11 ms·

US appeals court revives antitrust lawsuit against Apple

114 points by dvdhnt 10y ago

btown 10y ago
Here's the actual decision: http://law.justia.com/cases/federal/appellate-courts/ca9/14-15000/14-15000-2017-01-12.html http://law.justia.com/cases/federal/appellate-courts/ca9/14-... Most of the document is about the complex procedural history of the case. The meat of the new decision is on page 20 onwards: > Apple argues that it does not sell apps but rather sells “software distribution services to developers.” In Apple’s view, because it sells distribution services to app developers, it cannot simultaneously be a distributor of apps to app purchasers. Apple analogizes its role to the role of an owner of a shopping mall that “leases physical space to various stores.” Apple’s analogy is unconvincing. In the case before us, third-party developers of iPhone apps do not have their own “stores.” Indeed, part of the anti-competitive behavior alleged by Plaintiffs is that, far from allowing iPhone app developers to sell through their own “stores,” Apple specifically forbids them to do so, instead requiring them to sell iPhone apps only through Apple’s App Store. ... > [W]e rest our analysis, as compelled by Hanover Shoe, Illinois Brick, UtiliCorp, and Delaware Valley, on the fundamental distinction between a manufacturer or producer, on the one hand, and a distributor, on the other. Apple is a distributor of the iPhone apps, selling them directly to purchasers through its App Store. Because Apple is a distributor, Plaintiffs have standing under Illinois Brick to sue Apple for allegedly monopolizing and attempting to monopolize the sale of iPhone apps. (IANAL)
- Steeeve 10y ago
  > In Apple’s view, because it sells distribution services to app developers, it cannot simultaneously be a distributor of apps to app purchasers. What?!? It's the _only_ distributor of apps to app purchasers.
  - k1t 10y ago
    It seems to be Apple's view that it is the app developers who are distributing the apps (using Apple's distribution service). Seems akin to FedEx saying they do not distribute packages, they merely sell distribution services to shippers.
- baldfat 10y ago
  > Apple analogizes its role to the role of an owner of a shopping mall that “leases physical space to various stores.” Sounds like a company store in a mining town. The company pays your pay checks, charges you high rent and high prices at the company store (Which is also the only store) https://en.wikipedia.org/wiki/Company_town#Paternalism https://en.wikipedia.org/wiki/Company_town#Paternalism
mbenjaminsmith 10y ago
"[T]he obvious solution is to compel Apple to let people shop for applications wherever they want, which would open the market and help lower prices" Is that a joke? I'd love to be able to sell iOS software directly to users. Even if there were no viable channels outside of the App Store having the choice would make me rest a lot easier. But to state that "Apple's monopoly" has driven the price of software up is to be laughably out of touch with reality. Maybe this has to be argued from the point of view of the consumer and they thought "monopoly driving prices down" wouldn't be a very good case?
- vosper 10y ago
  Prices could be lowered by a store that takes a smaller commission, while passing the same amount of money onto the developer. That would lower prices for consumers without hurting developers. Or there could be commission tiers that mean that the more successful the app the greater percentage the developer gets.
  - prklmn 10y ago
    The separate stores should compete, as they are doing now. If one becomes more appealing, users and developers can switch. I think of the logic behind your argument as saying that Walgreens should be forced to let CVS use a portion of its stores to sell in (for free), even though there's a CVS across the street....there's nothing stopping anyone from going to shop across the street as it currently stands, just as there is no outside force stopping anyone from switching to an android to be able to download play store apps. These 2 year contracts are an impediment, but these are signed at the consumer's discretion.
    - vosper 10y ago
      Except that going across the street to CVS to get the exact same product at a better price is very different to switching from iPhone to Android. Apart from just the big outlay for new hardware, you have to figure out how to migrate from (e.g.) iCloud, what happens with your chats in iMessage with all your friends, the different way that Android actually works. Don't underestimate the degree to which small differences confuse non-techy users. Even just upgrading from one iPhone to another, or installing an iOS update, can be confusing. No-ones going to do that to get slightly cheaper apps (if they are actually cheaper, which I doubt, because I don't believe that the Google App Store is actually competing with the Apple App Store).
protomyth 10y ago
"iPhone app purchasers may sue Apple Inc over allegations that the company monopolized the market for iPhone apps by not allowing users to purchase them outside the App Store, leading to higher prices, a U.S. appeals court ruled on Thursday." If this is deemed illegal then its going to get quite interesting on both the phones and game consoles. Welcome back Atari 2600.
- sjwright 10y ago
  > its going to get quite interesting on both the phones and game consoles A key insight. Many companies sell products that in turn have marketplaces which they wring some control over. Game consoles is indeed an interesting one, because it parallels so perfectly. If Apple must allow competitor markets within iOS, so must Sony and Microsoft. (Note that physical game sales also require paying a commission to the console maker, so it's a different market but the same business model.) Or cable TV. Does Comcast have a monopoly on selling additional cable channels and pay-per-view through my Comcast set top box? How is that any different?
