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>That's correct. But the law does require them to run the stores in a way that does not violate antitrust laws. Apple is violating antitrust laws by forcing com

>That's correct. But the law does require them to run the stores in a way that does not violate antitrust laws. Apple is violating antitrust laws by forcing companies to use Apple Pay as a condition of using the App Store (i.e., leveraging dominant/monopolistic market position in one market in a non-competitive manner over another market). The reason why everyone has to narrowly define the market to "Apple has monopoly power in the iOS market" is because they don't actually have monopoly power in smartphones and are mad about that fact. Defining markets are a major part of antitrust cases and just because a prosecutor or regulator is willing to do it doesn't mean it will actually work in court.

AsyncAwait 6y ago
Apple does not have a monopoly in the smartphone market, but it does have a dominant position there and a monopoly in the tablet segment where it does the same thing.
- Despegar 6y ago
  "Monopoly power" and "dominance" mean the same thing. One is used in the US, the other in the EU. You're going to have a tough time getting a court to agree that Apple is dominant in smartphones in the EU.
  - Mindwipe 6y ago
    > You're going to have a tough time getting a court to agree that Apple is dominant in smartphones in the EU. No you're not. The definition of dominance in the EU is primarily that you're in a position to materially affect market pricing, which I think is actually pretty easy to demonstrate in Apple's case. Overwhelming market share isn't required, and there are several cases that have found companies to be "dominant" where they had less than 50% market share in the EU. (As a good demonstration of this Google's own competition law settlement on Android apps pre-installation in the EU. Google do not approach anything like having a monopoly market share in the EU either, but they still settled because they were going to lose.)
    - JimDabell 6y ago
      > The definition of dominance in the EU is primarily that you're in a position to materially affect market pricing, which I think is actually pretty easy to demonstrate in Apple's case. Is it? App Store prices have been a race to the bottom for years, yet it's clearly in Apple’s interests to keep the prices high, both to keep their revenue from the service as high as possible and to stimulate the app economy. If they had control over the market pricing, why did the race to the bottom happen and why haven't Apple stopped it? If the argument is that they don't care about the revenue and they actually prefer the prices as low as possible to add value to their hardware devices, then why are Apple charging 30% and not 0%?
      - Mindwipe 6y ago
        I don't really agree that's relevant to be honest. The affect on pricing can be quite wide. For example, the EU will not have an issue finding developers who will say they priced their product 30% higher on all platforms than they otherwise might have because they knew the had to pay the Apple surcharge and Apple do not permit you to charge extra to cover their cut (except then they sometimes arbitrarily do! But that's not what the terms say).
        dwaite 6y ago
        Apple had those clauses (I believe they are referred to as ‘Most Favored Nation’ clauses) but I believe removed them after the US E-Book settlement. They still may be attached to marketing and partnership opportunities I believe, though - you might not be featured in the store if you charge iOS users more than android or web users, just like they will probably not advertise a new movie or album if Amazon is allowed to sell it for a lower price.
  - AsyncAwait 6y ago
    A monopoly means you're pretty much the only viable supplier/provider for a particular segment of the market. A dominant player is someone who isn't an outright monopoly, but nonetheless has a sizable market share and can influence pricing, competition, (i.e. by its patent licensing terms and deals with key component OEMs), the ability to set or influence standards etc.
iav 6y ago
Defining Apple as a monopolist on iOS is like calling Ford a monopolist in selling radios in Ford vehicles. No one thinks it’s a violation for Ford to include their own radio (built by a 3rd party like Bose - same as an app) in a Ford truck, and offer you an expensive upgrade to that radio (say also by Olufsen - also like a better App) if you want it. No one demands that Ford allow a different vendor to sell you a compatible radio through a Ford dealer and for Ford to not take a cut of the purchase price. And if Ford says that installing a third party radio without their authorization voids your warranty or otherwise makes it impossible to do so, it’s generally accepted to be OK. This analogy is at the core of Apple’s defense and it was brought up in previous anti trust cases like AA v. Sabre.
- Denvercoder9 6y ago
  > And if Ford says that installing a third party radio without their authorization voids your warranty or otherwise makes it impossible to do so, it’s generally accepted to be OK. No, not really. In the EU for example, a unauthorized change to one part can legally never void the warranty to an unrelated part.
- mikestew 6y ago
  And if Ford says that installing a third party radio without their authorization voids your warranty or otherwise makes it impossible to do so, it’s generally accepted to be OK. Don't know where you live, but that is not true in the U. S. "It is generally accepted as" against Federal law.
  - Someone 6y ago
    Technically, I think it, unfortunately, is true that companies can say that in the USA and many other countries. Companies can say things they know aren’t true, misleading customers. They even often can make it hard for customers who know their rights to exercise those rights. I think it would be an improvement if such actions were punished harsher and more often.
- vonmoltke 6y ago
  > if Ford says that installing a third party radio without their authorization voids your warranty or otherwise makes it impossible to do so, it’s generally accepted to be OK This has been generally illegal in the US since 1975: https://www.law.cornell.edu/uscode/text/15/2302 https://www.law.cornell.edu/uscode/text/15/2302 (section c)
oillio 6y ago
Apple has control of the iOS App market. It is a pretty large barrier for a customer need to switch platforms to get an app that Apple has denied access. I am not a lawyer, but that sure smells like the potential for monopolistic control.
- snowwrestler 6y ago
  This is like saying 7-11 has a monopoly on what is sold in 7-11 stores. If I want a copy of the King James Bible and 7-11 chooses not to sell that, I have to leave 7-11 and go find another store that does. Yes, that's a barrier I have to go through to get my Bible. Should the government make it 7-11's responsibility to solve that for me?
  - deleted 6y ago
    [deleted]
  - munk-a 6y ago
    I'm not certain how this is considered to be analogous - is the assumption that other retailers would need to forward customers to 7/11 when 7/11 carries a good a client is interested in? As a possibly better analogy... Let's say I run a Flea market and also direct sell some items to customers. I charge independent retailers a fee for setting up a booth in my market space and don't excise that same fee from my own booths. Then I go to open a booth in a local mall to help sell some of my directly vendored items and raise an exception all the way to city hall that the mall attempting to charge me for running a booth in their property is impeding the free flow of commerce and hurting the local economy - while I continue to charge booths in my market space for operating.
    - tanjtanjtanj 6y ago
      > and raise an exception all the way to city hall that the mall attempting to charge me for running a booth in their property is impeding the free flow of commerce and hurting the local economy Except Apple has never made that argument to anyone. They simply added a way to pay for their subscription directly in their app rather than in the Play Store; Something Google allows.
kelnos 6y ago
I too feel a little weird about "iOS app ecosystem" as the definition of a market that matters for anti-trust regulation, but at the same time consider that smartphones are not fungible goods. People generally choose iPhone vs. Android for particular reasons, and then often stay on those platforms because of features that aren't available on the competing platform, or just because they've succumbed to ecosystem lock-in. Switching to the other platform isn't just a matter of swapping out a piece of hardware: it involves installing or finding workalike applications, often manually re-entering data, and sometimes losing access to DRMed purchases. Given that, "iOS App Store" does start feeling like a market that should be regulated as its own entity.
- scarface74 6y ago
  Name one popular app that is not cross platform? How many apps have people paid for on iOS that are not subscription based and work on both platforms? Most money from apps Ecome from in app purchases from whales of pay to win games or subscriptions. How much data would really need to be “manually re-entered”?
  - kelnos 6y ago
    That's fair, but doesn't invalidate all the other reasons why switching from iOS to Android is prohibitively difficult. It's laughable to suggest there's no lock-in at all. And some people just like iOS itself.
heisenbit 6y ago
To what extent is this about Apple and not also about Google who is the other party of the deal? In that case the market is unquestionably the whole smartphone market.

