Actually I do think it matters if Apple is technically a monopoly, as laws are technical documents. If you agree Apple is not a monopoly then the worst thing you can say is, "I don't think Apple is being very nice."
And Apple is not forcing anyone to write ios apps. They are curating a store. Should lawmakers dictate to Walmart which products to stock or how much to buy and sell them for?
Laws are technical document, and as I keep saying, legally a company does not need to be a monopoly to get the law to interfere against it. IIRC, the test in the US is "market power" + "harm to customer welfare", and there's a good case to be made that Apple meets it.
Apple is not forcing anyone to write iOS apps, Microsoft and IBM did not force anyone either. Still, the law acted, because anti-competitive market behaviour is illegal.
The law (Sherman Act) does actually say that “Every person who shall monopolize, or attempt to monopolize ... any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony.” The test you mentioned is basically an attempt to explain the meaning of this contentious word “monopolize.”
> Courts do not require a literal monopoly before applying rules for single firm conduct; that term is used as shorthand for a firm with significant and durable market power — that is, the long term ability to raise price or exclude competitors. That is how that term is used here: a "monopolist" is a firm with significant and durable market power. Courts look at the firm's market share, but typically do not find monopoly power if the firm (or a group of firms acting in concert) has less than 50 percent of the sales of a particular product or service within a certain geographic area.
The Sherman Act is not the only relevant law here; the Clayton Act is relevant as law. (And was passed because the Sherman Act was too narrow). You do not need to be a monopoly to violate the Clayton Act, and most antitrust legislation nowadays is I believe brought under that and not the Sherman Act.
In this case the Sherman Act is relevant because all of Epic's federal claims are brought under the Sherman Act. (There are some California specific claims too.)
However, it is true that some of Epic's claims were brought under Section 1 of the Sherman Act which do not necessarily require monopoly power. (Section 1 has to deal with unreasonable restraints of trade, whereas Section 2 deals with monopolies.)
The legal proceeding terrified IBM to the point the PC became an open system, so they definitely had a market effect.
The MS case was different, but some elements are similar (use of private APIs; ability to choose default apps which is still not complete in iOS), and some are things MS never dreamt they could do.
IBM didn’t open up because of suit on mainframes. They really didn’t care about the personal computer market and just got open source parts and paid MS a little money for the operating system.
The use of “private APIs” is a red herring. Every software developer for the last forty years knows about the concept of a public interface that they promise not to change and private implementation details. Some languages force it and others do it by convention.
IBM did wish to maintain control, that's why they copyrighted the BIOS. But when Compaq reversed engineer it, it was obvious that there was no way to sue without inviting more legal scrutiny.
My other point is that some Apple app store apps can use APIs that every other app would get banned for. People complained about that when it came MS; It's not better when Apple does it.
That also isn’t true. Compaq had to do a clean room implementation so it wouldn’t get sued. The anti-trust suit was dropped in 1983 - around the same time that Compaq reverse engineered the BIOS.
Epic specifically brought several Sherman Act section 2 claims against Apple. The first step of proving a section 2 claim is establishing monopoly power.
So even though there are some antitrust violations (e.g. price fixing or bid rigging) where monopoly power is indeed irrelevant, it is very specifically relevant in the context of Epic's lawsuit against Apple.
Very broadly speaking it's perfectly legal to have a monopoly on something, and Apple has a monopoly on the thing they created, and that's fine.
It's generally illegal to use a monopoly on one thing to acquire a monopoly on another thing when that harms society, and that is the claim here.
Microsoft alone created windows, that's fine. Microsoft used their monopoly on windows to gain monopolies on other pieces of software, and that was problematic.
1) They use their market power over something they created in order to gain advantage in a market they did not create (payment processors). There's no technical reason to link the two except that's it's good for Apple's bottom line.
2) Apple's app store is like running a Mall where Apple rents store, or Apple being a landlord renting apartments. The agreement to receive rents comes with implied duties like allow fair competition, and Apple overtly giving themselves undue advantage violates that.