  - astrodust 10y ago
    I went into McDonald's and I couldn't buy a Whopper. What's up with that? I'm going to sue!
    - umanwizard 10y ago
      This is an invalid analogy for multiple reasons but for starters, you don't give an argument that this unnaturally increases the price of hamburgers.
      - wooter 10y ago
        Just cause i like playing with analogies, should mcD have to sell any and all soda?
        yellowapple 10y ago
IBM 10y ago
This is a good reason for Apple to avoid going further down market. With 43% market share [1] they're unlikely to be considered to have monopoly power by courts [2]: >Following Alcoa and American Tobacco, courts typically have required a dominant market share before inferring the existence of monopoly power. The Fifth Circuit observed that "monopolization is rarely found when the defendant's share of the relevant market is below 70%."(22) Similarly, the Tenth Circuit noted that to establish "monopoly power, lower courts generally require a minimum market share of between 70% and 80%."(23) Likewise, the Third Circuit stated that "a share significantly larger than 55% has been required to establish prima facie market power"(24) and held that a market share between seventy-five percent and eighty percent of sales is "more than adequate to establish a prima facie case of power."(25) >It is also important to consider the share levels that have been held insufficient to allow courts to conclude that a defendant possesses monopoly power. The Eleventh Circuit held that a "market share at or less than 50% is inadequate as a matter of law to constitute monopoly power."(26) The Seventh Circuit observed that "[f]ifty percent is below any accepted benchmark for inferring monopoly power from market share."(27) A treatise agrees, contending that "it would be rare indeed to find that a firm with half of a market could individually control price over any significant period."(28) When they're capturing over 90% of the profit in the smartphone industry there's no advantage to increasing market share, and some pretty big costs. [1] http://www.macrumors.com/2017/01/11/iphone-31-smartphone-sales/ http://www.macrumors.com/2017/01/11/iphone-31-smartphone-sal... [2] https://www.justice.gov/atr/competition-and-monopoly-single-firm-conduct-under-section-2-sherman-act-chapter-2 https://www.justice.gov/atr/competition-and-monopoly-single-...
- lightedman 10y ago
  You don't need to be a monopoly to be convicted of anti-trust violations.
- AnthonyMouse 10y ago
  You're assuming the relevant market is smartphones but we're talking about app stores. Suppose Walmart is the only retailer on the East Coast and Target is the only retailer on the West Coast. You're saying, isn't it great for Target that they only have 43% total market share so they can't be a monopoly. But they're clearly a monopoly on the West Coast, and it isn't practical for people on the West Coast to buy their merchandise from a Walmart in Boston or Atlanta, which implies they're different markets. You can't buy an iOS app from Amazon or Google Play.
sjwright 10y ago
Having multiple middlemen selling the same app to the same customer isn't an incentive for the developer to lower their prices. Given that app developers set their own prices, Apple's effect on prices with their store "monopoly" would be hard capped at 30%. And unlike a traditional retail store, the whole process is exceptionally transparent — every developer pays the same 30%, every developer gets boned by the same restrictions. Anyway, there is a competitor to the App Store, it's the Play Store and it's available to any consumer who wishes to shop there. Apple certainly doesn't have a monopoly on app sales.
- lightedman 10y ago
  "Anyway, there is a competitor to the App Store, it's the Play Store and it's available to any consumer who wishes to shop there." Except Android apps don't work on iPhone.
  - sjwright 10y ago
    What a remarkable insight. The thing is, the law doesn't concern itself with iOS app sales, but rather the overall market of app sales. Is the overall market of app sales healthy? Yes, it most certainly is. The reality is Apple doesn't control the marketplace of mobile apps. They don't even have a majority of it. People are free to choose whatever handset they like. And they do.
    - lightedman 10y ago
      "People are free to choose whatever handset they like. And they do." Except for those tied to a specific device for work reasons. Blackberry, anyone (that is, back in the day?)
      - lightedman 10y ago
        And meanwhile, my point is proven: "The policy also applies to private phones used by employees for work purposes" Thank you Deutsche Bank for the vindication. http://www.smh.com.au/business/banking-and-finance/deutsche-bank-switches-off-text-messaging-20170113-gtrdg9.html http://www.smh.com.au/business/banking-and-finance/deutsche-...
lightedman 10y ago
I wonder how bad this is going to get with the recently announced French report on flight MS80 being downed by faulty Apple equipment (battery fire from either iPad or iPhone 6S.) I smell lawyers. Lots of them.
- umanwizard 10y ago
  How is that related to this case?
  - lightedman 10y ago
    It's related because it's Apple, and I can well imagine that a fire caused by a faulty iPhone battery, killing dozens of people and downing an airplane, is going to be a pretty costly lawsuit to fight/settle along with this anti-trust suit?
