ways. Games console manufacturers and media player vendors often maintained exclusive services software and content distribution right. If n fact since you mention Microsoft, don’t they have an exclusive online store for XBox games? This sort of arrangement has been common practice for decades and never been legally barred that I’m aware of.
> Games console manufacturers and media player vendors often maintained exclusive services software and content distribution right[?]
That must not be true. Atari had to patent a mechanical mechanism that its cartridges used in order to prevent others from developing for their system.
And doing so was not illegal. That's exactly what I'm talking about - platform owners legally putting in place restrictions to control access to their platform, often because that's the primary way in which they make revenue.
It's not a crux at all it's the facts, Apple isn't breaking the law.
Whatever gymnastics you need to do to not think that is on your own. The Supreme court is being pulled in due to a split opinion, but one federal court has already ruled it legal.
That's not breaking the law. Also "if you don't like it, don't buy it" is literally how the market works. If you don't agree with the software decisions by Apple, you can happily flock elsewhere.
Regardless of your cherry-picking judgements that support your narrative, the fact that this in the supreme Court, and the fact that we're debating it on HN point to an uncertainty in legality.
The structure of the free market doesn't insulate monopolies or illegal items from being traded under the guise of choice. So don't keep pining on the existence of Android.
If you've lived under a rock, Apple banning an app from the app store can often be the death knell for the publisher, especially small ones. Stop pretending Apple isn't anti competitive on the app store
You're voluntarily purchasing a product from Apple and then complaining the product does something that's not only non-secretive, but actually used as a marketing point by Apple, the same company you bought said device from. You then mandate that this is, or at least should be, against the law. This is all in the context of a marketplace in which Apple has a non-monopoly position in.
But then you lose access to any Apple technology you may rely on, such as iMessage. In the EU this is irrelevant given that nobody gives a damn about it, but in the USA it is one of the biggest messaging platforms, and not having an iPhone makes every group chat you are onto into a "green bubble chat" where everything is conveyed to everyone using crappy MMS instead of iMessage. This user experience degradation has led to multiple instances of "I would buy an android phone, but everyone around me uses iMessage".
Thus, Apple being a monopolist IS an issue, given that they actively design their software to be less interoperable with the rest of the world as possible to lock you in into their ecosystem.
> Businesses that potentially could be threatened by such consumer litigation are electronic marketplaces like the App Store, ticket site StubHub, Amazon’s Marketplace and eBay where individual sellers set prices.
I don't think the important fact of the case is the fact that sellers can set their own prices, but the fact that a single entity has total control over the distribution of a broad category of 3rd-party consumer good. So it's not Amazon and StubHub that should be worried, but groups like Nintendo, Microsoft's Xbox division, Sony, or The Blu-ray Disc Association.
This kind of behavior - where whole swaths of consumers pay inflated prices, and have choice severely restricted, but the company enforcing such monopoly gets away on a ludicrous technicality, needs to end.
However you look at it, completely locking down hardware owned by the user, to apps blessed by the manufacturer is the text-book definition of anti-competitive, and lest we forget, didn't exist before Apple's false "but it's all for the consumer's good" marketing blitzkrieg. Regardless of the B.S. mental gymnastics employed by Apple and it's shills, it is unfairly placed as a kingmaker in a $60B app-store market - and it's app store is designed to place it as a monopoly controller of software running on it's phones.
> However you look at it, completely locking down hardware owned by the user, to apps blessed by the manufacturer is the text-book definition of anti-competitive
The practice of locking down hardware is many things, but textbook anticompetitive it does not seem to be. Apple isn't working with other vendors to fix prices (cheap Android devices are far more common), reduce quality, or innovation.
How does the level of locking of the Apple App store on iOS or Mac OS insulate Apple from outside competition the likes of Samsung, Google, Huawei, etc?
Edit:
In fact, doesn't the locked-down state of the hardware actually encourage competitors to release their own products? Anti-consumer could be valid here, but anti-competitive just doesn't seem correct.
> Who's arguing the app store inhibits handset competition?
Considering you're declaring Apple's practices anti-competitive, I thought you were. Apple's competition is definitively other handset manufacturers.
> The argument is that Apple chokes app developers ON THE APP STORE
Okay so you're trying to lay down that Apple, who profits _billions_ per quarter on the iOS App Store, is actively engaging in practices which _discourage_ competition?
