4 ms·

my guess is the FTC investigation into Apple's practices got them nervous. better to just cave than deal with anti-trust issues: http://voices.allthingsd.com/2

my guess is the FTC investigation into Apple's practices got them nervous. better to just cave than deal with anti-trust issues: http://voices.allthingsd.com/20100611/ftc-to-investigate-apples-conduct-in-mobile-app-market/ http://voices.allthingsd.com/20100611/ftc-to-investigate-app...

tptacek 16y ago
My guess is that only Apple knows why it changed the rules, but that anyone who can do a Google search can (a) read up on what antitrust means and (b) observe Apple's non-commanding share of the mobile market.
- mattmanser 16y ago
  True, but we're starting to live in a slightly weird world where once you buy a particular product which is a gateway to other products and services, the manufacturer is dictating in a very megalomaniac way on how you spend your money. And commanding huge sums from utterly controlling that marketplace. Like the XBox and iPhone. They may have a non-commanding share of mobiles, but they have a total monopoly on iPhone apps.
  - tptacek 16y ago
    Under that theory of law, every platform company in the world is subject to antitrust suits as the "monopoly provider of access to that platform". Twitter could be sued. 37signals could be sued. Fortunately, this simply isn't how antitrust law works.
    - notahacker 16y ago
      Microsoft's monopoly was only on Windows, which just happened to be the only viable option for most PC OEMs and browser developers. If owning 99.4% of the mobile app sales market (Gartner figure for 2009) and imposing restrictions which hinder the development of cross-platform apps doesn't deserve antitrust scrutiny, I'm really not sure what does.
      - tptacek 16y ago
        No, it was the only option for most PC OEMs, because Microsoft adopted anticompetitive licensing practices that explicitly punished OEMs financially for distributing anything but Windows with prominently-placed IE. Apple cannot control 99.4% of the mobile app market, regardless of what their current revenue share is, because they still control less than 30% of the market for app platforms. If Apple attempted to abuse their position in the market to the detriment of customers, customers would switch to other phones, which is easy because there are multiple vendors with approximately the same or greater market penetration. There is just no way to get around the fact that Apple does not control the mobile app market (yet). Coming up with the market model that maximizes revenue and one random Gartner stat does not make them a monopoly. Read the document I posted earlier; it's written for laypeople. Think of it this way: imagine Apple invented 3D animated wallpaper technology, and allowed people to create and sell wallpapers in a special wallpaper store. A year later, Samsung releases a phone that also has a 3D animated wallpaper store. By your logic, Apple would have nearly 100% share of the 3D animated wallpaper market, and would be subject to antitrust regulation.
        notahacker 16y ago
        OEMs wanting to offer a non-IE default browser had the unattractive options of switching Linux or incurring the financial penalties; iPhone developers barred from using "cross platform" tools had the unattractive option of switching to platforms that have shown relatively little potential to generate revenue or higher development costs. Because of their store cornering the market for paid apps, Apple is in the enviable position of being potentially able to reduce development on their competitors' platforms, thereby making customers less likely to switch as well as worse off overall. Irrespective of the letter of US antitrust law, that is something I feel _ought_ to be kept under scrutiny.
    - mattmanser 16y ago
      What theory of law? Notice the words 'weird' and 'starting to live', I am saying that this is new territory and as such the law hasn't even been tested yet. It may even result in new legislation. There is a huge gap between the monopolistic marketplaces that Apple and MS have setup and service providers like Twitter or 37signals who give api keys to anyone who asks. And why fortunately? Do you like having your freedoms curtailed? Do you like being vastly overcharged for things you know would be a lot less if competition was allowed?
- gte910h 16y ago
  Their app sales accounted for 85% plus of the paid app market.
  - tptacek 16y ago
    That's also not how antitrust works. Read: http://www.justice.gov/atr/public/reports/236681.pdf http://www.justice.gov/atr/public/reports/236681.pdf Read the intro to section 2, then skip to section 2 and read the first couple pages. Long story short: the acid test for "monopoly power" is, "if Apple jacked the prices up on iPhones, would its customers be unable to acquire reasonable substitutes." Since Apple has something less than 30% of the smart-phone market (note: that same DoJ doc says that market shares under 55% are probably prima facie excluded from antitrust enforcement), it's unreasonable to argue that consumers have no substitutes for iPhones. Apple also has a huge share of games involving catapulting birds and falling refrigerators and cars, but, well, read above.
    - gte910h 16y ago
      There is another store for which normal people can buy software for iOS devices? "would its customers be unable to acquire reasonable substitutes." If you look at the class "iOS software" which is only legitimately sold by one vendor, the very definition of a monopoly. If Apple raised the price of all iPhone apps to 200k tomorrow, there would be no reasonable substitute for software for the device. They do not have a monopoly of "mobile phones", they have a monopoly on "iOS software". Which is all sold by them (nonwithstanding tiny jailbroken stores). They do not have a monopoly on "Games about birds", as you can develop a substitute for that on other platforms which they do not control. You cannot however say they do not have a monopoly on the distribution of games about birds which run on iOS devices, because they clearly do. As iOS software makes up 85% or more of all paid sales, this IS a legitimate issue for Anti-trust legal system, at least good enough to get in front of a judge.
      - tptacek 16y ago
        You are hopping between two arguments to avoid having to deal with the weaknesses of either of them. On the one hand, you point out that Apple has a 100% monopoly on iOS applications. Of course, Twitter also has a 100% monopoly on Twitter apps. Surely nobody thinks Twitter has a monopoly. On the other hand, you point to profit share in the wider market of smartphone apps. But of course the problem there is that Apple has less than 30% of the market for smart phones, and so clearly can't monopolize the market for smartphone apps.
- deleted 16y ago
  [deleted]

tptacek 16y ago

My guess is that only Apple knows why it changed the rules, but that anyone who can do a Google search can (a) read up on what antitrust means and (b) observe Apple's non-commanding share of the mobile market.