    - icebraining 10y ago
      Apple has an higher revenue than the GDP of most countries, including some Western European ones, and an healthy profit margin. I think they can afford to fight two parallel lawsuits.
      - lightedman 10y ago
        GDP doesn't matter when it comes to angry families with pitchforks and torches. Start thinking about the reputational and potential future stock damages from just having this information coming out.
edko 10y ago
There used to be a rule for the Mac App Store (I don't know if it is there anymore) that forbade developers from selling the same app at a lower price somewhere else. Wouldn't this be a case of anti-competitive price-fixing?
- Steko 10y ago
  No, this is how stores work. Wal-Mart will also not stock your game if you are selling it for half MSRP on your website.
  - wallace_f 10y ago
    Further, IOS developers use proprietary Apple technology to develop their apps... So with that in mind would Wal-Mart not be more guilty of anti-trust violations than Apple?
  - tw04 10y ago
    Walmart doesn't also have the ability to make buying the good from somewhere else inherently more difficult. It would be the equivalent of Walmart paying someone to stand in front of Target stores claiming to be an expert on the product you want to buy and saying "You know, the Target version of this product is very unsafe. You should really, really consider getting it from Walmart. I'm going to body block you from entering the store because I'm worried about you buying it from over there." What do I mean by that? Gatekeeper.
    - Steko 10y ago
      > Walmart doesn't also have the ability to make buying the good from somewhere else inherently more difficult. Yes they can and do regularly. The extreme example is of course an exclusive contract where the vendor agrees to make it impossible to buy the good elsewhere.
  - edko 10y ago
    I think there is a difference, though: I'd imagine Walmart would buy a certain amount of copies of your game, and they would negotiate their purchase price, squeezing you as much as they can. Then they would mark it up and sell it on their own. If they see that you are selling it for half the price on your website, then that gives them a stronger purchasing argument to lower your price. Apple, on the other hand, is imposing restrictions on which price you must sell it to third parties, and, that, I think, is illegal.
wallace_f 10y ago
Sorry if this is obvious - how is this different from the Google Play store?
- swang 10y ago
  just a guess... google does not hold a monopoly over app selling in the android program space. there's the amazon store and i'm pretty sure one of the chinese hardware android companies have one.
  - thebaer 10y ago
    Yes, anyone can make their own Android app store and charge whatever they want for the apps there. http://lmgtfy.com/?q=android+app+stores http://lmgtfy.com/?q=android+app+stores
- runevault 10y ago
  You can install other app stores on Android. Amazon for example has one you can install. I believe it requires enabling app side loading, but it is perfectly possible.
- umanwizard 10y ago
  Well, whether it is or not, why does that matter? "Google does it too" isn't a valid defense if it does turn out Apple is found to have done something wrong.
- ptx 10y ago
  On Android phones you can just toggle a setting to allow apps from outside Google Play and then install whatever you want however you want. You can e.g. send your program over FTP or Bluetooth and click the APK file to install it. Or you can use F-Droid with a repository of your choice: https://f-droid.org/ https://f-droid.org/ Note that the permissions system, app signing (with any key as long as it's the same for subsequent versions of the app) and other safety features are built into the system so they still work the same - security it not dependent on the Play Store.
- yellowapple 10y ago
bostand 10y ago
This is ridiculous!! There is no problem with limiting software distribution channels for your own hardware in order to have a meaningful quality assurance. What the DoJ should instead focus on is the crazy rules apple imposes in order to limit any competition. For example you can not publish apps that compete with their own stuff (that's why we don't have a real chrome or Firefox in iphone). Even more ridiculous is that you are not even allowed to mention apple competitors. Saying this app also support android wear will get you thrown out of the store.
- xxs 10y ago
  Take the ban of any JIT alike executable - Java, Javascript engines, virtually any web rendered.
- nfriedly 10y ago
  I was working on a demo web app that does speech-to-text transcription. This requires that the browser support microphone access, which Safari doesn't. The site originally said that it worked in Chrome Firefox and Edge, but I finally got rid of that text and replaced it with feature detection at load-time because of how many times iPhone users reported it not working in Chrome or Firefox on their iPhone. (It works fine in Chrome and Firefox on Android.)
- tracker1 10y ago
  They have a complete vertical monopoly in a dominant (not lead) integration environment where migration to competitors is restrictive. Also, when I buy a toaster, I should be allowed to take it apart and replace the power cable if I so need/choose to. Apple is stopping me from doing the same with my iThing(tm), which is wrong.
  - bostand 10y ago
    That's a pretty bad analogy :( A better analogy would be that your Apple toaster only works with Apple power outlets and only accepts bread made or approved by Apple.
