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It's anticompetitive, but is it illegal? Is it unethical? Does Apple's favoritism of its own products on its platform mean competing products cannot exist on th

It's anticompetitive, but is it illegal? Is it unethical? Does Apple's favoritism of its own products on its platform mean competing products cannot exist on the platform, or that they're less capable/visible? There are many platforms which rigidly control what's allowed on it. For example, is Netflix comparable? Netflix can control which providers are represented on its platform.

max76 8y ago
To my understanding this is not illegal, and the ethics are debatable. I don't think Netflix is comparable. The App Store is a market place, where things are bought and sold. Netflix is not a consumer marketplace.
- throwawaymath 8y ago
  That's a fair point. On the other hand, Microsoft Windows wasn't a marketplace with respect to web browsers.
- rlucas 8y ago
  Netflix is most definitely a marketplace, more akin to the App Store than I think you're giving it credit for. Netflix shows a wide variety of content to the buyer, the buyer pays and consumes certain (but not all) of the content. The content owners are ultimately paid in a way that reflects the demand for their product relative to the others available in that marketplace. (It's not per-unit pricing with a rev share, but you still get paid more to license big blockbuster content than little-watched niche stuff.) Also similar to App Store, Netflix has certain "blessed" in-house products that it pays to create itself, and lists along side the externally-created products.
dalore 8y ago
Some markets it might be illegal, like in the EU. Netflix isn't comparable as you can choose any other content streaming services. And also you can use any ISP to access to Netflix.
aqme28 8y ago
> Does Apple's favoritism of its own products on its platform mean competing products cannot exist on the platform, or that they're less capable/visible? That is what Spotify is alleging, yes.
mrep 8y ago
Apple is most likely using predatory pricing against Spotify which is illegal [0]. I highly doubt Apple music is profitable at a price point of $10 once the 30% cut is taken into account. But since they also get the 30% cut back, they can subsidize their product while Spotify has to charge $10 at a loss or price it at $14 which is more than Apples price and makes the un-competitive. [0]: https://en.wikipedia.org/wiki/Predatory_pricing https://en.wikipedia.org/wiki/Predatory_pricing
- throwawaymath 8y ago
  I don't think you've substantiated your first claim just by linking to the Wikipedia article about predatory pricing. Even the Wikipedia article admits that the devil is in the details, as it were; it's hard to distinguish between anticompetitive pricing and competitive pricing. You're correct that Apple Music may be a loss leader, but even if it is a loss leader, there's significantly more nuance involved before we can declare it to be predatory pricing.
- Spivak 8y ago
  > But since they also get the 30% cut back. That's not how that works. If you charge $50/hr as a freelance software developer and you work on your own stuff for a day you didn't "get $400 back", you paid $400 in opportunity cost.
  - crumpets 8y ago
    That analogy isn’t good because apple doesn’t lose opportunity by charging itself the cut to use the store. There is no indication that apple is limited in how many developers it could take on. If apple had a limited number of apps and they were declining other apps in lieu of its own, that would be true.
- scarface74 8y ago
  So if every company that sells that product at a loss to gain market share is guilty of predatory pricing, that would include almost every VC funded company b
- 8y ago

max76 8y ago

To my understanding this is not illegal, and the ethics are debatable. I don't think Netflix is comparable. The App Store is a market place, where things are bought and sold. Netflix is not a consumer marketplace.

throwawaymath 8y ago
That's a fair point. On the other hand, Microsoft Windows wasn't a marketplace with respect to web browsers.
rlucas 8y ago
Netflix is most definitely a marketplace, more akin to the App Store than I think you're giving it credit for. Netflix shows a wide variety of content to the buyer, the buyer pays and consumes certain (but not all) of the content. The content owners are ultimately paid in a way that reflects the demand for their product relative to the others available in that marketplace. (It's not per-unit pricing with a rev share, but you still get paid more to license big blockbuster content than little-watched niche stuff.) Also similar to App Store, Netflix has certain "blessed" in-house products that it pays to create itself, and lists along side the externally-created products.

dalore 8y ago

Some markets it might be illegal, like in the EU. Netflix isn't comparable as you can choose any other content streaming services. And also you can use any ISP to access to Netflix.

aqme28 8y ago

> Does Apple's favoritism of its own products on its platform mean competing products cannot exist on the platform, or that they're less capable/visible? That is what Spotify is alleging, yes.

mrep 8y ago

Apple is most likely using predatory pricing against Spotify which is illegal [0]. I highly doubt Apple music is profitable at a price point of $10 once the 30% cut is taken into account. But since they also get the 30% cut back, they can subsidize their product while Spotify has to charge $10 at a loss or price it at $14 which is more than Apples price and makes the un-competitive. [0]: https://en.wikipedia.org/wiki/Predatory_pricing https://en.wikipedia.org/wiki/Predatory_pricing

throwawaymath 8y ago
I don't think you've substantiated your first claim just by linking to the Wikipedia article about predatory pricing. Even the Wikipedia article admits that the devil is in the details, as it were; it's hard to distinguish between anticompetitive pricing and competitive pricing. You're correct that Apple Music may be a loss leader, but even if it is a loss leader, there's significantly more nuance involved before we can declare it to be predatory pricing.
Spivak 8y ago
> But since they also get the 30% cut back. That's not how that works. If you charge $50/hr as a freelance software developer and you work on your own stuff for a day you didn't "get $400 back", you paid $400 in opportunity cost.
- crumpets 8y ago
  That analogy isn’t good because apple doesn’t lose opportunity by charging itself the cut to use the store. There is no indication that apple is limited in how many developers it could take on. If apple had a limited number of apps and they were declining other apps in lieu of its own, that would be true.
scarface74 8y ago
So if every company that sells that product at a loss to gain market share is guilty of predatory pricing, that would include almost every VC funded company b
8y ago