AsyncAwait 6y ago

Apple does not have a monopoly in the smartphone market, but it does have a dominant position there and a monopoly in the tablet segment where it does the same thing.

Despegar 6y ago
"Monopoly power" and "dominance" mean the same thing. One is used in the US, the other in the EU. You're going to have a tough time getting a court to agree that Apple is dominant in smartphones in the EU.
- Mindwipe 6y ago
  > You're going to have a tough time getting a court to agree that Apple is dominant in smartphones in the EU. No you're not. The definition of dominance in the EU is primarily that you're in a position to materially affect market pricing, which I think is actually pretty easy to demonstrate in Apple's case. Overwhelming market share isn't required, and there are several cases that have found companies to be "dominant" where they had less than 50% market share in the EU. (As a good demonstration of this Google's own competition law settlement on Android apps pre-installation in the EU. Google do not approach anything like having a monopoly market share in the EU either, but they still settled because they were going to lose.)
  - JimDabell 6y ago
    > The definition of dominance in the EU is primarily that you're in a position to materially affect market pricing, which I think is actually pretty easy to demonstrate in Apple's case. Is it? App Store prices have been a race to the bottom for years, yet it's clearly in Apple’s interests to keep the prices high, both to keep their revenue from the service as high as possible and to stimulate the app economy. If they had control over the market pricing, why did the race to the bottom happen and why haven't Apple stopped it? If the argument is that they don't care about the revenue and they actually prefer the prices as low as possible to add value to their hardware devices, then why are Apple charging 30% and not 0%?
    - Mindwipe 6y ago
      I don't really agree that's relevant to be honest. The affect on pricing can be quite wide. For example, the EU will not have an issue finding developers who will say they priced their product 30% higher on all platforms than they otherwise might have because they knew the had to pay the Apple surcharge and Apple do not permit you to charge extra to cover their cut (except then they sometimes arbitrarily do! But that's not what the terms say).
      - dwaite 6y ago
        Apple had those clauses (I believe they are referred to as ‘Most Favored Nation’ clauses) but I believe removed them after the US E-Book settlement. They still may be attached to marketing and partnership opportunities I believe, though - you might not be featured in the store if you charge iOS users more than android or web users, just like they will probably not advertise a new movie or album if Amazon is allowed to sell it for a lower price.
- AsyncAwait 6y ago
  A monopoly means you're pretty much the only viable supplier/provider for a particular segment of the market. A dominant player is someone who isn't an outright monopoly, but nonetheless has a sizable market share and can influence pricing, competition, (i.e. by its patent licensing terms and deals with key component OEMs), the ability to set or influence standards etc.