I mean, I think I see where you're coming from, and that fits a kind of definition of anti-competitive practice. Since a developer can't offer software free of the app store Apple has manipulated their own market to discourage that kind of competition.
Still the fact is that there is nothing _special_ about iPhones or any other phone. They have distinct user bases. Despite the fact that Apple does sell software on their platform, if they didn't I don't believe it would change their position on the value of the walled garden. Apple is competing with decidedly few software companies, and those it competes with seem to be able to manage just fine even on iOS (see: Apple Music v Spotify, Notes v many-notes-apps, Reminders v many-todo-apps, etc.). It's not as though Apple releases apps then removes competing apps from the app store _because_ of the competition.
Either way, thanks for engaging. I doubt we agree, but it was good to explore the thought out some more.
For paid apps, it does. App store revenues totalled some $60B in 2017, and guess which app store saw an overwhelming majority of those dollars flow through it. There's your market
They have been[0], but that's not the point. Your claim that no industry or company had done this before Apple's "marketing blitzkrieg" is incorrect, and has in fact been standard practice in certain industries for decades.
It's hard to even characterize the level of impact a case like this could have. For years, the tech industry has understood that the key to success is to control the platform, and then get other developers building on and generating income for your platform. Imagine the sheer number of businesses that may have their business model blown apart by this.
If a company is ruled against on having their own app store on their own OS on their own devices, when they aren't even a monopoly-level player in the larger market, this will blow apart nearly any app store model out there.
> this will blow apart nearly any app store model out there.
But on OSX you have an app store and you can side load applications, so you can have them both.
OS X and Windows will probably be okay because the "default" is to install outside the store. It's not really considered "sideloading". But most other platforms with single-source app stores will be in trouble.
Why the default is important in this case, if the device owner can enable side loading in an easy way then I am okay with a secure default. Hopefully some progress is made and OSX and Windows remain unlocked even if MS and Apple are slowly pushing in the other direction.
If the Apple app store isn't a monopoly I don't know what is. These kind of practices make Microsoft's anti trust practices from the 90's look like child's play. I hope the Supreme Court doesn't fall for their bullshit lies about security being the reason for this setup but I doubt any of the justices will even understand the case properly, let alone make intelligent decisions.
actually at this stage of this litigation, the market is defined as whatever the plaintiff says it is. Because the issue here is standing to sue. The case will get to the definition of relevant market later on, assuming this standing hurdle is resolved in favor of the plaintiff consumers.
But I do agree with you on the merits. The relevant market ought to be mobile apps generally, not iOS apps. That's just not the question for which the US Supreme Court granted certiorari (as other comments have pointed out).
Microsoft had something like a 97% marketshare. Apple is nowhere near that. They spent $1 billion to market a free product in order to eliminate or undermine a competitor (Netscape). They threatened hardware vendors with increased licensing fees if they sold non-Windows PCs (this helped kill BeOS and held back some efforts on selling Linux to consumers as well). MS did all of this and got away with it because of their marketshare. Without it, they wouldn't have gotten nearly as far as they did in these behaviors.
That is a fair statement, but as far as the FTC is concerned that's probably not enough. The fact is that there are alternatives (for both consumers and developers) to the iOS app store. They don't get products from or on iOS, but they can still buy and sell comparable products.
By the reasoning of your statement, all that's needed to establish a 100% monopoly is a sufficiently narrow definition of market. Walmart has a 100% monopoly on products (legally/officially) sold in Walmart stores. Do they have a monopoly as far as the FTC and courts are concerned?
> The fact is that there are alternatives (for both consumers and developers) to the iOS app store. They don't get products from or on iOS, but they can still buy and sell comparable products.
But that's usually always true: 90s era Windows users had alternatives in the Macintosh and Sun workstations, and Monopoly-era AT&T users had alternatives in CB radios, etc.
That explainer you linked even uses language that excludes some competitor products: "Microsoft was found to have a monopoly over operating systems software for IBM-compatible personal computers" [emphasis mine].
That is a fair statement, but as far as the FTC is concerned that's probably not enough....
> By the reasoning of your stament [sic], all that's needed to establish a 100% monopoly is a sufficiently narrow definition of market.
