7 ms·

For a long time I've been confused about the rules of monopolies. Microsoft got into a lot of trouble when they bundled IE into Windows so much so that the US t

For a long time I've been confused about the rules of monopolies. Microsoft got into a lot of trouble when they bundled IE into Windows so much so that the US threatened heavily to break up the company. Fast forward a decade later and apple, google and amazon bundle a crazy amount of unrelated services into their platforms without the regulators raising an eyebrow...

deleted 8y ago
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Angostura 8y ago
At that time Microsoft completely dominated desktop operating systems to the extent that it was an effective monopoly. It them attempted to leverage that position to try and squash other browser makers. I agree that Apple is trying to squash Spotify, but I don't believe it doesn't have an effective monopoly on mobile phones.
- berbec 8y ago
  Microsoft DID squash other browsers. Netscape died and the code lived on, but the profitable company was no more.
- number_six 8y ago
  Isn't their argument about the Apple Store and being able to put their product into the Apple Ecosystem? I didn't read any of it as saying they have a monopoly on phones.
- sinnoh 8y ago
  no one is arguing it has a monopoly on mobile phones, the argument is and has always been that they have a monopoly on the ios software ecosystem they've built.
  - Angostura 8y ago
    Yes, but from an anti-trust perspective, 'a monopoly on this thing I built' isn't an issue - arguably every company has a monopoly on that. It becomes an issue if 'this thing I built' captures an overwhelming economic sector, to the extent that consumers have no choice. Currently consumers do have a choice - and more chose Android than Apple.
    - ac29 8y ago
      At what point would the already multi-billion dollar iPhone market become an "overwhelming economic sector" on its own in your opinion?
      - Angostura 8y ago
        At the point where there is a threat to the Android ecosystem, with the possibility that app writers, consumers and handset manufacturers are forced to quit the platform because it isn't viable.
selectodude 8y ago
Microsoft bundled IE for the express purpose of putting Netscape out of business and used their market power to kill netscape. It’s not illegal to be a monopoly, it’s illegal to abuse that monopoly position. Google can make Maps and chrome and whatever, but they can’t force Samsung to not bundle a competeing maps app.
- wool_gather 8y ago
  Counterpoint (and I say this as someone who currently makes a living via Apple's platform): Apple reserves a fair bit of system integration/functionality to their first-party apps. For example, on iOS no navigation app other than Apple Maps can actively navigate when the device is locked. I'm not familiar enough with Android to know if Google does this as well.
  - jonhohle 8y ago
    But they don’t have a monopoly in any of the spaces you’ve mentioned (or any space at all).
  - binomialxenon 8y ago
    Android has plenty of its own problems, but not so much in this category. Android users can set default browser, email, SMS app, etc., where iOS does not allow this. Any navigation app can work while the device is locked, it's enabled by a permission called "Draw over other apps", IIRC. In my opinion, the problem with Android is not that you can't add to its functionality, which you can, but that you can't effectively limit Google's privacy-invasive functionality (much worse than iOS's) unless you can unlock the bootloader.
bilbo0s 8y ago
I was there, it was more like the US threatened to break up Microsoft, and then Microsoft, their army of lawyers, and the courts laughed the government out of the room. The government had to settle for lesser sanctions. ("Sanctions" which, in my opinion, were not sanctions at all.) >Fast forward a decade later and apple, google and amazon bundle a crazy amount of unrelated services into their platforms without the regulators raising an eyebrow... That's because the "sanctions" solidified that practice as explicitly legal. So now EVERYONE started doing it. The only thing you needed to do was to allow other people to put their unrelated services on your platform too. You could even charge other people for that if you wanted. (And you didn't even have to let unrelated services on your platform in certain cases. For instance, at the time, Windows was riddled with viruses and bugs, so where the safety or security of the consumer was concerned, you didn't have to allow or even have certain services on your platform. Little known loophole there.) The problem was really that the issues on the face of it, to someone like me, a young developer activist at the time, were not really the questions dealt with when you finally get into court. The law is about the law, and there was no getting around it. I became convinced that what we should be doing is trying to change the law. I'm just to old to put that kind of effort into agitating for changed laws any longer. EDIT: It's probably only fair for me to add that the courts turned out to be right in the Microsoft case. History has shown that information processing paradigms can change on a dime. (PC to mobile). The law is there to provide reasonable safeguards to all actors in a market, and ensure that competition is fair. It's just that "fair" in the eyes of the law, looked a bit different than "fair" did in my own opinion.
jetti 8y ago
The difference is that Netscape Navigator was a paid application. Microsoft was bundling their product, which was free, with their OS. They OS was dominating the market, which meant that majority of people didn't have to buy from Netscape. They were forcing out the competition. When Apple, Google and Amazon are releasing unrelated services into their platforms it isn't to starve out competitors but just expand their business. They aren't, as far as I know, drastically undercutting the prices of their services to levels that aren't sustainable for other companies to compete.