    - 10y ago
meanduck 10y ago
AFAIU antitrust lawsuit triggers when you break an implicit agreement with customers i.e. breaking trust. But thats not what happened here. App Store is sole distributor of apps. Customers knows this. Customers may even rely on it. So what gives ? Specifically what can a business in general do to avoid such fate ?
- empath75 10y ago
  A trust is a monopoly and has nothing to do with consumer trust.
  - sbuk 10y ago
    Abd for it to beantitrust, it must be abused in some manner. This is in doubt.
- dragonwriter 10y ago
  > AFAIU antitrust lawsuit triggers when you break an implicit agreement with customers i.e. breaking trust. Incorrect. Antitrust occurs when you violate the laws regulating use of market power, which have little to do with customer trust ("trust", in this sense, refers to a monopoly, not to consumer trust in the firm.)
josho 10y ago
An interesting fall out from this case could be the requirement for platforms to provide open and equal access to their APIs. So specifically in this case the APIs for installing an app. But thinking more generally the APIs for iCloud Drive or Siri as well. Just think of being able to replace iCloud Drive with your own implementation to sync to local Drive, S3, etc.
hamandcheese 10y ago
I don't know if it's significant from a legal standpoint, but for as long as there's been an App Store, it's been a walled garden. Yet Apple still became the most profitable phone manufacturer, despite that. It's not like they took advantage of their position in the market to force some new anticompetitive/anti consumer behavior the same way Comcast might.
- tracker1 10y ago
  Most monopolies are only sued (or considered in anti-trust) when they are in a dominant position. In this case, there are two dominant phone platforms... Apple's iOS (iStore only), and Android (multiple phone vendors, Play Store and options to load whatever software a user wants). In the Apple case, they've taken whatever legal means possible to stop side-loading and alternative stores, dropped apps that try to sell via other paths. They have a vertical stranglehold on the platform, and are in a dominant position.
  - AlphaSite 10y ago
    It's entirely possible to sideload on iOS, all you need is an OSX machine and a free Dev account. Practical, no. But possible.
    - tracker1 10y ago
      And how do you sell an app to iOS users that don't have an OSX machine and a dev account?
      - ajharrison 10y ago
        You don't? To build iOS apps you need X-Code. So you need a Mac.
    - greggman 10y ago
      Where can I get a free OSX machine?
temp246810 10y ago
I agree that apple is mean, but disagree they should be forced to open up their platform. Let's not forgot that apple has tiny market share compared to google, they are only going after them because of their wealth. 2nd, let's not forget this was a completely natural monopoly. Apple didn't use the success of one thing to create a monopoly in another, iPhone was tiny when they introduced the app store. Is that the rule? If you're successful you have to share in that way? Lastly, while I don't dream of ever having even a fraction of a fraction of the success apples had, it does suck to think that if you build something others want, others can sue you for access to the platform. Bullshit. If you don't like apples rules, don't play.
- dvdhnt 10y ago
  I think there are probably consumers who view the "monopoly" as a benefit. True or not, the perception can be that the iOS ecosystem is better of for it in terms of quality and security.
  - dragonwriter 10y ago
    > I think there are probably consumers who view the "monopoly" as a benefit That's true of most monopolies, including ones that clearly and flagrantly violate antitrust laws.
- deleted 10y ago
  [deleted]
- nrjdhsbsid 10y ago
  The monopoly is that phones have become so important for daily life that being able to install software on them is nearly a requirement for normal living. It's like having two car manufacturers and they both recommend "approved" gas where they scrape 30% of the revenue as a tax. Anyone that wants to make their gas "approved" has to pay 30% of the revenue. The difference between apple and google is that Google hides a little switch in the glove compartment that lets you use any gas if you want to. Apple on the other hand will void your warranty and try their hardest to break your car if you dare use unapproved gas or try to modify the car to use it You could argue that you could just not drive a car if you didn't want to pay extra for approved gas... The core issue is that Apple has created a marketplace for something so pervasive in daily life and has a complete monopoly on it. If the marketplace was smaller or phones less important consumers could easily say "I don't like the rules" and walk away
brody182 10y ago
"Wolf Haldenstein Adler Freeman & Herz" this should tell you everything you need to know, there is money involved.
Keverw 10y ago
Interesting. I wonder how this will turn out in the end... Part of me feels like if Apple has to allow apps outside of the app store, maybe they can then void your warranty. Like if you open up your computer and start installing parts on your own... If you install a virus, etc it should be the user's fault for using a non trusted store. Why should Apple have to support somthing they didn't authorize? I haven't seen a antivirus app ever featured on iOS, but on my Android devices I have... I thought it was kinda funny to install a antivirus on a phone or tablet in the first place - but I guess they are just computers in the end still and more to worry about when you leave them wide app.

