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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
by 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 agoYou don't need to be a monopoly to be convicted of anti-trust violations.
- AnthonyMouse 10y agoYou'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.
- neotek 10y agoI can buy Candy Crush from Amazon and Google Play, isn't that the same thing? It won't run on my iPhone, but it's fundamentally the same app, isn't it? I'm asking this genuinely, from a position of ignorance, interested in hearing an answer.
- umanwizard 10y ago"It won't run on my iPhone" is a pretty gigantic difference, big enough IMO to thoroughly contradict the claim that the two apps are "the same thing". Anyway, you could also fly across the country to Target and buy "the same thing" there (in GP's analogy).