- JangoSteve 8y ago
  > They aren't, as far as I know, drastically undercutting the prices of their services to levels that aren't sustainable for other companies to compete. The linked Spotify page says exactly the opposite. > Because Apple Music doesn’t have to pay the 30% IAP charge, they are able to hugely undercut us and charge €9.99. To our fans, this just looked like we were ripping you off
  - jetti 8y ago
    I was responding more so to the bundling of services rather than to the App Store specifically. Though, you could argue that the App Store and/or Apple Music are services that are bundled
  - chipotle_coyote 8y ago
    This particular part of the argument doesn't make a lot of sense to me, at least looking at the US pricing. Apple Music is $9.99 a month; Spotify Premium is $9.99 a month and includes Hulu. If not paying the IAP charge means Apple could "hugely undercut" Spotify, then shouldn't Apple Music be, well, cheaper? By at least 30%? (N.B.: I'm not defending the specific 30% cut that Apple takes or any of their other demands, just going "hmm" at the bit you've quoted.)
    - lifekaizen 8y ago
      Spotify is saying they had to increase the price to $13 to sell on the store. This price was not popular so they left the store to maintain the $10 price across the board. This was back in 2016, not what is offered now. > 2014 June > So, we give IAP a try. That means we are now charged Apple's 30% tax and sadly have to increase our price for our fans... to €12.99 a month. > 2015 June > Because Apple Music doesn’t have to pay the 30% IAP charge, they are able to hugely undercut us and charge €9.99. To our fans, this just looked like we were ripping you off > 2016 May > We opt out of Apple's payment system and the artificially uncompetitive price we had to charge for using it
jonhohle 8y ago
They bundled _while_ having a monopoly. They could have bundled or they could have had a monopoly, but doing both is where it crosses the anti-trust line since your customers are effectively captive. What does Apple have a monopoly on? What does Amazon have a monopoly on? Google arguably has a monopoly on search which could put them in an unfavorable position should an antitrust case be brought against them (maybe why they added DDG to a default search engine choice in chrome, see judge, there are other search options!).
- bduerst 8y ago
  Google doesn't have a monopoly on search. Having a popular or high-quality product is not the same as having no competition. You can run an ecommerce business online entirely through instagram if you wanted to. Amazon theoretically is abusing it's market power by being selective about which products it sells in it's stores. When they removed competing AppleTV/Chromecast products from their own and seller lines, to promote their firestick, that was monopolistic behavior. There's also arguments that Amazon is promoting their own line of products on their platform as well, by replicating products that end up being successful, but this is a new area for antitrust that needs to be sussed out.
  - number_six 8y ago
    Isn't that what Apple is doing in this case with Apple Music vs. Spotify?
  - sinnoh 8y ago
    really the entire concept of a 'store' has been bastardized by these companies (another thing we can thank apple for) and is a misdirect. the locked down software platforms wherein users can't install anything on their own devices without the owning company's say-so is the artificial monopoly. they're trying to get away with adding things like device management now to weasel out of it but in reality these are artificially high barriers to entry for any competing software distribution services or 'stores'. when Amazon can barely even get a foothold in a competing ecosystem with its own 'app store' you know it's anticompetitive and it's working.
diffeomorphism 8y ago
> Microsoft got into a lot of trouble when they bundled IE I think it is an impressive PR achievement by Microsoft that you remember it this way. As a more recent example, when Google was fined related to Android, they tried to spin it as "being fined for bundling the play store". That is of course not what they were fined for, but it makes a nice memorable headline.
cbhl 8y ago
The problem is that Apple isn't the leader, by market share, in cell phones. That would be Android.
rifung 8y ago
I work for Google, opinions are my own. I believe this is because previously antitrust law was used when things were bad for competition but nowadays the thinking is more that antitrust laws should be used when things cause higher prices. https://qz.com/work/1460402/google-facebook-and-amazon-benefit-from-an-outdated-definition-of-monopoly/ https://qz.com/work/1460402/google-facebook-and-amazon-benef... https://www.theatlantic.com/magazine/archive/2018/07/lina-khan-antitrust/561743/ https://www.theatlantic.com/magazine/archive/2018/07/lina-kh...
- will_brown 8y ago
  >nowadays the thinking is more that antitrust laws should be used when things cause higher prices. That’s exactly what is happening...Spotify can offer price $x to their customers but Apple’s rules are forcing the price to be $x + 30% Apple Tax. Spotify has articulated numerous acts Apple has taken to ensure Spotify can’t circumvent the Apple Tax...Apple coming out with a competing App and being able to charge $x sans their own tax is just the icing on the anticompetitive cake. This is one of the biggest issues with Google as well...where company was advertising on Google for $x, once google uses its position to determine they want to compete Google starts competing with their own customers for the same ads jacking up the ad pricing. This basically ensures both Apple and Google can use their dominate market position and platforms to determine markets, market prices, and then unfairly compete with the market incumbents by offering the original $x price without the google/Apple Tax. There is no leaving the Apple/Google platforms at that point or you are basically waiving the white flag and telling your customers to go over to the Apple/Google product.