mattmanser 16y ago
True, but we're starting to live in a slightly weird world where once you buy a particular product which is a gateway to other products and services, the manufacturer is dictating in a very megalomaniac way on how you spend your money. And commanding huge sums from utterly controlling that marketplace. Like the XBox and iPhone. They may have a non-commanding share of mobiles, but they have a total monopoly on iPhone apps.
- tptacek 16y ago
  Under that theory of law, every platform company in the world is subject to antitrust suits as the "monopoly provider of access to that platform". Twitter could be sued. 37signals could be sued. Fortunately, this simply isn't how antitrust law works.
  - notahacker 16y ago
    Microsoft's monopoly was only on Windows, which just happened to be the only viable option for most PC OEMs and browser developers. If owning 99.4% of the mobile app sales market (Gartner figure for 2009) and imposing restrictions which hinder the development of cross-platform apps doesn't deserve antitrust scrutiny, I'm really not sure what does.
    - tptacek 16y ago
      No, it was the only option for most PC OEMs, because Microsoft adopted anticompetitive licensing practices that explicitly punished OEMs financially for distributing anything but Windows with prominently-placed IE. Apple cannot control 99.4% of the mobile app market, regardless of what their current revenue share is, because they still control less than 30% of the market for app platforms. If Apple attempted to abuse their position in the market to the detriment of customers, customers would switch to other phones, which is easy because there are multiple vendors with approximately the same or greater market penetration. There is just no way to get around the fact that Apple does not control the mobile app market (yet). Coming up with the market model that maximizes revenue and one random Gartner stat does not make them a monopoly. Read the document I posted earlier; it's written for laypeople. Think of it this way: imagine Apple invented 3D animated wallpaper technology, and allowed people to create and sell wallpapers in a special wallpaper store. A year later, Samsung releases a phone that also has a 3D animated wallpaper store. By your logic, Apple would have nearly 100% share of the 3D animated wallpaper market, and would be subject to antitrust regulation.
      - notahacker 16y ago
        OEMs wanting to offer a non-IE default browser had the unattractive options of switching Linux or incurring the financial penalties; iPhone developers barred from using "cross platform" tools had the unattractive option of switching to platforms that have shown relatively little potential to generate revenue or higher development costs. Because of their store cornering the market for paid apps, Apple is in the enviable position of being potentially able to reduce development on their competitors' platforms, thereby making customers less likely to switch as well as worse off overall. Irrespective of the letter of US antitrust law, that is something I feel _ought_ to be kept under scrutiny.
  - mattmanser 16y ago
    What theory of law? Notice the words 'weird' and 'starting to live', I am saying that this is new territory and as such the law hasn't even been tested yet. It may even result in new legislation. There is a huge gap between the monopolistic marketplaces that Apple and MS have setup and service providers like Twitter or 37signals who give api keys to anyone who asks. And why fortunately? Do you like having your freedoms curtailed? Do you like being vastly overcharged for things you know would be a lot less if competition was allowed?
gte910h 16y ago
Their app sales accounted for 85% plus of the paid app market.
- tptacek 16y ago
  That's also not how antitrust works. Read: http://www.justice.gov/atr/public/reports/236681.pdf http://www.justice.gov/atr/public/reports/236681.pdf Read the intro to section 2, then skip to section 2 and read the first couple pages. Long story short: the acid test for "monopoly power" is, "if Apple jacked the prices up on iPhones, would its customers be unable to acquire reasonable substitutes." Since Apple has something less than 30% of the smart-phone market (note: that same DoJ doc says that market shares under 55% are probably prima facie excluded from antitrust enforcement), it's unreasonable to argue that consumers have no substitutes for iPhones. Apple also has a huge share of games involving catapulting birds and falling refrigerators and cars, but, well, read above.
  - gte910h 16y ago
    There is another store for which normal people can buy software for iOS devices? "would its customers be unable to acquire reasonable substitutes." If you look at the class "iOS software" which is only legitimately sold by one vendor, the very definition of a monopoly. If Apple raised the price of all iPhone apps to 200k tomorrow, there would be no reasonable substitute for software for the device. They do not have a monopoly of "mobile phones", they have a monopoly on "iOS software". Which is all sold by them (nonwithstanding tiny jailbroken stores). They do not have a monopoly on "Games about birds", as you can develop a substitute for that on other platforms which they do not control. You cannot however say they do not have a monopoly on the distribution of games about birds which run on iOS devices, because they clearly do. As iOS software makes up 85% or more of all paid sales, this IS a legitimate issue for Anti-trust legal system, at least good enough to get in front of a judge.
    - tptacek 16y ago
      You are hopping between two arguments to avoid having to deal with the weaknesses of either of them. On the one hand, you point out that Apple has a 100% monopoly on iOS applications. Of course, Twitter also has a 100% monopoly on Twitter apps. Surely nobody thinks Twitter has a monopoly. On the other hand, you point to profit share in the wider market of smartphone apps. But of course the problem there is that Apple has less than 30% of the market for smart phones, and so clearly can't monopolize the market for smartphone apps.
deleted 16y ago
[deleted]