iav 6y ago

Defining Apple as a monopolist on iOS is like calling Ford a monopolist in selling radios in Ford vehicles. No one thinks it’s a violation for Ford to include their own radio (built by a 3rd party like Bose - same as an app) in a Ford truck, and offer you an expensive upgrade to that radio (say also by Olufsen - also like a better App) if you want it. No one demands that Ford allow a different vendor to sell you a compatible radio through a Ford dealer and for Ford to not take a cut of the purchase price. And if Ford says that installing a third party radio without their authorization voids your warranty or otherwise makes it impossible to do so, it’s generally accepted to be OK. This analogy is at the core of Apple’s defense and it was brought up in previous anti trust cases like AA v. Sabre.

Denvercoder9 6y ago
> And if Ford says that installing a third party radio without their authorization voids your warranty or otherwise makes it impossible to do so, it’s generally accepted to be OK. No, not really. In the EU for example, a unauthorized change to one part can legally never void the warranty to an unrelated part.
mikestew 6y ago
And if Ford says that installing a third party radio without their authorization voids your warranty or otherwise makes it impossible to do so, it’s generally accepted to be OK. Don't know where you live, but that is not true in the U. S. "It is generally accepted as" against Federal law.
- Someone 6y ago
  Technically, I think it, unfortunately, is true that companies can say that in the USA and many other countries. Companies can say things they know aren’t true, misleading customers. They even often can make it hard for customers who know their rights to exercise those rights. I think it would be an improvement if such actions were punished harsher and more often.
vonmoltke 6y ago
> if Ford says that installing a third party radio without their authorization voids your warranty or otherwise makes it impossible to do so, it’s generally accepted to be OK This has been generally illegal in the US since 1975: https://www.law.cornell.edu/uscode/text/15/2302 https://www.law.cornell.edu/uscode/text/15/2302 (section c)

oillio 6y ago

Apple has control of the iOS App market. It is a pretty large barrier for a customer need to switch platforms to get an app that Apple has denied access. I am not a lawyer, but that sure smells like the potential for monopolistic control.

snowwrestler 6y ago
This is like saying 7-11 has a monopoly on what is sold in 7-11 stores. If I want a copy of the King James Bible and 7-11 chooses not to sell that, I have to leave 7-11 and go find another store that does. Yes, that's a barrier I have to go through to get my Bible. Should the government make it 7-11's responsibility to solve that for me?
- deleted 6y ago
  [deleted]
- munk-a 6y ago
  I'm not certain how this is considered to be analogous - is the assumption that other retailers would need to forward customers to 7/11 when 7/11 carries a good a client is interested in? As a possibly better analogy... Let's say I run a Flea market and also direct sell some items to customers. I charge independent retailers a fee for setting up a booth in my market space and don't excise that same fee from my own booths. Then I go to open a booth in a local mall to help sell some of my directly vendored items and raise an exception all the way to city hall that the mall attempting to charge me for running a booth in their property is impeding the free flow of commerce and hurting the local economy - while I continue to charge booths in my market space for operating.
  - tanjtanjtanj 6y ago
    > and raise an exception all the way to city hall that the mall attempting to charge me for running a booth in their property is impeding the free flow of commerce and hurting the local economy Except Apple has never made that argument to anyone. They simply added a way to pay for their subscription directly in their app rather than in the Play Store; Something Google allows.

kelnos 6y ago

I too feel a little weird about "iOS app ecosystem" as the definition of a market that matters for anti-trust regulation, but at the same time consider that smartphones are not fungible goods. People generally choose iPhone vs. Android for particular reasons, and then often stay on those platforms because of features that aren't available on the competing platform, or just because they've succumbed to ecosystem lock-in. Switching to the other platform isn't just a matter of swapping out a piece of hardware: it involves installing or finding workalike applications, often manually re-entering data, and sometimes losing access to DRMed purchases. Given that, "iOS App Store" does start feeling like a market that should be regulated as its own entity.

scarface74 6y ago
Name one popular app that is not cross platform? How many apps have people paid for on iOS that are not subscription based and work on both platforms? Most money from apps Ecome from in app purchases from whales of pay to win games or subscriptions. How much data would really need to be “manually re-entered”?
- kelnos 6y ago
  That's fair, but doesn't invalidate all the other reasons why switching from iOS to Android is prohibitively difficult. It's laughable to suggest there's no lock-in at all. And some people just like iOS itself.

heisenbit 6y ago

To what extent is this about Apple and not also about Google who is the other party of the deal? In that case the market is unquestionably the whole smartphone market.