deleted 8y ago

[deleted]

Angostura 8y ago

At that time Microsoft completely dominated desktop operating systems to the extent that it was an effective monopoly. It them attempted to leverage that position to try and squash other browser makers. I agree that Apple is trying to squash Spotify, but I don't believe it doesn't have an effective monopoly on mobile phones.

berbec 8y ago
Microsoft DID squash other browsers. Netscape died and the code lived on, but the profitable company was no more.
number_six 8y ago
Isn't their argument about the Apple Store and being able to put their product into the Apple Ecosystem? I didn't read any of it as saying they have a monopoly on phones.
sinnoh 8y ago
no one is arguing it has a monopoly on mobile phones, the argument is and has always been that they have a monopoly on the ios software ecosystem they've built.
- Angostura 8y ago
  Yes, but from an anti-trust perspective, 'a monopoly on this thing I built' isn't an issue - arguably every company has a monopoly on that. It becomes an issue if 'this thing I built' captures an overwhelming economic sector, to the extent that consumers have no choice. Currently consumers do have a choice - and more chose Android than Apple.
  - ac29 8y ago
    At what point would the already multi-billion dollar iPhone market become an "overwhelming economic sector" on its own in your opinion?
    - Angostura 8y ago
      At the point where there is a threat to the Android ecosystem, with the possibility that app writers, consumers and handset manufacturers are forced to quit the platform because it isn't viable.

selectodude 8y ago

Microsoft bundled IE for the express purpose of putting Netscape out of business and used their market power to kill netscape. It’s not illegal to be a monopoly, it’s illegal to abuse that monopoly position. Google can make Maps and chrome and whatever, but they can’t force Samsung to not bundle a competeing maps app.