Also have to mention apple is charging a fee way outside the norm for a payment processor at 30%.
Have to also remember to deploy to the app store and a lot of the development has to be done on a Mac. So it is really equivalent of saying you must buy the factory from us, only sell in our store, and only use our payment processor.
> Apple's app store is like running a Mall where Apple rents store
Apple's app store is the store, not a mall, 100% build, owned and operated by Apple. Developers are goods suppliers, like milk to Wallmart. Want a better deal? Build your own store or sell elsewhere. You cannot expect Wallmart stocking your empty milk bottles for free with a printed message "now you can buy milk on milk.com"
The typical store model also has the store owner selecting products, paying in advance to the suppliers, and assuming partial liability - especially over fakes. Comparing it to a mall makes more sense IMHO, given that it's the developer that initiates the transaction here, pays to the mall owner, and assumes all liability.
P.S. Quite a lot of products in I buy in $LOCALSTORE link to the manufacturer's web site, and more than a few manufacturers allow direct sales. No store here would imagine it could force the manufacturer to use only its preferred credit method in their web site.
How should Apple get paid for a free app that has it's own payment system? Apple created a phone, IDE, language and entire ecosystem and from day 1 has charged 30%. They have not increased that as their marketshare increased. Should Apple be forced to allow an app to be released free and then accept payments outside of Apple?
Oh, I don't know. They could ask the developer for a fee. How about that?
To answer your question, yes, Apple should be forced to allow other payment system. The current anti-competitive arrangement both disadvantages non-Apple payment systems, and prevents users from switching to Android if they wish (since subscriptions are managed by Apple, and it difficult to access that without an Apple device...).
Put Fortnite into a box and put it on the shelf at a store which will take 30% in margin on that sale (probably more). Should that store also be forced to allow buyers to purchase it off their store shelf through a payment to someone else? Of course not.
It's payment in-app that are the issue, not payments to the store. Apple played no role in generating these in-app payments, and shouldn't have the right to mandate use of its payment solution. If you bought Fortnite at a store, would the store get money over purchases made later inside the Fortnite application? Of course not.
Because their current behaviour is anti-competitive rent-seeking, and limits innovation.
Anti-competitive by mandating use of their products, rent seeking because 30% is absurd (but alas legal), and as one twitter thread pointed out, if the web hadn't already existed, no existing web browser could possibly have passed Apple's app store policies.
I guess I don't see them mandating the use of their products. You can have your app on iOS or not. I just don't see the moral issue here. They've never raised the prices and have had this price since they had 0 3rd party apps so I have a hard time seeing it as rent seeking. Do they make a lot of money? Yes, they do, but is that enough to force them not too? I'm just not convinced of that yet.
Apple are mandating the use of their Apple ID and Apple Payment System (aka products). The first might have a security rational, the second does not, yet devs must pay Apple's fees even if they are higher than alternatives[, a defacto price raise].
It used to be possible to get payments on iOS going without using Apple's payments, before Apple set their eyes upon that market.
Why shouldn't they? They got paid when the customer bought the phone. If the "free" app is handling payment processing and distribution itself, what is Apple doing that justifies receiving any money at all?
The ide, language, servers, and platform to support the app aren't worth anything? Really not trying to be dense here, I just don't see how this isn't just Epic thinking a price is too high and wanting to pay less.
I guess I just don't see why they should be required to support those other things. I agree that they could do that, but I don't see the reason to force them to. They created what they wanted because they didn't like the current offerings at the time–Epic or anyone else is free to do the same.
> I guess I just don't see why they should be required to support those other things.
Because not supporting them is anti-competitive. Markets require competition to operate. It is obviously not feasible for an individual app developer to build their own phone hardware and operating system and convince everyone to switch to it from iPhones just in order to avoid Apple's app distribution system, so requiring that is unreasonable.
By this tortured logic Tesla should be forced to have a marketplace of self-driving implementations which their cars must support because that is technically a market.