114 points by dvdhnt 10y ago

btown 10y ago

Here's the actual decision: http://law.justia.com/cases/federal/appellate-courts/ca9/14-15000/14-15000-2017-01-12.html http://law.justia.com/cases/federal/appellate-courts/ca9/14-... Most of the document is about the complex procedural history of the case. The meat of the new decision is on page 20 onwards: > Apple argues that it does not sell apps but rather sells “software distribution services to developers.” In Apple’s view, because it sells distribution services to app developers, it cannot simultaneously be a distributor of apps to app purchasers. Apple analogizes its role to the role of an owner of a shopping mall that “leases physical space to various stores.” Apple’s analogy is unconvincing. In the case before us, third-party developers of iPhone apps do not have their own “stores.” Indeed, part of the anti-competitive behavior alleged by Plaintiffs is that, far from allowing iPhone app developers to sell through their own “stores,” Apple specifically forbids them to do so, instead requiring them to sell iPhone apps only through Apple’s App Store. ... > [W]e rest our analysis, as compelled by Hanover Shoe, Illinois Brick, UtiliCorp, and Delaware Valley, on the fundamental distinction between a manufacturer or producer, on the one hand, and a distributor, on the other. Apple is a distributor of the iPhone apps, selling them directly to purchasers through its App Store. Because Apple is a distributor, Plaintiffs have standing under Illinois Brick to sue Apple for allegedly monopolizing and attempting to monopolize the sale of iPhone apps. (IANAL)

Steeeve 10y ago
> In Apple’s view, because it sells distribution services to app developers, it cannot simultaneously be a distributor of apps to app purchasers. What?!? It's the _only_ distributor of apps to app purchasers.
- k1t 10y ago
  It seems to be Apple's view that it is the app developers who are distributing the apps (using Apple's distribution service). Seems akin to FedEx saying they do not distribute packages, they merely sell distribution services to shippers.
baldfat 10y ago
> Apple analogizes its role to the role of an owner of a shopping mall that “leases physical space to various stores.” Sounds like a company store in a mining town. The company pays your pay checks, charges you high rent and high prices at the company store (Which is also the only store) https://en.wikipedia.org/wiki/Company_town#Paternalism https://en.wikipedia.org/wiki/Company_town#Paternalism

mbenjaminsmith 10y ago

"[T]he obvious solution is to compel Apple to let people shop for applications wherever they want, which would open the market and help lower prices" Is that a joke? I'd love to be able to sell iOS software directly to users. Even if there were no viable channels outside of the App Store having the choice would make me rest a lot easier. But to state that "Apple's monopoly" has driven the price of software up is to be laughably out of touch with reality. Maybe this has to be argued from the point of view of the consumer and they thought "monopoly driving prices down" wouldn't be a very good case?

vosper 10y ago
Prices could be lowered by a store that takes a smaller commission, while passing the same amount of money onto the developer. That would lower prices for consumers without hurting developers. Or there could be commission tiers that mean that the more successful the app the greater percentage the developer gets.
- prklmn 10y ago
  The separate stores should compete, as they are doing now. If one becomes more appealing, users and developers can switch. I think of the logic behind your argument as saying that Walgreens should be forced to let CVS use a portion of its stores to sell in (for free), even though there's a CVS across the street....there's nothing stopping anyone from going to shop across the street as it currently stands, just as there is no outside force stopping anyone from switching to an android to be able to download play store apps. These 2 year contracts are an impediment, but these are signed at the consumer's discretion.
  - vosper 10y ago
    Except that going across the street to CVS to get the exact same product at a better price is very different to switching from iPhone to Android. Apart from just the big outlay for new hardware, you have to figure out how to migrate from (e.g.) iCloud, what happens with your chats in iMessage with all your friends, the different way that Android actually works. Don't underestimate the degree to which small differences confuse non-techy users. Even just upgrading from one iPhone to another, or installing an iOS update, can be confusing. No-ones going to do that to get slightly cheaper apps (if they are actually cheaper, which I doubt, because I don't believe that the Google App Store is actually competing with the Apple App Store).

protomyth 10y ago

"iPhone app purchasers may sue Apple Inc over allegations that the company monopolized the market for iPhone apps by not allowing users to purchase them outside the App Store, leading to higher prices, a U.S. appeals court ruled on Thursday." If this is deemed illegal then its going to get quite interesting on both the phones and game consoles. Welcome back Atari 2600.