wool_gather 8y ago
Counterpoint (and I say this as someone who currently makes a living via Apple's platform): Apple reserves a fair bit of system integration/functionality to their first-party apps. For example, on iOS no navigation app other than Apple Maps can actively navigate when the device is locked. I'm not familiar enough with Android to know if Google does this as well.
- jonhohle 8y ago
  But they don’t have a monopoly in any of the spaces you’ve mentioned (or any space at all).
- binomialxenon 8y ago
  Android has plenty of its own problems, but not so much in this category. Android users can set default browser, email, SMS app, etc., where iOS does not allow this. Any navigation app can work while the device is locked, it's enabled by a permission called "Draw over other apps", IIRC. In my opinion, the problem with Android is not that you can't add to its functionality, which you can, but that you can't effectively limit Google's privacy-invasive functionality (much worse than iOS's) unless you can unlock the bootloader.

bilbo0s 8y ago

I was there, it was more like the US threatened to break up Microsoft, and then Microsoft, their army of lawyers, and the courts laughed the government out of the room. The government had to settle for lesser sanctions. ("Sanctions" which, in my opinion, were not sanctions at all.) >Fast forward a decade later and apple, google and amazon bundle a crazy amount of unrelated services into their platforms without the regulators raising an eyebrow... That's because the "sanctions" solidified that practice as explicitly legal. So now EVERYONE started doing it. The only thing you needed to do was to allow other people to put their unrelated services on your platform too. You could even charge other people for that if you wanted. (And you didn't even have to let unrelated services on your platform in certain cases. For instance, at the time, Windows was riddled with viruses and bugs, so where the safety or security of the consumer was concerned, you didn't have to allow or even have certain services on your platform. Little known loophole there.) The problem was really that the issues on the face of it, to someone like me, a young developer activist at the time, were not really the questions dealt with when you finally get into court. The law is about the law, and there was no getting around it. I became convinced that what we should be doing is trying to change the law. I'm just to old to put that kind of effort into agitating for changed laws any longer. EDIT: It's probably only fair for me to add that the courts turned out to be right in the Microsoft case. History has shown that information processing paradigms can change on a dime. (PC to mobile). The law is there to provide reasonable safeguards to all actors in a market, and ensure that competition is fair. It's just that "fair" in the eyes of the law, looked a bit different than "fair" did in my own opinion.

jetti 8y ago

The difference is that Netscape Navigator was a paid application. Microsoft was bundling their product, which was free, with their OS. They OS was dominating the market, which meant that majority of people didn't have to buy from Netscape. They were forcing out the competition. When Apple, Google and Amazon are releasing unrelated services into their platforms it isn't to starve out competitors but just expand their business. They aren't, as far as I know, drastically undercutting the prices of their services to levels that aren't sustainable for other companies to compete.

JangoSteve 8y ago
> They aren't, as far as I know, drastically undercutting the prices of their services to levels that aren't sustainable for other companies to compete. The linked Spotify page says exactly the opposite. > Because Apple Music doesn’t have to pay the 30% IAP charge, they are able to hugely undercut us and charge €9.99. To our fans, this just looked like we were ripping you off
- jetti 8y ago
  I was responding more so to the bundling of services rather than to the App Store specifically. Though, you could argue that the App Store and/or Apple Music are services that are bundled
- chipotle_coyote 8y ago
  This particular part of the argument doesn't make a lot of sense to me, at least looking at the US pricing. Apple Music is $9.99 a month; Spotify Premium is $9.99 a month and includes Hulu. If not paying the IAP charge means Apple could "hugely undercut" Spotify, then shouldn't Apple Music be, well, cheaper? By at least 30%? (N.B.: I'm not defending the specific 30% cut that Apple takes or any of their other demands, just going "hmm" at the bit you've quoted.)
  - lifekaizen 8y ago
    Spotify is saying they had to increase the price to $13 to sell on the store. This price was not popular so they left the store to maintain the $10 price across the board. This was back in 2016, not what is offered now. > 2014 June > So, we give IAP a try. That means we are now charged Apple's 30% tax and sadly have to increase our price for our fans... to €12.99 a month. > 2015 June > Because Apple Music doesn’t have to pay the 30% IAP charge, they are able to hugely undercut us and charge €9.99. To our fans, this just looked like we were ripping you off > 2016 May > We opt out of Apple's payment system and the artificially uncompetitive price we had to charge for using it