> But you've arbitrarily defined what a market is.
It's not arbitrary. It's based on whether there are reasonable substitutes. Exxon is a reasonable substitute for Chevron when buying gasoline for your 2020 Ford F150, because you can use either one. Google Play is not a reasonable substitute for the Apple App Store when buying apps for your 2020 Apple iPhone, because you can't actually use it for that.
> By this tortured logic Tesla should be forced to have a marketplace of self-driving implementations which their cars must support because that is technically a market.
It has nothing to do with forcing them to do something. They just shouldn't be able to prevent someone else from producing an autopilot implementation for their cars. And what's so unreasonable about that? It's plainly anti-competitive.
Because Epic is happy with the console makers, but they're not happy with Apple.
The console makers actually actually do things for Fornite, other than offering a download. Sony sells like a Fornite + Playstation bundle, and do marketing with them.
It shows they have a majority share of the mobile OS market in the US; therefore, they can basically act like they have a monopoly in the US. Everyone else is a distant second, so they can monopolize or attempt to monopolize the mobile app market.
That's not how any of this works. Majority share is a lot of power, but the theory of how monopolies work doesn't support the idea that anyone with a majority of the market has monopoly power.
It's most definitely how this works. Monopoly power isn't some binary attribute. It's not like you flip a switch one day from not being a monopoly to suddenly becoming a monopoly. Monopoly power is accrued over time with increasing market share. Very few companies have the kind of market share we are talking about here with Apple and the US mobile OS market. Take for example, Walmart, who many people think of being gigantic in the retail sector in the US. They only account for 16% of US retail sales. If Apple only had 16% of the US mobile OS market there wouldn't even be a discussion about anti-trust laws and Apple wouldn't have just made this announcement -> https://developer.apple.com/news/?id=84w3e5bm
"The kind of common theme is the abuse of their market power to maintain their market dominance, to crush competitors, to exclude folks from their platform and to earn monopoly rents."
But that also applies to every single current game console and
almost all other modern devices with app support, ranging from
smartwatches to home automation.
That doesn't seem like a monopoly to me. Apple has huge
competition on the mobile market. Windows Phone 8 only had
Microsoft's own app store, was that a monopoly with its <5%
market share? I think not.
> But that also applies to every single current game console and almost all other modern devices with app support, ranging from smartwatches to home automation.
That sounds like an argument that "every single current game console and almost all other modern devices with app support" are maintaining monopolies on app distribution on their platform, what's your point? Epic Games is not obligated in any way to sue every company breaking the law just because they chose to sue one that is.
Tim Sweeney has made some statements about this, to try and walk a line where, while the situation is equally true about game consoles, they shouldn't count/shouldn't be forced to be open because their platforms are less innately profitable. That is, consoles are sold at a loss and have a lot of R&D costs, and so they have more rights to maintain an exclusionary platform than Apple.
I can see the pragmatic sense in that argument, but I'm pessimistic and see it more as Tim trying to avoid destroying a relationship with strategically critical partners while achieving new strategic goals on mobile. Trying to have his cake and eat it too.
Let's assume your pessimistic case is exactly right, so what? He's allowed to sue one person who is breaking the law while not suing another one. He's allowed to eat the console slice of cake and complain to the courts that the apple slice of cake had the wrong color icing even if they both have the wrong color icing.
He's also allowed to believe that there is a stronger case against Apple and sue them first, and then sue the other people later if he wins the first suit convincingly, which is what I personally suspect is going to happen.
Yeah, but I'd imagine if someone offered you to have Steam on ps5, you'd jump in instantly. At least I would. I'd even pay more for the nice compact hardware if it is currently subsidized.
Apple is a monopoly that controls what applications can run on iPhones. Being a monopoly is not illegal in the US. What is illegal is for a monopoly to engage in predatory practices, which Apple clearly does.
I was referring to the specific point that is mentioned in the article, that Apple demanded 30% from Fortnite sales that had nothing to do with being listed in the store. Sorry if that wasn't clear.