I don't think the reasoning in my statement is sufficient to identify a monopoly, and it wasn't indented to be such. What I was trying to communicate is that you can't disprove a monopoly based on comparing marketshare numbers, and the actual determination is probably rather complicated and requires a lot of expert judgement.
I think Apple's business practices warrant careful and continuous antitrust scrutiny. If they're a monopoly, the form that takes will probably be significantly different than the one taken by 90s-era Microsoft.
There were alternatives to Windows on IBM-compatible PCs, but MS actively worked to block them in the marketplace. MS also actively worked to block competitors who would break platform-centric software via things like (as Netscape was after) creating a platform-agnostic software delivery platform.
It's also important to note that the FTC doesn't actually care about monopolies in all cases. They care about monopolies that arise from abuse and anti-competitive behavior or that are used to abuse consumers and competitors.
Show that Apple is in a monopoly position (as a player in the mobile hardware/software business space) and that they got there by way of anti-competitive behavior. Or that they've abused this position to artificially control pricing and other things. That's what needs to happen to establish an anti-trust case against them.
defining the relevant market is very frequently, if not nearly always, the most important question in an antitrust / unfair competition lawsuit. As your example points out.
>Apple has a 100% marketshare in the distribution of iOS apps
Right, and Steam has a 100% marketshare in the distribution of apps available on Steam.
Now, obviously there's wrinkles here and I'm not trying to be disingenuous and claim that these are identical scenarios. But you see how this quickly gets subtle, yes?
The issue here is very different than people seem to think.
The supreme court granted cert on one question:
"Whether consumers may sue for antitrust
damages anyone who delivers goods to them,
even where they seek damages based on prices
set by third parties who would be the
immediate victims of the alleged offense."
(This is apple's statement of the question, and thus necessarily is tilted in how they see things)
There is a circuit split on this issue, which is likely why the supreme court took it. It's mostly about indirect purchasers vs direct purchasers. Indirect purchasers cannot sue, only direct purchasers can, mainly because it's really hard to apportion damages properly.
The previous major case on distribution monopolization was an eight circuit case about ticketmaster, Campos v. Ticketmaster Corp, https://caselaw.findlaw.com/us-8th-circuit/1097030.html. Section II of that opinion is a fairly readable rundown of the issue of direct vs indirect purchasing and who gets to sue.
Ticketmaster held that people paying greater distribution fees to ticketmaster as a result of their monopoly could not sue, as they are indirect purchasers.
The ninth circuit, in the apple case, held differently, holding that apple was selling directly to consumers, regardless of whether app developers got to set price.
The opinion, which is also quite readable, is here:
https://www.leagle.com/decision/infco20170112133.
Again, i'd just read the part starting with "plaintiffs are direct purchasers"
Personally, i think the dissent in ticketmaster (and the ninth circuit) got it right. This is also what the ninth circuit explicitly says.
In these models, only the people at the bottom make sense as the people to sue, as when you control distribution carefully like this, they are the only injured party.
I think it would be interesting if the court looked at who signs the software being purchased, from a digital security and ownership perspective. When you purchase an app from the App Store you are purchasing Apple's software. It's no longer signed by the original developer. If the court held Apple to the model they've deployed for their ecosystem, that could have interesting ramifications on the means by which Apple locks its platform down.
true, but in antitrust terms the developer is still setting the price. Not Apple. It's the developer who makes it a free / freemium / $0.99 / $999.99 app. That pricing decision seems to be responsible for the circuit split.
> only the people at the bottom make sense as the people
> to sue, as when you control distribution carefully like
> this, they are the only injured party.
Here's the case for manufacturer's standing: the manufacturer (app developer) might argue that the distributor's (Apple's) monopoly on distribution hurts them just as much if not more since the inflated price means they're selling less quantity than they would in a non-monopolized marketplace. Even though they technically set the price, having to pay Apple's rake on the App Store means that they must inflate their prices by at least 30% to bring them back to the price they'd otherwise sell at in the absence of the distributor.
In any event, I thought the case was a dog on the merits. How can Apple possibly be a monopolist, despite their 100% share of application sales on iOS, since the relevant market is for app-capable cell phones -- not iOS. Plenty of folks, the majority in fact, vote with their dollars by buying Android devices.
