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Market share in this case is only one piece of the puzzle. Even if they make up 22% of market share (globally, it's 60% in the US), iOS usually makes it up in n

Market share in this case is only one piece of the puzzle. Even if they make up 22% of market share (globally, it's 60% in the US), iOS usually makes it up in number of paying users.

dangus 6y ago
The fact that iOS users are willing to pay seems irrelevant to me. It’s almost like calling Tesla a monopoly power in the automotive industry because they have >90% of the luxury EV market: you’ve already sub-divided the market so many times that the idea is weakened. In reality, most people use Android, and even in the US about half of them still use Android. If iOS is a monopoly then so is Sony, Microsoft, and Nintendo. The dynamics of that market are quite similar. Microsoft had well over a 95% marketshare during their antitrust saga.
- tsimionescu 6y ago
  The thing is, rather than absolute market share, the way you use your position is more important. If you have a powerful market position but just compete normally, you're usually ok. If you have a powerful market position and use it to corner other markets or stifle competition in other ways, you start having problems.
  - scarface74 6y ago
    So what is “competing normally”?
    - tsimionescu 6y ago
      Lowering prices or adding value, advertising. Doing stuff like blocking competitors from your platform, blacklisting people who do business with your competition would be examples of not competing normally. What Apple is doing is more subtle though - in general they are not using their position against Google, they are using it to force arbitrary conditions on companies seeking to do business on iOS and increase their own profits, to the detriment of end users. I believe the ultimate test for market abuse in the US is considered something like business practices that harm other companies without benefit to the end user. If the end user gets lower prices or better value Thanks to your practices, the free market is achieving its purpose. If they are not, but one company is getting better profits, than the market is being manipulated. As a side note, this is not the same test as in the EU for example, which makes price dumping (selling below cost of production) usually ok in the US, but not in the EU.
      - scarface74 6y ago
        And once again HN lawyers don’t understand the law. The US unlike Europe has to show consumer harm. Not harm to other businesses. This has been the school of thought since Bork. Apple hasn’t blocked competitors. For every service that Apple charges money for, there is a competitor. Every platform owner and reseller forces conditions on third parties - console makers, set top box sellers, physical retail stores, etc. If what you said was any kind of reality, Apple or any other company could be accused of being a “monopoly” if they had any type of margins. Saying Apple is a monopoly because users choose to spend more is about like saying Nike is a monopoly when other shoes are cheaper. It is not anti competitive to have a differentiator where users choose to spend more on your product than competitors.
- strbean 6y ago
  Consoles are a pretty terrible counter-example. An entire industry driven by "exclusive titles" is incredibly anti-consumer.
  - scarface74 6y ago
    Are you saying that developers should be forced to support all of the platforms?
    - MelliaTran 6y ago
      https://pages.shopbase.com/shopbase-vs-shopify?utm_source=seo&utm_medium=shopifyalternative https://pages.shopbase.com/shopbase-vs-shopify?utm_source=se...
    - strbean 6y ago
      I'm saying in a competitive market, the incentive would be to support as many platforms as you reasonably can. Without being outright paid by platform creators not to do that, most developers choose to do that. Paying third parties not to support your competition is... I'll let the reader fill in the blank :)
      - scarface74 6y ago
        So instead of paying third parties they could just outright acquire them - like MS did with Bungie? At least independent game makers have the option of creating some games that are cross platform. On the other hand, if the game maker needs funding and the platform owner is willing to fund them, shouldn’t the platform owner get something? Another example, Apple funding independent game makers for Apple Arcade means that games can come to iOS that don’t depend on loot boxes, selling consumables or ads. That also means Apple takes on the risk.
- moooo99 6y ago
  > The fact that iOS users are willing to pay seems irrelevant to me. The main point is not that Apple is a monopoly on the smartphone market, the issue is the monopoly Apple has on distributing apps for the iOS platform. When building an app access to all users is key to success. Apple artificially limits access to the users of their platform by having you jump through a dozen of hoops and an intransparent review process. Although iOS only has a market share of around 20% (globally? more in the US), the iOS platform has a large enough audience and market size to be very relevant for investigations. > It’s almost like calling Tesla a monopoly power in the automotive industry because they have >90% of the luxury EV market It's really not. I can't think of a general comparison off the top of my head, but lets use Spotify and the Apple dispute as an example. To keep the Tesla example, the situation would be more comparable if, let's say Volkswagen, would have to sell their EVs through Tesla for the north american market.
