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I find the group think here to be incredible, and you all will likely be very disappointed when the legal system winds up supporting Apple. Regulating retailer
by parasubvert 6y ago
I find the group think here to be incredible, and you all will likely be very disappointed when the legal system winds up supporting Apple.
Regulating retailers because you don’t like their cut is price controls, which is completely contrary to a free market, and ultimately undermines the end user experience of having a trusted, secure store. Perhaps Google or Apple’s power is so strong as to warrant regulation - but It must be applied fairly, or else it’s just politically corrupt wielding of power against a successful corporation because a part of the supply chain wants a bigger share of the pie.
Apple’s behavior is not anti-competitive by any historical measure, as the courts will show when Epic loses both their Google and Apple cases.
Antitrust law is always political. Do you really think the Trump or even Biden administrations will punish their most successful company, given the other problems in the economy? Convince them this will lead to more growth and you’ll get your wish. Right now it just seems like grousing.
Edit: I could see Europe doing something more intrusive, as is their tendency. However I still think it would have to be legislative and not legal, the arguments are too weak.
- ardit33 6y agoare you serious? Historically you are on the wrong side of the argument. MSFT lost their case in the 90s, of 'other' but not that much different reasons... to their core they are anti-competitive. Also we have the break up of the original Bell system and several companies were formed out of it. GOOG and APL most likely will lose this one.
- parasubvert 6y agoMicrosoft’s case was about parlaying their monopoly in Windows to the browser space by making Internet Explorer an intrinsic part of Windows. This is completely different from the #1 and #2 smart phone marketshare players charging a 30% cut as the exclusive software reseller to their own platform. The original At&T was allowed to be a monopoly for 80+ years because it was in the public interest. The 1982 breakup was 8 years in the making due to poor management decisions in the 1960s and eroded that trust. Unfortunately the breakup was a failure. The Baby Bells maintained their regional monopolies, grew massively, and got their restrictions removed in the 1996 communications act, and now we have Verizon (2 of the 7 baby bells), AT&T (which is the original monopoly plus 4 of the 7 baby bells) and CenturyLink (the remnants of US West and other independents). The only real competition has come from foreign entrants like T-Mobile. I think you need to take a closer look at the history of antitrust cases. It hasn’t been particularly successful.
- krrrh 6y agoThere is so much misremembering of the Microsoft antitrust case, especially by people who didn’t follow it closely at the time, and you’re very right to remind everyone that the core issue was asking the government to intervene to maintain the viability of $40 closed source browser licenses. MSFT “lost” the case but the remedies amounted to a slap on the wrist. Meanwhile the market in its broadest sense innovated in ways that no court or legislator could have reasonably predicted in the late 90s. Not just innovation in terms of superior technology, but in intellectual property (open source), culture (the web standards movement amongst devs), and organization (W3C getting its act together). Beyond browsers Microsoft’s expected dominance on internet server business ran up against Linux, which like gecko and webkit, won out not because some Kommissar deemed it worthy, but because competitors to Microsoft were incentivized to think way outside of the box. If App Store policies truly are as untenable as half of the people posting in this thread believe them to be, then the desire to solve the problem by bringing the coercive power of the state to redistribute some revenue seems more like a lack of imagination than anything else.
- shi314 6y agoWhat would have happened if Microsoft only allowed Apps to be installed through a store instead of side loading. I don't think you could have gotten open source browsers and open standards especially if it had terms like that of Apple. Microsoft could have made arguments like security risk or against their policy to shut down community projects in early stage.
- microtherion 6y ago> MSFT “lost” the case but the remedies amounted to a slap on the wrist. Meanwhile the market in its broadest sense innovated That is true, but there is the argument that some of this innovation was possible because Microsoft restrained its behavior while the case was pending.
- romanoderoma 6y ago> Microsoft’s case was about parlaying their monopoly in Windows to the browser space by making Internet Explorer an intrinsic part of Windows. Nope, they have been accused and sentenced of abusing their dominant position by forcing OEMs to pre install IE on Windows, before the integration started. The way MS force them was with restrictive licenses that practically threatened OEMs to do what MS ordered or face legal consequences and risk to go out of business. The second accusation was that MS used internals secret API for their product not available to third parties giving MS an unfair advantage. Those API were also shared among few OEMs that helped MS secure its dominant position. > Law professor Eben Moglen noted that the way Microsoft was required to disclose its APIs and protocols was useful only for “interoperating with a Windows Operating System Product” The third of their anticompetitive behavior was to pay some OEMs to not install (or offer to customers) other operating systems on their hardware (including BeOS, for example) "Microsoft's true anticompetitive clout was in the rebates it offered to OEMs preventing other operating systems from getting a foothold in the market." Does it sound similar to what Apple does today?