sjwright 10y ago
> its going to get quite interesting on both the phones and game consoles A key insight. Many companies sell products that in turn have marketplaces which they wring some control over. Game consoles is indeed an interesting one, because it parallels so perfectly. If Apple must allow competitor markets within iOS, so must Sony and Microsoft. (Note that physical game sales also require paying a commission to the console maker, so it's a different market but the same business model.) Or cable TV. Does Comcast have a monopoly on selling additional cable channels and pay-per-view through my Comcast set top box? How is that any different?
- astrodust 10y ago
  I went into McDonald's and I couldn't buy a Whopper. What's up with that? I'm going to sue!
  - umanwizard 10y ago
    This is an invalid analogy for multiple reasons but for starters, you don't give an argument that this unnaturally increases the price of hamburgers.
    - wooter 10y ago
      Just cause i like playing with analogies, should mcD have to sell any and all soda?
      - yellowapple 10y ago

IBM 10y ago

This is a good reason for Apple to avoid going further down market. With 43% market share [1] they're unlikely to be considered to have monopoly power by courts [2]: >Following Alcoa and American Tobacco, courts typically have required a dominant market share before inferring the existence of monopoly power. The Fifth Circuit observed that "monopolization is rarely found when the defendant's share of the relevant market is below 70%."(22) Similarly, the Tenth Circuit noted that to establish "monopoly power, lower courts generally require a minimum market share of between 70% and 80%."(23) Likewise, the Third Circuit stated that "a share significantly larger than 55% has been required to establish prima facie market power"(24) and held that a market share between seventy-five percent and eighty percent of sales is "more than adequate to establish a prima facie case of power."(25) >It is also important to consider the share levels that have been held insufficient to allow courts to conclude that a defendant possesses monopoly power. The Eleventh Circuit held that a "market share at or less than 50% is inadequate as a matter of law to constitute monopoly power."(26) The Seventh Circuit observed that "[f]ifty percent is below any accepted benchmark for inferring monopoly power from market share."(27) A treatise agrees, contending that "it would be rare indeed to find that a firm with half of a market could individually control price over any significant period."(28) When they're capturing over 90% of the profit in the smartphone industry there's no advantage to increasing market share, and some pretty big costs. [1] http://www.macrumors.com/2017/01/11/iphone-31-smartphone-sales/ http://www.macrumors.com/2017/01/11/iphone-31-smartphone-sal... [2] https://www.justice.gov/atr/competition-and-monopoly-single-firm-conduct-under-section-2-sherman-act-chapter-2 https://www.justice.gov/atr/competition-and-monopoly-single-...

lightedman 10y ago
You don't need to be a monopoly to be convicted of anti-trust violations.
AnthonyMouse 10y ago
You're assuming the relevant market is smartphones but we're talking about app stores. Suppose Walmart is the only retailer on the East Coast and Target is the only retailer on the West Coast. You're saying, isn't it great for Target that they only have 43% total market share so they can't be a monopoly. But they're clearly a monopoly on the West Coast, and it isn't practical for people on the West Coast to buy their merchandise from a Walmart in Boston or Atlanta, which implies they're different markets. You can't buy an iOS app from Amazon or Google Play.

sjwright 10y ago

Having multiple middlemen selling the same app to the same customer isn't an incentive for the developer to lower their prices. Given that app developers set their own prices, Apple's effect on prices with their store "monopoly" would be hard capped at 30%. And unlike a traditional retail store, the whole process is exceptionally transparent — every developer pays the same 30%, every developer gets boned by the same restrictions. Anyway, there is a competitor to the App Store, it's the Play Store and it's available to any consumer who wishes to shop there. Apple certainly doesn't have a monopoly on app sales.

lightedman 10y ago
"Anyway, there is a competitor to the App Store, it's the Play Store and it's available to any consumer who wishes to shop there." Except Android apps don't work on iPhone.
- sjwright 10y ago
  What a remarkable insight. The thing is, the law doesn't concern itself with iOS app sales, but rather the overall market of app sales. Is the overall market of app sales healthy? Yes, it most certainly is. The reality is Apple doesn't control the marketplace of mobile apps. They don't even have a majority of it. People are free to choose whatever handset they like. And they do.
  - lightedman 10y ago
    "People are free to choose whatever handset they like. And they do." Except for those tied to a specific device for work reasons. Blackberry, anyone (that is, back in the day?)
    - lightedman 10y ago
      And meanwhile, my point is proven: "The policy also applies to private phones used by employees for work purposes" Thank you Deutsche Bank for the vindication. http://www.smh.com.au/business/banking-and-finance/deutsche-bank-switches-off-text-messaging-20170113-gtrdg9.html http://www.smh.com.au/business/banking-and-finance/deutsche-...

lightedman 10y ago

I wonder how bad this is going to get with the recently announced French report on flight MS80 being downed by faulty Apple equipment (battery fire from either iPad or iPhone 6S.) I smell lawyers. Lots of them.