  - nodamage 6y ago
    > The main point is not that Apple is a monopoly on the smartphone market, the issue is the monopoly Apple has on distributing apps for the iOS platform. The question of whether the iOS app distribution market is, in fact, separate and valid antitrust market is not something that can simply be assumed. This is known as a "wholly derivative aftermarket" (as the market for iOS apps would not exist independently of the market for iPhones), and US courts generally disallow antitrust aftermarkets to be defined in the context of a single brand's product unless specific criteria are met. [1] One of the key criteria is whether or not the consumer knowingly and voluntarily agreed to the aftermarket restriction when they made their initial purchase. If they knew about the aftermarket restriction and could have bought an alternate product without such restrictions, but went ahead and bought the restricted product anyway, then the market power deriving from that restriction is not considered a valid basis for an antitrust claim. In other words, if when consumers bought an iPhone, they knew they would be limited to installing apps from the App Store, and they went ahead and bought the iPhone anyway, it is rather unlikely that a US court would consider the "monopoly Apple has on distributing apps for the iOS platform" to be a valid antitrust market. [1] The criteria are explained in Newcal Industries, Inc. v. IKON Office Solution (https://casetext.com/case/newcal-industries-v-ikon-office-solution https://casetext.com/case/newcal-industries-v-ikon-office-so...). Most of the cases where single-brand aftermarkets were permitted by the court involve situations where the consumer did not know about the restriction at the time of purchase, because the company changed a policy or modified existing agreements after the purchase.
- AnthonyMouse 6y ago
  > It’s almost like calling Tesla a monopoly power in the automotive industry because they have >90% of the luxury EV market: you’ve already sub-divided the market so many times that the idea is weakened. The thing to notice about this is that you're talking about the wrong market. Suppose I want to use an unnecessarily specific product, like the 2015 Ford Focus SE Flex Fuel with 5-Speed manual transmission, and talk about the market for fuel for that vehicle. Well actually it can take regular 87 octane gasoline, which you can get at any gas station anywhere, so nobody has a monopoly on fuel for that vehicle, no matter how specific we get about the vehicle. It's totally irrelevant whether it has power windows or cruise control because they don't affect what kind of fuel you can put in it. We can specify any of those things and it doesn't help anybody to show a fuel monopoly unless the thing being specified is relevant, which most of those kind of details aren't. Now we want to talk about apps and phones. If you have a "phone" -- the broad product definition you want to use -- then do you have competition for app stores? Now you've got a problem. You can't actually answer the question, because the answer actually does depend on what kind of phone you have. The details are relevant. That's how you know "phones" is too broad of a product definition -- it doesn't actually allow you to answer the question about app stores without being more specific about what kind of phone it is, because different phones use different app stores. When we're talking about app stores, the relevant market is the set of customers that can use the same set of app stores as one another. And then you know it's a monopoly if the set has only one entry. > If iOS is a monopoly then so is Sony, Microsoft, and Nintendo. The dynamics of that market are quite similar. The strongest argument that this isn't the case is that it's common for people to buy multiple different consoles at once, so if the customer can't get a game on one console, they could still get the same game on another one because they actually own multiple consoles at the same time. I'm not sure if I actually buy this, because a lot of people don't actually own multiple consoles, and to that extent they do have a monopoly. But for sure hardly anybody carries multiple brands of phone in their pocket.
  - danudey 6y ago
    > Now we want to talk about apps and phones. If you have a "phone" -- the broad product definition you want to use -- then do you have competition for app stores? Apple's argument, which I tend to agree with, is that the user does have a choice of app store, which they make by buying an iPhone instead of an Android phone (or a Xiaomi phone, or a Kindle, or whatever). The reason I agree with this is that, for me, the App Store and how it's handled is one of the big draws of the iPhone; I've heard a lot fewer stories about malicious software, re-uploaded software with malware installed, software that walks you through the process of enabling sideloading or enabling adb connections so that you can install this one thing one time, all of which users might have to deal with without necessarily understanding the repercussions of what they're doing. So once you've purchased an iPhone you don't have a choice of App Store, but you do make that choice, arguably, when you purchase your phone. The biggest argument against this is that if you've already invested a lot into apps on the App Store, then there's not a lot of option to switch app stores, but there is still a choice that users can make. > The strongest argument that this isn't the case is that it's common for people to buy multiple different consoles at once, so if the customer can't get a game on one console, they could still get the same game on another one because they actually own multiple consoles at the same time. I'm not sure this is actually the case for most people. I don't think the typical person is going to spend, for example, $600 on a Playstation 5, and then decide that they don't like how Sony handles their store so they go and buy an XBox Series X for another $600 so that they can get the best of both worlds, or get access to a different store with different policies.