- hackingthenews 6y agoWhat Apple and Google is doing is in many ways effectively price control and inhibits free market dynamics. For example Apple demand that app developers price their apps in the app store similar to the same service in other stores (website, Google play store, etc), even though they are taking a huge 30% cut. So Spotify can't price their product 30% more expensive in the app store, which makes the app store appear competitive and effectively kills incentives for the app store to reduce their fees, while devaluing products sold through the app store. I do agree with you though about the political side of the matter.
- catgary 6y agoThat’s standard - credit card companies have similar agreements with merchants.
- hackingthenews 6y agoCompletely agree. Unapparent effective price fixing is standard. The modern governments has dropped the ball on trying to understand the modern markets.
- millstone 6y ago> Apple demand that app developers price their apps in the app store similar to the same service in other stores Where did you read that? I don't think that's true; for example YouTube Premium costs more through iOS IAP compared to the website. And Spotify did the same for years too.
- hackingthenews 6y agoHonestly heard it more than once from smaller players. I can see how the bigger players gets away with this based on all the other things they get away with that we know about.
- parasubvert 6y agoThose pricing tactics are standard retail practices when dealing with large chains (“we will not be undersold”). This is why most items have an MSRP: to provide transparency across all retailers. With software it’s of course easy to say that it’s a different product in different platforms. Which is why Apple used legal licensing to make Apps feel more like traditional products. Arguably this makes easier for consumers to compare platforms and make a buying decision based on the underlying platform and not transitory deals on top of it. We can assume that all smartphone platforms are equal for their 3rd party software prices. Competition therefore isn’t on partner discounts or formations of cartels, it’s on the strengths of the underlying platform itself. This does stop a form of competition, but I’m not sure price opacity is a form that has traditionally been viewed as a net positive. Perhaps this leads to a legislative regime similar to US auto sales where dealers/shops and manufacturers must have separate ownership. To me Apple’s policies aren’t directly trying to emulate some aspects of this to avoid having to give up running the store.
- Marsymars 6y ago> I find the group think here to be incredible, and you all will likely be very disappointed when the legal system winds up supporting Apple. You partially addressed it in your edit, but I'm pretty doubtful that the legal systems of every major state support Apple forever. It's really just a matter of time before some country gets the critical mass of popular opinion and legislative support for the idea that app stores should be treated as public goods and require regulation as such. Many locales have regulated interchange fees for payment processors, or have threatened regulation to force voluntary reductions and caps on interchange fees. The legal arguments here are similar - I'd place Visa/Mastercard/Amex on a similar level as Apple/Google app stores in terms of competition.
- parasubvert 6y agoI’m all for people convincing their governments to enact legislation in the public interest. I think there are huge misunderstandings with the current case, however: 1. People are suggesting there is no need for new legislation, that current antitrust law covers Apple’s behavior. I think this is, politely, wishful thinking. 2. People really underestimate the consequences of government intervention in the form of a consent decree or industrial regulations. They can be very good or very bad, and it usually takes many years of tinkering to figure it out. Like: once you regulate the app stores, you’ve effectively enshrined them as a state-sponsored enterprise for a generation or longer. The %cut might get lowered, but now adjusting it is like fighting over taxes, and is wrapped up in all the other ideological problems of the day. 3. People underestimate the unintended consequences of breakups or forced arrangements. Say the stores are forced to be spun out of their parents. How do we know this will lead to a lowered cut%? If you regulate that cut, what does the company get in return? Indentured servitude isn’t generally looked upon with favor. What about mergers and acquisitions, like, could the spun out google and Apple stores eventually merge, creating an actual monopoly? If not, why not, and for how long? Now we are back to enshrining a business as a state-sponsored enterprise. Of course I’m sure that some kind of regulatory arrangement in the public interest could be dreamt up, but let’s remember that the AT&T split took 8 years to sort out into a consent decree. Microsoft’s trial and second consent decree took 3 years - finalized in 2001. If the antitrust law isn’t enough to tackle Apple and Google (and I doubt it is), crafting the legislation alone could take up to 5 years or maybe longer. The US communications act took 60 years to get revisited. Are we so sure there’s not some kind of alternative on the horizon that will disrupt Apple and Google in the next 10 years? The web browser disrupted Microsoft once, maybe some successor with WASM and other goodies will make native apps a moot point? Doesn’t seem that way now but 10 years is a long time. This is the trouble with antitrust law or new industrial regulatory law: unintended consequences, or being too late to be effective. The better way is to promote entrepreneurs to topple this regime. It’ll take 10-15 years either way, but I think the latter approach has the chance of a better overall consumer experience.
- ehsankia 6y agoI personally don't think 30% is particularly high in normal app selling scenarios. The two bigger issues with Apple's system are 1. The complete control over the ecosystem, which is gated and opaque. No alternatives to bypass the App Store. 2. 30% is fine for single app sales, but when you're an app that sells monthly subscriptions or tons of in-game content, it just doesn't scale the same.
- realityking 6y agoThe problem is if the %age cut for iAP was lower than for app purchases, every app would become free with an iAP to unlock. For subscriptions, Apple changed the rules a few years ago to only take a 15% cut of renewals after 12 months.