The irony is that Google is able to take the exact same 30% cut in spite of allowing side-loading and third party app stores.
So I think the class action itself would be difficult to win even if it were allowed to go ahead. Apple could argue pretty convincingly that their app store "monopoly" does not drive up app prices.
App developers definitely have standing here (and the 9th circuit opinion says so).
They just have a much harder time showing injury (and thus standing) because they are not paying the fees :)
Instead, they have to make the indirect argument you do, and it's unclear what the harm is.
They are not paying 30% more, the consumer is.
There's no data to suggest they are selling less.
Who is really injured?
The same issue arose in ticketmaster - outside of consumers, everyone else has a really hard time showing injury.
Meanwhile, the consumers, who directly pay the monopoly fee, are directly injured.
They could always drop their price to the amount they could charge without the 30%, and get supply/demand price sensitivity curves. If a bunch of apps did this, you could get statistically significant data.
A law firm could easily pay a number of app makers to try this out in exchange for the data, and then make a huge class action out of this.
I think the big challenge is that there are a number of confounding factors, like Apple's ranking algorithms.
Wouldn’t that „test“ imply that Apple isn‘t doing any kind of marketing/promotions through the 30% cut? At least here in Germany, discounts and boni of 10-15% when buying iTunes gift cards are quite frequent. And these discounts influence at least my app buying behavior. In addition, these discount offers are advertised and so indirectly promote the App Store to millions of people. Developers profit from this in one way or the other.
In your test just cutting the 30% „Apple tax“, the developer would still profit from these discounted gift cards. But it’s not the developer giving the discount from his cut, but Apple from the 30%. Moreover, the 30% covers not only handling and processing App Store Infrastructure and sales, but as well the editorial sections of the App Store promoting news apps daily. There already exist reports on how this editorial content boosts app sales.
So, your test would still take all this for granted and therefore would be highly skewed. The data would not be „statistically significant“ at all.
I never said Apple doesn't do anything for their 30%, and I make no judgements about whether it's warranted. My comment was just a thought experiment about how a law firm might approach making a case for damages, given the conversation people were having.
You may buy iTunes cards. I've never bought them, nor even looked at them. I don't know which of us is more representative, but I don't think that invalidates the broad strokes of a test like I describe.
Weirdly it seems no one is arguing about whether or not Apple is a monopoly but rather about who is injured by Apple’s monopolist, out-sized commissions.
That is true, but it's because that point in time would not occur yet.
The question at this point in time is about standing, which is necessary for this plaintiff to be able to pursue the case.
Basically, is this actually the right person to be suing over this (it's pretty complex, and i'm removing a tremendous amount of nuance).
Plaintiffs bear the burden of proving standing. However, in most motions about standing and appeals of those motions, all facts will be assumed to be true.
This is because most standing dismissal is for "failure to state a claim on which relief can be granted" (FRCP rule 12(b)(6)) . Which means, basically,"even if all the facts are true, you still have no case". So they do the obvious thing, and for the purposes of that motion (and appeals of it, like here), they assume all the facts are true :)
Apps are extremely tricky. The 30% does seem like a lot but if you consider a few things:
Apple is providing an instantaneous, global distribution network.
Save your ability to market the app, you can effectively guarantee the same experience across billions of disparate devices. The open web can not provide the same piece of mind in terms of security to the end user.
The app vetting process isn't free.
Apple is ensuring quality within the App Store. Bad apps still get past Apple's vetting rules and are retroactively denied all the time. This creates extremely a strong sense of trust between the customer and Apple. Consumers become less and less risk-averse when it comes to downloading new apps from the App Store. Again, I'd argue this runs counter to the open web due to its long history of leaks, hacks, privacy violations, phishing attempts, etc. The Apple App Store currently has the highest bar for an "open" ecosystem of independently-developed software.
Apple provides the service of the App Store at its own expense.
The App Store has pulled in $100BB over 10 years which is great, but I'm sure they'd turn it off in a heartbeat if it consistently caused serious security breaches within the phone.
Tim Cook has gone on record so many times about the personal and private nature of the phone. Whether it's possible or not for a rogue app to circumvent Apple's numerous security safeguards is irrelevant as security is a policy Apple takes extremely seriousl; maybe to their own detriment.
Apple has a history of providing basic, free alternatives to apps that monopolize particular verticals within the App Store.