umanwizard 10y ago
How is that related to this case?
- lightedman 10y ago
  It's related because it's Apple, and I can well imagine that a fire caused by a faulty iPhone battery, killing dozens of people and downing an airplane, is going to be a pretty costly lawsuit to fight/settle along with this anti-trust suit?
  - icebraining 10y ago
    Apple has an higher revenue than the GDP of most countries, including some Western European ones, and an healthy profit margin. I think they can afford to fight two parallel lawsuits.
    - lightedman 10y ago
      GDP doesn't matter when it comes to angry families with pitchforks and torches. Start thinking about the reputational and potential future stock damages from just having this information coming out.

edko 10y ago

There used to be a rule for the Mac App Store (I don't know if it is there anymore) that forbade developers from selling the same app at a lower price somewhere else. Wouldn't this be a case of anti-competitive price-fixing?

Steko 10y ago
No, this is how stores work. Wal-Mart will also not stock your game if you are selling it for half MSRP on your website.
- wallace_f 10y ago
  Further, IOS developers use proprietary Apple technology to develop their apps... So with that in mind would Wal-Mart not be more guilty of anti-trust violations than Apple?
- tw04 10y ago
  Walmart doesn't also have the ability to make buying the good from somewhere else inherently more difficult. It would be the equivalent of Walmart paying someone to stand in front of Target stores claiming to be an expert on the product you want to buy and saying "You know, the Target version of this product is very unsafe. You should really, really consider getting it from Walmart. I'm going to body block you from entering the store because I'm worried about you buying it from over there." What do I mean by that? Gatekeeper.
  - Steko 10y ago
    > Walmart doesn't also have the ability to make buying the good from somewhere else inherently more difficult. Yes they can and do regularly. The extreme example is of course an exclusive contract where the vendor agrees to make it impossible to buy the good elsewhere.
- edko 10y ago
  I think there is a difference, though: I'd imagine Walmart would buy a certain amount of copies of your game, and they would negotiate their purchase price, squeezing you as much as they can. Then they would mark it up and sell it on their own. If they see that you are selling it for half the price on your website, then that gives them a stronger purchasing argument to lower your price. Apple, on the other hand, is imposing restrictions on which price you must sell it to third parties, and, that, I think, is illegal.

wallace_f 10y ago

Sorry if this is obvious - how is this different from the Google Play store?

swang 10y ago
just a guess... google does not hold a monopoly over app selling in the android program space. there's the amazon store and i'm pretty sure one of the chinese hardware android companies have one.
- thebaer 10y ago
  Yes, anyone can make their own Android app store and charge whatever they want for the apps there. http://lmgtfy.com/?q=android+app+stores http://lmgtfy.com/?q=android+app+stores
runevault 10y ago
You can install other app stores on Android. Amazon for example has one you can install. I believe it requires enabling app side loading, but it is perfectly possible.
umanwizard 10y ago
Well, whether it is or not, why does that matter? "Google does it too" isn't a valid defense if it does turn out Apple is found to have done something wrong.
ptx 10y ago
On Android phones you can just toggle a setting to allow apps from outside Google Play and then install whatever you want however you want. You can e.g. send your program over FTP or Bluetooth and click the APK file to install it. Or you can use F-Droid with a repository of your choice: https://f-droid.org/ https://f-droid.org/ Note that the permissions system, app signing (with any key as long as it's the same for subsequent versions of the app) and other safety features are built into the system so they still work the same - security it not dependent on the Play Store.
yellowapple 10y ago

bostand 10y ago

This is ridiculous!! There is no problem with limiting software distribution channels for your own hardware in order to have a meaningful quality assurance. What the DoJ should instead focus on is the crazy rules apple imposes in order to limit any competition. For example you can not publish apps that compete with their own stuff (that's why we don't have a real chrome or Firefox in iphone). Even more ridiculous is that you are not even allowed to mention apple competitors. Saying this app also support android wear will get you thrown out of the store.

xxs 10y ago
Take the ban of any JIT alike executable - Java, Javascript engines, virtually any web rendered.
nfriedly 10y ago
I was working on a demo web app that does speech-to-text transcription. This requires that the browser support microphone access, which Safari doesn't. The site originally said that it worked in Chrome Firefox and Edge, but I finally got rid of that text and replaced it with feature detection at load-time because of how many times iPhone users reported it not working in Chrome or Firefox on their iPhone. (It works fine in Chrome and Firefox on Android.)
tracker1 10y ago
They have a complete vertical monopoly in a dominant (not lead) integration environment where migration to competitors is restrictive. Also, when I buy a toaster, I should be allowed to take it apart and replace the power cable if I so need/choose to. Apple is stopping me from doing the same with my iThing(tm), which is wrong.
- bostand 10y ago
  That's a pretty bad analogy :( A better analogy would be that your Apple toaster only works with Apple power outlets and only accepts bread made or approved by Apple.
  - 10y ago

meanduck 10y ago

AFAIU antitrust lawsuit triggers when you break an implicit agreement with customers i.e. breaking trust. But thats not what happened here. App Store is sole distributor of apps. Customers knows this. Customers may even rely on it. So what gives ? Specifically what can a business in general do to avoid such fate ?