- fastball 6y agoHow is that a problem? Then Apple could just start charging for actual distribution – i.e. actually charging at the point where they claim to be delivering value, rather than inserting themselves into a transaction where they add nothing. The argument against that is then generally "but what about free apps?", to which I say: unmonetized apps get distributed by Apple for free. Monetized ones pay for distribution + a fee (maybe 30%). So if it costs Apple $300 to deliver your app + updates to X devices every month, they charge you $390.
- realityking 6y agoIn your model, does a free app with in-App Purchases count as monetized or not?
- fastball 6y agoYes. Realistically I think Apple could then charge anyone they want, where if you're under a certain usage or if you're a genuinely free-type app (the Wikipedia app) that don't charge you. The point is at that point it is more about Apple providing freebies in order to enrich their ecosystem than it is about Apple extorting platforms which are valuable mostly without Apple.
- Slartie 6y ago> Convince them this will lead to more growth and you’ll get your wish. There's actually a good case to be made in that favor. Letting Apple strangle thousands of app developers and prevent business cases that would actually find customers from being implemented because of restrictive app store rules does not result in a single additional employment at Apple, but only in a few more billions of revenue at Apple and maybe a few more billions of fantasy market cap. However, doing the opposite would strengthen these thousands of market participants, allow them to implement business cases that aren't feasible with a 30% Apple tax or due to other arbitrary store restrictions, and to do that, lots of people must be employed. High-skilled people with high salaries. If the primary goal is to strengthen your actual, real economy, not pushing the stock market, I would root for the latter approach, not the former.
- fastball 6y agoThe problem is that vertical integration and market penetration has really changed what it means to be anti-competitive in the modern world. Apple has built a vertically-integrated flywheel. Customers do not have choice. Their choices are between iOS and Android, which isn't much choice at all. And if you already have bought into either ecosystem, you have even less choice without resulting in significant cost to you, the consumer.
- parasubvert 6y agoThis is assuming that iOS and Android are “permanent platforms” and should be regulated + enshrined as utilities by a new generation of anticompetitive law. As a former Atari, Commodore, and IBM user, I find this to be an argument that doesn’t understand the history of tech platforms and the dynamics of competition. People really forget that the world existed prior to 2008, and are convinced “this time is different”. It really isn’t. Be careful what you wish for.
- romanoderoma 6y ago> Regulating retailers because you don’t like their cut is price controls That's not the point though The point is that if Apple Store (or Play Store) is the only way to ask for money to users, Apple cannot decide who's in and who's out on their whim, they have to allow anybody and only act post-facto on the apps that misbehaved In real life you are not arrested for attempted homicide because you carry a knife with you 'cause knives can be used to kill people They have two choices: relax the rules of the store or accept other stores that can apply different rules, giving more choice to developers, publishers and users The other point is that Apple cannot control what's inside an app, if the developer wants to promote their own product, website, other ways of buying a subscription, they should be allowed, in the same exact way the manufacturer of the blood pressure monitor I bough on Amazon have put inside the box a 5 euros coupon to buy OTC drugs online on their e-store. Amazon doesn't have a say on that. > I could see Europe doing something more intrusive, as is their tendency. As European I love that Europe protects me as citizen of Europe instead of Apple, which is not even European and evades taxes using tax heavens
- parasubvert 6y agoApple absolutely can decide who is in or out: it’s their platform. Governments with even regulated markets generally don’t force stores to carry certain products. Amazon absolutely has a say of what they carry in their store, and most consumers hate the terrible curation of their marketplaces lately. If what Apple runs is not a product, it’s a utility. I think people underestimate what it means to declare the App Stores a utility: freeing up the App admission rules likely might not be one of the outcomes. > They have two choices: relax the rules of the store or accept other stores that can apply different rules, giving more choice to developers, publishers and users Or they have a third choice: status quo. It is currently a fantasy to think otherwise.
- romanoderoma 6y ago> Apple absolutely can decide who is in or out: it’s their platform. The HW device is not theirs. > Amazon absolutely has a say of what they carry in their store They have no say of what's inside the box. If inside the box there is a sticker that says "buy from our store, it's cheaper" they can't be forced out Maybe Amazon can find other ways of kicking products out, but not that one Apple wrote that rule inside their agreements Which is clearly unfair competition Apple competes directly with publishers on the store, being both entities that make the software that people can buy on the only store available, Amazon does not compete directly, they don't manufacture what they sell, they simply resell. > It is currently a fantasy to think otherwise. again: EU exists and take this matters seriously. China could find itself in a digital war with US and it's the third most important market in the World for Apple. Things can change very quickly > most consumers hate the terrible curation of their marketplaces lately. Considering how many posts I've seen about broken or fake products sold on Amazon, it's quite clear that the real fantasy is thinking that a marketplace where only one decides what's good and what's not doesn't produce a better curated and more secure experience
- cma 6y agoIt's closer to regulating the railroads' predatory excesses, which we did.