Calculator, Flashlight, the various flavors of Timer functionality, the new ARKit Ruler app, etc. I don't view these Apple-provided apps as akin to drug stores offering basic alternatives to things like Tylenol etc. it's good for the overall App market economy as it should stem the rise of local monopolies.
Ironically, the only app in which Apple does not offer an alternative is the App Store. The App Store isn't an alternative, it's simply the only way to download apps.
I do see a future where phones will have a heavily-reduced version of iOS that offers a small subset of Apple-created apps without the App Store. The numbers don't lie, most iPhone users do not download apps, or only download less than 10 apps over the lifetime of the phone.
At the end of the day, apps must be vetted for quality because Apple has a brand to maintain. They simply can't allow apps that seriously compromise the performance of the phone or the privacy of the data on it. It's not within the realm of an allowable reality as per Apple policy.
The 30% taken by Apple may be eclipsed by the App Store ad revenue. I assume they'll greatly reduce the 30% cut moving forward as the App Store ad revenue increases.
Something else which can’t be overlooked.... Apple developed iOS, and extremely extensive APIs and documentation to go along with them which enable these apps to exist in the first place.
In many cases Apple has done the R&D and then productized entirely new hardware and software interfaces which apps leverage. When you develop on iOS you stand on the shoulder of a giant who has enabled, through extraordinary investment of labor and capital, a significant portion of the actual end-user experience of running any given app.
One might even say about 30% of that overall experience is Apple’s own work product in the first place.
All that is before you even get to the extremely valuable services actually provided by the small piece of the puzzle which is itself called the “App Store”.
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[ 3.1 ms ] story [ 136 ms ] thread> The U.S. Supreme Court on Monday agreed to take up Apple Inc’s bid to escape a lawsuit accusing it of breaking federal antitrust laws
https://ca.reuters.com/article/businessNews/idCAKBN1JE1JH-OC...
I'm not saying that this is not true, but given that Apple's app store revenue will probably be greater than global movie ticket revenue in 2018, I suspect that "security precaution" is perhaps not 100% of the motivation behind blocking all competition.
Outside of apple, software is bought and sold in a secure manner without forking 30% to Apple, or having Apple mark you as a threat and toy-fuck you out of business [1].
[1]: https://www.macrumors.com/2018/05/24/apple-rejects-valve-ste...
Microsoft was forced to ship competitive browsers in the OS to avoid monopoly claims, but Apple - unlike Microsft, they won't even allow 'un-blessed' apps to RUN on the phone. Seems patently illegal
And Microsoft's situation was quite different from this one. For one, they had an overwhelming monopoly in desktop operating systems (something like 95% marketshare), and they had several times been caught intentionally breaking competitors' offerings.
How about how they spent $1 billion to market IE (a free product) in order to cut into a potential (though indirect) competitor's product (Netscape). Netscape's browser was reaching the point (as early as this was in the WWW days) of being a potential host for cross-platform software applications. This terrified MS as it would eliminate a lot of their foothold in the business market, in particular.
How about how when Compaq and others wanted to sell non-Windows OSes, Microsoft threatened them with increased Windows licensing fees. They had access to OEM rates which meant they could participate in the cut-throat and very low margin PC business. Without those rates, they would have to raise their prices. Even an extra $100-200 would price them above their competitors. This was done to eliminate the OS competition (or constrain it).
What has Apple done that is equivalent to these actions? And how has Apple's (minority) marketshare enabled them to do these things?
That must not be true. Atari had to patent a mechanical mechanism that its cartridges used in order to prevent others from developing for their system.
Don't like it? Don't buy an iPhone then. Nobody is holding a gun to your head to use iOS or the App Store. End of story.
There's a number of handsets for you to choose from that aren't Apple's.
Apple's legal non-compliance cannot be justified by the existence of Android. Hence the lawsuit
Whatever gymnastics you need to do to not think that is on your own. The Supreme court is being pulled in due to a split opinion, but one federal court has already ruled it legal.
That's not breaking the law. Also "if you don't like it, don't buy it" is literally how the market works. If you don't agree with the software decisions by Apple, you can happily flock elsewhere.
The structure of the free market doesn't insulate monopolies or illegal items from being traded under the guise of choice. So don't keep pining on the existence of Android.
