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Ask HN: Why aren't artificial platform monopolies covered by antitrust law?

2 points by disintegore ↗ HN
Take for instance any of the big-name video game consoles, most Apple devices, and a host of other things which may or may not successfully implement this business model, from digital set-top-boxes all the way to mechanical farm equipment.

We are sold classical computers with full multimedia and network capabilities, loaded with trusted computing modules that make it quasi-impossible for any software to be executed unless it was signed by the hardware vendor or some other trusted party. Typically this means the platform vendor either has complete control over what software is distributed or how it is distributed. In other words, an artificial monopoly.

It's really not clear to me why these schemes can operate at such a massive scale without any repercussions whatsoever. If Apple started selling electric cars that refuse to steer onto any road not owned by Apple itself, under the pretext that doing so protects you from potholes and whatnot, precisely nobody would accept that deal.

So is there simply no legal precedent there? No political motivation to go after such a big economic sector?

9 comments

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seydor
Because state antitrust laws were not prepared for the cases of state-within-a-state, or market-within-a-market. Normally the state would be the overseer of the market, and its antimonopoly laws ensure that the market is competitive. The regulatory function of the state has been replaced however by oligopolies which created sub-markets inside the state-overseen market, in many dimensions: Apple/Google, Visa/Mastercard, Cloud/providers etc.

The unfair advantage of these companies is that they can exploit their monopolies but still be immune from antitrust action because their own sub-markets are not bound by any kind of antimonopoly laws. Nominally the state sees 2 or 3 of them competing, hence they are immune from antitrust action as well. These companies don't even need to collude or form a cartel, since it s obviously beneficial for all of them to remain in position and just do nothing else. This will go on until, either a new thing comes along and replaces the internet , or , a new generation of anti-trust laws targets precisely those marketplaces.

warent
BTW The double-negative in your title is kind of confusing me. (They aren't not covered)
LatteLazy
For games consoles, they are an example of the "Razor and Blades" economic model.

https://en.wikipedia.org/wiki/Razor_and_blades_model

Also, it is not illegal to HAVE a monopoly, it is only illegal to ABUSE a monopoly. So as long as you are free to buy an unlocked computer system, and Sony are not over charging or bullying buyers/sellers etc, then Sony are not abusing you. So you have no complaint I'm afraid.

disintegore
It absolutely is abuse. Service degradation pushed through system updates which cannot be opted out of. Charging premiums over utilities that its consumers are already paying for. It is a predatory business model, nothing less.

I can think of three reasons why someone would opt into that, as opposed to "buying an unlocked computer system". The first being lacking the technical knowledge to understand that your machine is sold to you pre-compromised. The latter two being exclusive titles and the fact that your social circle may coax you into that platform, both of which throw "personal choice" out of the window.

This isn't just about video games either. My career field doesn't require me to use Gillette razors.

In any case, if there isn't a legal distinction between a monopoly that forms through incidence and one that was purposefully designed and planted into an already thriving market, there ought to be.

Dracophoenix
> In any case, if there isn't a legal distinction between a monopoly that forms through incidence and one that was purposefully designed and planted into an already thriving market, there ought to be.

Natural monopoly vs "abuse" of market power via "predatory" pricing/dumping/etc.

Of course, keep in mind that the companies you refer to are not monopolies by any definition the FTC has so far thrown at a wall. Just because your friends may segregate themselves based on the technology/brand they use does not make the company responsible for how you're friends choices affect you.

disintegore
Yes, they are responsible, because the chose to design the product that way, and they chose to misrepresent it, and they chose to forbid competitors to interact in their privileged space.

I still fail to see how engineering your own cryptographic monopoly and abusing it is different from abusing any other sort of monopoly.

Dracophoenix
> Yes, they are responsible, because the chose to design the product that way,

Are you going to blame every stabbing that's occurred on knife manufacturers? It's silly to think that people have enough agency to voluntary part with their own money yet somehow lack any to know and decide on what they're purchasing. No one's stopping anyone from buying a Jolla/Sailfish phone if their heart desires.

> and they chose to misrepresent it, and they chose to forbid competitors to interact in their privileged space.

I agree with you that Tim Cook has misrepresented his claimed stance on treating all developers equally. I can't speak for the others. Even so, that doesn't make Apple a monopoly. And forbidding competitors on its own store is well within the company's rights.

> I still fail to see how engineering your own cryptographic monopoly and abusing it is different from abusing any other sort of monopoly.

Cryptography is intellectual property. Proprietary computational cryptography existed years before the transistor. Just ask the NSA.

It's not abuse to keep one's mouth shut on the specifications or refuse to integrate into an interoperable standard. That is one's right as a property holder.

disintegore
It's disheartening that while I can point at demonstrable harm and conduct which matches what we commonly understand to be "anti-competitive" in both intent and effect, what I get in return is a handful of facile value statements. Yes, it may be that Apple has a legal right to sell you a walled garden system. Price fixing was also legal for most of human history. If your rights are harmful, they are abolished. That's how it's always been.

As it happens, the implementation details of platform security are typically not secret. It's the keys that are. The "intellectual property" in question is only the solution to a very well understood but computationally infeasible problem. It has no use or worth beyond protecting the vendor's restrictions on your device. This has precisely nothing to do with the tech being proprietary. You could implement a platform monopoly with nothing but FOSS tech. I'm starting to think you don't understand the technology very well.

For instance, It's not terribly difficult for security hackers to blow the door open on these systems even when they're proprietary and no public documentation or datasheet is supplied. George Hotz famously published the private keys for the PS3 and was sued into oblivion. You'll find this isn't about technology at all, but law.

The "just buy a Jolla/Sailfish phone" argument is a non-sequitur. For starters, who says I haven't? That doesn't mean I need to accept that my friends and family are getting fleeced. Let's assume I'm also purely self-interested, who do you suppose they go to when they can't get basic computing tasks done because it conflicts with their hardware vendor's interests?