- Dahoon 6y ago
  >If iOS is a monopoly then so is Sony, Microsoft, and Nintendo I see this excuse all the time. So what if X, Y and Z are a monopoly? The problem isn't monopolies. You are stuck on a word that makes no difference. It is abusing your market position that is the problem. That is what got Microsoft punished and it is what Apple is doing now.
valuearb 6y ago
The App Store pays developers 50% more than the Google Play Store, despite Androids 6-1 lead in device sales. Apparently the walled garden is hugely attractive to the best customers.

Market share in this case is only one piece of the puzzle. Even if they make up 22% of market share (globally, it's 60% in the US), iOS usually makes it up in number of paying users.

dangus 6y ago

The fact that iOS users are willing to pay seems irrelevant to me. It’s almost like calling Tesla a monopoly power in the automotive industry because they have >90% of the luxury EV market: you’ve already sub-divided the market so many times that the idea is weakened. In reality, most people use Android, and even in the US about half of them still use Android. If iOS is a monopoly then so is Sony, Microsoft, and Nintendo. The dynamics of that market are quite similar. Microsoft had well over a 95% marketshare during their antitrust saga.

tsimionescu 6y ago
The thing is, rather than absolute market share, the way you use your position is more important. If you have a powerful market position but just compete normally, you're usually ok. If you have a powerful market position and use it to corner other markets or stifle competition in other ways, you start having problems.
- scarface74 6y ago
  So what is “competing normally”?
  - tsimionescu 6y ago
    Lowering prices or adding value, advertising. Doing stuff like blocking competitors from your platform, blacklisting people who do business with your competition would be examples of not competing normally. What Apple is doing is more subtle though - in general they are not using their position against Google, they are using it to force arbitrary conditions on companies seeking to do business on iOS and increase their own profits, to the detriment of end users. I believe the ultimate test for market abuse in the US is considered something like business practices that harm other companies without benefit to the end user. If the end user gets lower prices or better value Thanks to your practices, the free market is achieving its purpose. If they are not, but one company is getting better profits, than the market is being manipulated. As a side note, this is not the same test as in the EU for example, which makes price dumping (selling below cost of production) usually ok in the US, but not in the EU.
    - scarface74 6y ago
      And once again HN lawyers don’t understand the law. The US unlike Europe has to show consumer harm. Not harm to other businesses. This has been the school of thought since Bork. Apple hasn’t blocked competitors. For every service that Apple charges money for, there is a competitor. Every platform owner and reseller forces conditions on third parties - console makers, set top box sellers, physical retail stores, etc. If what you said was any kind of reality, Apple or any other company could be accused of being a “monopoly” if they had any type of margins. Saying Apple is a monopoly because users choose to spend more is about like saying Nike is a monopoly when other shoes are cheaper. It is not anti competitive to have a differentiator where users choose to spend more on your product than competitors.
strbean 6y ago
Consoles are a pretty terrible counter-example. An entire industry driven by "exclusive titles" is incredibly anti-consumer.
- scarface74 6y ago
  Are you saying that developers should be forced to support all of the platforms?
  - MelliaTran 6y ago
    https://pages.shopbase.com/shopbase-vs-shopify?utm_source=seo&utm_medium=shopifyalternative https://pages.shopbase.com/shopbase-vs-shopify?utm_source=se...
  - strbean 6y ago
    I'm saying in a competitive market, the incentive would be to support as many platforms as you reasonably can. Without being outright paid by platform creators not to do that, most developers choose to do that. Paying third parties not to support your competition is... I'll let the reader fill in the blank :)
    - scarface74 6y ago
      So instead of paying third parties they could just outright acquire them - like MS did with Bungie? At least independent game makers have the option of creating some games that are cross platform. On the other hand, if the game maker needs funding and the platform owner is willing to fund them, shouldn’t the platform owner get something? Another example, Apple funding independent game makers for Apple Arcade means that games can come to iOS that don’t depend on loot boxes, selling consumables or ads. That also means Apple takes on the risk.
moooo99 6y ago
> The fact that iOS users are willing to pay seems irrelevant to me. The main point is not that Apple is a monopoly on the smartphone market, the issue is the monopoly Apple has on distributing apps for the iOS platform. When building an app access to all users is key to success. Apple artificially limits access to the users of their platform by having you jump through a dozen of hoops and an intransparent review process. Although iOS only has a market share of around 20% (globally? more in the US), the iOS platform has a large enough audience and market size to be very relevant for investigations. > It’s almost like calling Tesla a monopoly power in the automotive industry because they have >90% of the luxury EV market It's really not. I can't think of a general comparison off the top of my head, but lets use Spotify and the Apple dispute as an example. To keep the Tesla example, the situation would be more comparable if, let's say Volkswagen, would have to sell their EVs through Tesla for the north american market.