If you've lived under a rock, Apple banning an app from the app store can often be the death knell for the publisher, especially small ones. Stop pretending Apple isn't anti competitive on the app store
Dude.
Thus, Apple being a monopolist IS an issue, given that they actively design their software to be less interoperable with the rest of the world as possible to lock you in into their ecosystem.
I don't think the important fact of the case is the fact that sellers can set their own prices, but the fact that a single entity has total control over the distribution of a broad category of 3rd-party consumer good. So it's not Amazon and StubHub that should be worried, but groups like Nintendo, Microsoft's Xbox division, Sony, or The Blu-ray Disc Association.
This is actually an important fact of the case. The case isn't about Apple's total control over the App Store, it's about whether end-users can sue.
However you look at it, completely locking down hardware owned by the user, to apps blessed by the manufacturer is the text-book definition of anti-competitive, and lest we forget, didn't exist before Apple's false "but it's all for the consumer's good" marketing blitzkrieg. Regardless of the B.S. mental gymnastics employed by Apple and it's shills, it is unfairly placed as a kingmaker in a $60B app-store market - and it's app store is designed to place it as a monopoly controller of software running on it's phones.
https://www.ftc.gov/enforcement/anticompetitive-practices
https://en.wikipedia.org/wiki/Anti-competitive_practices
The practice of locking down hardware is many things, but textbook anticompetitive it does not seem to be. Apple isn't working with other vendors to fix prices (cheap Android devices are far more common), reduce quality, or innovation.
This is indeed text-book protectionism
Edit: In fact, doesn't the locked-down state of the hardware actually encourage competitors to release their own products? Anti-consumer could be valid here, but anti-competitive just doesn't seem correct.
The argument is that Apple chokes app developers ON THE APP STORE. The existence of other handset manufactures is irrelevant
Talking about a monopoly within an ecosystem misses what a monopoly means in economic terms. It's a question of consumer choice and leverage.
Considering you're declaring Apple's practices anti-competitive, I thought you were. Apple's competition is definitively other handset manufacturers.
> The argument is that Apple chokes app developers ON THE APP STORE
Okay so you're trying to lay down that Apple, who profits _billions_ per quarter on the iOS App Store, is actively engaging in practices which _discourage_ competition?
I mean, I think I see where you're coming from, and that fits a kind of definition of anti-competitive practice. Since a developer can't offer software free of the app store Apple has manipulated their own market to discourage that kind of competition.
Still the fact is that there is nothing _special_ about iPhones or any other phone. They have distinct user bases. Despite the fact that Apple does sell software on their platform, if they didn't I don't believe it would change their position on the value of the walled garden. Apple is competing with decidedly few software companies, and those it competes with seem to be able to manage just fine even on iOS (see: Apple Music v Spotify, Notes v many-notes-apps, Reminders v many-todo-apps, etc.). It's not as though Apple releases apps then removes competing apps from the app store _because_ of the competition.
Either way, thanks for engaging. I doubt we agree, but it was good to explore the thought out some more.
Absolutely false. The video game industry has been doing this for 35 years, in every console since at least the NES.
[0]https://en.wikipedia.org/wiki/Atari_Games_Corp._v._Nintendo_...
If a company is ruled against on having their own app store on their own OS on their own devices, when they aren't even a monopoly-level player in the larger market, this will blow apart nearly any app store model out there.
I'll, uh, get my popcorn ready.
You don’t need a strict majority market share to be considered a monopoly in our legal system.
But I do agree with you on the merits. The relevant market ought to be mobile apps generally, not iOS apps. That's just not the question for which the US Supreme Court granted certiorari (as other comments have pointed out).
Apple isn't in the same position, at all.
> Microsoft had something like a 97% marketshare. Apple is nowhere near that.
Whether a company is a monopoly or not seems to depend a lot how the market in question is defined, for instance:
Apple has a 100% marketshare in the distribution of iOS apps. Monopoly-era AT&T had far less than a 100% marketshare in electricity-powered devices.
By the reasoning of your statement, all that's needed to establish a 100% monopoly is a sufficiently narrow definition of market. Walmart has a 100% monopoly on products (legally/officially) sold in Walmart stores. Do they have a monopoly as far as the FTC and courts are concerned?
https://www.ftc.gov/tips-advice/competition-guidance/guide-a...