jonhohle 8y ago

They bundled _while_ having a monopoly. They could have bundled or they could have had a monopoly, but doing both is where it crosses the anti-trust line since your customers are effectively captive. What does Apple have a monopoly on? What does Amazon have a monopoly on? Google arguably has a monopoly on search which could put them in an unfavorable position should an antitrust case be brought against them (maybe why they added DDG to a default search engine choice in chrome, see judge, there are other search options!).

bduerst 8y ago
Google doesn't have a monopoly on search. Having a popular or high-quality product is not the same as having no competition. You can run an ecommerce business online entirely through instagram if you wanted to. Amazon theoretically is abusing it's market power by being selective about which products it sells in it's stores. When they removed competing AppleTV/Chromecast products from their own and seller lines, to promote their firestick, that was monopolistic behavior. There's also arguments that Amazon is promoting their own line of products on their platform as well, by replicating products that end up being successful, but this is a new area for antitrust that needs to be sussed out.
- number_six 8y ago
  Isn't that what Apple is doing in this case with Apple Music vs. Spotify?
- sinnoh 8y ago
  really the entire concept of a 'store' has been bastardized by these companies (another thing we can thank apple for) and is a misdirect. the locked down software platforms wherein users can't install anything on their own devices without the owning company's say-so is the artificial monopoly. they're trying to get away with adding things like device management now to weasel out of it but in reality these are artificially high barriers to entry for any competing software distribution services or 'stores'. when Amazon can barely even get a foothold in a competing ecosystem with its own 'app store' you know it's anticompetitive and it's working.

diffeomorphism 8y ago

> Microsoft got into a lot of trouble when they bundled IE I think it is an impressive PR achievement by Microsoft that you remember it this way. As a more recent example, when Google was fined related to Android, they tried to spin it as "being fined for bundling the play store". That is of course not what they were fined for, but it makes a nice memorable headline.

cbhl 8y ago

The problem is that Apple isn't the leader, by market share, in cell phones. That would be Android.

rifung 8y ago

I work for Google, opinions are my own. I believe this is because previously antitrust law was used when things were bad for competition but nowadays the thinking is more that antitrust laws should be used when things cause higher prices. https://qz.com/work/1460402/google-facebook-and-amazon-benefit-from-an-outdated-definition-of-monopoly/ https://qz.com/work/1460402/google-facebook-and-amazon-benef... https://www.theatlantic.com/magazine/archive/2018/07/lina-khan-antitrust/561743/ https://www.theatlantic.com/magazine/archive/2018/07/lina-kh...

will_brown 8y ago
>nowadays the thinking is more that antitrust laws should be used when things cause higher prices. That’s exactly what is happening...Spotify can offer price $x to their customers but Apple’s rules are forcing the price to be $x + 30% Apple Tax. Spotify has articulated numerous acts Apple has taken to ensure Spotify can’t circumvent the Apple Tax...Apple coming out with a competing App and being able to charge $x sans their own tax is just the icing on the anticompetitive cake. This is one of the biggest issues with Google as well...where company was advertising on Google for $x, once google uses its position to determine they want to compete Google starts competing with their own customers for the same ads jacking up the ad pricing. This basically ensures both Apple and Google can use their dominate market position and platforms to determine markets, market prices, and then unfairly compete with the market incumbents by offering the original $x price without the google/Apple Tax. There is no leaving the Apple/Google platforms at that point or you are basically waiving the white flag and telling your customers to go over to the Apple/Google product.