empath75 10y ago
A trust is a monopoly and has nothing to do with consumer trust.
- sbuk 10y ago
  Abd for it to beantitrust, it must be abused in some manner. This is in doubt.
dragonwriter 10y ago
> AFAIU antitrust lawsuit triggers when you break an implicit agreement with customers i.e. breaking trust. Incorrect. Antitrust occurs when you violate the laws regulating use of market power, which have little to do with customer trust ("trust", in this sense, refers to a monopoly, not to consumer trust in the firm.)

josho 10y ago

An interesting fall out from this case could be the requirement for platforms to provide open and equal access to their APIs. So specifically in this case the APIs for installing an app. But thinking more generally the APIs for iCloud Drive or Siri as well. Just think of being able to replace iCloud Drive with your own implementation to sync to local Drive, S3, etc.

hamandcheese 10y ago

I don't know if it's significant from a legal standpoint, but for as long as there's been an App Store, it's been a walled garden. Yet Apple still became the most profitable phone manufacturer, despite that. It's not like they took advantage of their position in the market to force some new anticompetitive/anti consumer behavior the same way Comcast might.

tracker1 10y ago
Most monopolies are only sued (or considered in anti-trust) when they are in a dominant position. In this case, there are two dominant phone platforms... Apple's iOS (iStore only), and Android (multiple phone vendors, Play Store and options to load whatever software a user wants). In the Apple case, they've taken whatever legal means possible to stop side-loading and alternative stores, dropped apps that try to sell via other paths. They have a vertical stranglehold on the platform, and are in a dominant position.
- AlphaSite 10y ago
  It's entirely possible to sideload on iOS, all you need is an OSX machine and a free Dev account. Practical, no. But possible.
  - tracker1 10y ago
    And how do you sell an app to iOS users that don't have an OSX machine and a dev account?
    - ajharrison 10y ago
      You don't? To build iOS apps you need X-Code. So you need a Mac.
  - greggman 10y ago
    Where can I get a free OSX machine?

temp246810 10y ago

I agree that apple is mean, but disagree they should be forced to open up their platform. Let's not forgot that apple has tiny market share compared to google, they are only going after them because of their wealth. 2nd, let's not forget this was a completely natural monopoly. Apple didn't use the success of one thing to create a monopoly in another, iPhone was tiny when they introduced the app store. Is that the rule? If you're successful you have to share in that way? Lastly, while I don't dream of ever having even a fraction of a fraction of the success apples had, it does suck to think that if you build something others want, others can sue you for access to the platform. Bullshit. If you don't like apples rules, don't play.

dvdhnt 10y ago
I think there are probably consumers who view the "monopoly" as a benefit. True or not, the perception can be that the iOS ecosystem is better of for it in terms of quality and security.
- dragonwriter 10y ago
  > I think there are probably consumers who view the "monopoly" as a benefit That's true of most monopolies, including ones that clearly and flagrantly violate antitrust laws.
deleted 10y ago
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nrjdhsbsid 10y ago
The monopoly is that phones have become so important for daily life that being able to install software on them is nearly a requirement for normal living. It's like having two car manufacturers and they both recommend "approved" gas where they scrape 30% of the revenue as a tax. Anyone that wants to make their gas "approved" has to pay 30% of the revenue. The difference between apple and google is that Google hides a little switch in the glove compartment that lets you use any gas if you want to. Apple on the other hand will void your warranty and try their hardest to break your car if you dare use unapproved gas or try to modify the car to use it You could argue that you could just not drive a car if you didn't want to pay extra for approved gas... The core issue is that Apple has created a marketplace for something so pervasive in daily life and has a complete monopoly on it. If the marketplace was smaller or phones less important consumers could easily say "I don't like the rules" and walk away

brody182 10y ago

"Wolf Haldenstein Adler Freeman & Herz" this should tell you everything you need to know, there is money involved.

Keverw 10y ago

Interesting. I wonder how this will turn out in the end... Part of me feels like if Apple has to allow apps outside of the app store, maybe they can then void your warranty. Like if you open up your computer and start installing parts on your own... If you install a virus, etc it should be the user's fault for using a non trusted store. Why should Apple have to support somthing they didn't authorize? I haven't seen a antivirus app ever featured on iOS, but on my Android devices I have... I thought it was kinda funny to install a antivirus on a phone or tablet in the first place - but I guess they are just computers in the end still and more to worry about when you leave them wide app.