EDIT: Fixed typo
But that's usually always true: 90s era Windows users had alternatives in the Macintosh and Sun workstations, and Monopoly-era AT&T users had alternatives in CB radios, etc.
That explainer you linked even uses language that excludes some competitor products: "Microsoft was found to have a monopoly over operating systems software for IBM-compatible personal computers" [emphasis mine].
That is a fair statement, but as far as the FTC is concerned that's probably not enough....
> By the reasoning of your stament [sic], all that's needed to establish a 100% monopoly is a sufficiently narrow definition of market.
I don't think the reasoning in my statement is sufficient to identify a monopoly, and it wasn't indented to be such. What I was trying to communicate is that you can't disprove a monopoly based on comparing marketshare numbers, and the actual determination is probably rather complicated and requires a lot of expert judgement.
I think Apple's business practices warrant careful and continuous antitrust scrutiny. If they're a monopoly, the form that takes will probably be significantly different than the one taken by 90s-era Microsoft.
It's also important to note that the FTC doesn't actually care about monopolies in all cases. They care about monopolies that arise from abuse and anti-competitive behavior or that are used to abuse consumers and competitors.
Show that Apple is in a monopoly position (as a player in the mobile hardware/software business space) and that they got there by way of anti-competitive behavior. Or that they've abused this position to artificially control pricing and other things. That's what needs to happen to establish an anti-trust case against them.
Right, and Steam has a 100% marketshare in the distribution of apps available on Steam.
Now, obviously there's wrinkles here and I'm not trying to be disingenuous and claim that these are identical scenarios. But you see how this quickly gets subtle, yes?
The supreme court granted cert on one question:
"Whether consumers may sue for antitrust damages anyone who delivers goods to them, even where they seek damages based on prices set by third parties who would be the immediate victims of the alleged offense."
(This is apple's statement of the question, and thus necessarily is tilted in how they see things)
The petition summary has more details and is quite short: http://www.scotusblog.com/wp-content/uploads/2017/10/17-204-...
There is a circuit split on this issue, which is likely why the supreme court took it. It's mostly about indirect purchasers vs direct purchasers. Indirect purchasers cannot sue, only direct purchasers can, mainly because it's really hard to apportion damages properly.
The previous major case on distribution monopolization was an eight circuit case about ticketmaster, Campos v. Ticketmaster Corp, https://caselaw.findlaw.com/us-8th-circuit/1097030.html. Section II of that opinion is a fairly readable rundown of the issue of direct vs indirect purchasing and who gets to sue.
Ticketmaster held that people paying greater distribution fees to ticketmaster as a result of their monopoly could not sue, as they are indirect purchasers.
The ninth circuit, in the apple case, held differently, holding that apple was selling directly to consumers, regardless of whether app developers got to set price. The opinion, which is also quite readable, is here: https://www.leagle.com/decision/infco20170112133. Again, i'd just read the part starting with "plaintiffs are direct purchasers"
Personally, i think the dissent in ticketmaster (and the ninth circuit) got it right. This is also what the ninth circuit explicitly says. In these models, only the people at the bottom make sense as the people to sue, as when you control distribution carefully like this, they are the only injured party.
Here's the case for manufacturer's standing: the manufacturer (app developer) might argue that the distributor's (Apple's) monopoly on distribution hurts them just as much if not more since the inflated price means they're selling less quantity than they would in a non-monopolized marketplace. Even though they technically set the price, having to pay Apple's rake on the App Store means that they must inflate their prices by at least 30% to bring them back to the price they'd otherwise sell at in the absence of the distributor.
In any event, I thought the case was a dog on the merits. How can Apple possibly be a monopolist, despite their 100% share of application sales on iOS, since the relevant market is for app-capable cell phones -- not iOS. Plenty of folks, the majority in fact, vote with their dollars by buying Android devices.
So I think the class action itself would be difficult to win even if it were allowed to go ahead. Apple could argue pretty convincingly that their app store "monopoly" does not drive up app prices.
Instead, they have to make the indirect argument you do, and it's unclear what the harm is. They are not paying 30% more, the consumer is. There's no data to suggest they are selling less. Who is really injured?
The same issue arose in ticketmaster - outside of consumers, everyone else has a really hard time showing injury.
Meanwhile, the consumers, who directly pay the monopoly fee, are directly injured.
A law firm could easily pay a number of app makers to try this out in exchange for the data, and then make a huge class action out of this.
I think the big challenge is that there are a number of confounding factors, like Apple's ranking algorithms.
I'm not sure you really want law firms doing this. The recent practice of people investing into litigation has not exactly done wonders for anyone.
In your test just cutting the 30% „Apple tax“, the developer would still profit from these discounted gift cards. But it’s not the developer giving the discount from his cut, but Apple from the 30%. Moreover, the 30% covers not only handling and processing App Store Infrastructure and sales, but as well the editorial sections of the App Store promoting news apps daily. There already exist reports on how this editorial content boosts app sales.
So, your test would still take all this for granted and therefore would be highly skewed. The data would not be „statistically significant“ at all.
You may buy iTunes cards. I've never bought them, nor even looked at them. I don't know which of us is more representative, but I don't think that invalidates the broad strokes of a test like I describe.
Or do I have this wrong?
Basically, is this actually the right person to be suing over this (it's pretty complex, and i'm removing a tremendous amount of nuance).
Plaintiffs bear the burden of proving standing. However, in most motions about standing and appeals of those motions, all facts will be assumed to be true.
This is because most standing dismissal is for "failure to state a claim on which relief can be granted" (FRCP rule 12(b)(6)) . Which means, basically,"even if all the facts are true, you still have no case". So they do the obvious thing, and for the purposes of that motion (and appeals of it, like here), they assume all the facts are true :)
Apple is providing an instantaneous, global distribution network.
Save your ability to market the app, you can effectively guarantee the same experience across billions of disparate devices. The open web can not provide the same piece of mind in terms of security to the end user.
The app vetting process isn't free.
Apple is ensuring quality within the App Store. Bad apps still get past Apple's vetting rules and are retroactively denied all the time. This creates extremely a strong sense of trust between the customer and Apple. Consumers become less and less risk-averse when it comes to downloading new apps from the App Store. Again, I'd argue this runs counter to the open web due to its long history of leaks, hacks, privacy violations, phishing attempts, etc. The Apple App Store currently has the highest bar for an "open" ecosystem of independently-developed software.
Apple provides the service of the App Store at its own expense.
The App Store has pulled in $100BB over 10 years which is great, but I'm sure they'd turn it off in a heartbeat if it consistently caused serious security breaches within the phone.
Tim Cook has gone on record so many times about the personal and private nature of the phone. Whether it's possible or not for a rogue app to circumvent Apple's numerous security safeguards is irrelevant as security is a policy Apple takes extremely seriousl; maybe to their own detriment.
Apple has a history of providing basic, free alternatives to apps that monopolize particular verticals within the App Store.
Calculator, Flashlight, the various flavors of Timer functionality, the new ARKit Ruler app, etc. I don't view these Apple-provided apps as akin to drug stores offering basic alternatives to things like Tylenol etc. it's good for the overall App market economy as it should stem the rise of local monopolies.
Ironically, the only app in which Apple does not offer an alternative is the App Store. The App Store isn't an alternative, it's simply the only way to download apps.
I do see a future where phones will have a heavily-reduced version of iOS that offers a small subset of Apple-created apps without the App Store. The numbers don't lie, most iPhone users do not download apps, or only download less than 10 apps over the lifetime of the phone.
At the end of the day, apps must be vetted for quality because Apple has a brand to maintain. They simply can't allow apps that seriously compromise the performance of the phone or the privacy of the data on it. It's not within the realm of an allowable reality as per Apple policy.
The 30% taken by Apple may be eclipsed by the App Store ad revenue. I assume they'll greatly reduce the 30% cut moving forward as the App Store ad revenue increases.
More specifically, they've payed out $100BB to developers
In many cases Apple has done the R&D and then productized entirely new hardware and software interfaces which apps leverage. When you develop on iOS you stand on the shoulder of a giant who has enabled, through extraordinary investment of labor and capital, a significant portion of the actual end-user experience of running any given app.
One might even say about 30% of that overall experience is Apple’s own work product in the first place.
All that is before you even get to the extremely valuable services actually provided by the small piece of the puzzle which is itself called the “App Store”.