- nodamage 6y ago
  > The main point is not that Apple is a monopoly on the smartphone market, the issue is the monopoly Apple has on distributing apps for the iOS platform. The question of whether the iOS app distribution market is, in fact, separate and valid antitrust market is not something that can simply be assumed. This is known as a "wholly derivative aftermarket" (as the market for iOS apps would not exist independently of the market for iPhones), and US courts generally disallow antitrust aftermarkets to be defined in the context of a single brand's product unless specific criteria are met. [1] One of the key criteria is whether or not the consumer knowingly and voluntarily agreed to the aftermarket restriction when they made their initial purchase. If they knew about the aftermarket restriction and could have bought an alternate product without such restrictions, but went ahead and bought the restricted product anyway, then the market power deriving from that restriction is not considered a valid basis for an antitrust claim. In other words, if when consumers bought an iPhone, they knew they would be limited to installing apps from the App Store, and they went ahead and bought the iPhone anyway, it is rather unlikely that a US court would consider the "monopoly Apple has on distributing apps for the iOS platform" to be a valid antitrust market. [1] The criteria are explained in Newcal Industries, Inc. v. IKON Office Solution (https://casetext.com/case/newcal-industries-v-ikon-office-solution https://casetext.com/case/newcal-industries-v-ikon-office-so...). Most of the cases where single-brand aftermarkets were permitted by the court involve situations where the consumer did not know about the restriction at the time of purchase, because the company changed a policy or modified existing agreements after the purchase.
AnthonyMouse 6y ago
> It’s almost like calling Tesla a monopoly power in the automotive industry because they have >90% of the luxury EV market: you’ve already sub-divided the market so many times that the idea is weakened. The thing to notice about this is that you're talking about the wrong market. Suppose I want to use an unnecessarily specific product, like the 2015 Ford Focus SE Flex Fuel with 5-Speed manual transmission, and talk about the market for fuel for that vehicle. Well actually it can take regular 87 octane gasoline, which you can get at any gas station anywhere, so nobody has a monopoly on fuel for that vehicle, no matter how specific we get about the vehicle. It's totally irrelevant whether it has power windows or cruise control because they don't affect what kind of fuel you can put in it. We can specify any of those things and it doesn't help anybody to show a fuel monopoly unless the thing being specified is relevant, which most of those kind of details aren't. Now we want to talk about apps and phones. If you have a "phone" -- the broad product definition you want to use -- then do you have competition for app stores? Now you've got a problem. You can't actually answer the question, because the answer actually does depend on what kind of phone you have. The details are relevant. That's how you know "phones" is too broad of a product definition -- it doesn't actually allow you to answer the question about app stores without being more specific about what kind of phone it is, because different phones use different app stores. When we're talking about app stores, the relevant market is the set of customers that can use the same set of app stores as one another. And then you know it's a monopoly if the set has only one entry. > If iOS is a monopoly then so is Sony, Microsoft, and Nintendo. The dynamics of that market are quite similar. The strongest argument that this isn't the case is that it's common for people to buy multiple different consoles at once, so if the customer can't get a game on one console, they could still get the same game on another one because they actually own multiple consoles at the same time. I'm not sure if I actually buy this, because a lot of people don't actually own multiple consoles, and to that extent they do have a monopoly. But for sure hardly anybody carries multiple brands of phone in their pocket.
- danudey 6y ago
  > Now we want to talk about apps and phones. If you have a "phone" -- the broad product definition you want to use -- then do you have competition for app stores? Apple's argument, which I tend to agree with, is that the user does have a choice of app store, which they make by buying an iPhone instead of an Android phone (or a Xiaomi phone, or a Kindle, or whatever). The reason I agree with this is that, for me, the App Store and how it's handled is one of the big draws of the iPhone; I've heard a lot fewer stories about malicious software, re-uploaded software with malware installed, software that walks you through the process of enabling sideloading or enabling adb connections so that you can install this one thing one time, all of which users might have to deal with without necessarily understanding the repercussions of what they're doing. So once you've purchased an iPhone you don't have a choice of App Store, but you do make that choice, arguably, when you purchase your phone. The biggest argument against this is that if you've already invested a lot into apps on the App Store, then there's not a lot of option to switch app stores, but there is still a choice that users can make. > The strongest argument that this isn't the case is that it's common for people to buy multiple different consoles at once, so if the customer can't get a game on one console, they could still get the same game on another one because they actually own multiple consoles at the same time. I'm not sure this is actually the case for most people. I don't think the typical person is going to spend, for example, $600 on a Playstation 5, and then decide that they don't like how Sony handles their store so they go and buy an XBox Series X for another $600 so that they can get the best of both worlds, or get access to a different store with different policies.
Dahoon 6y ago
>If iOS is a monopoly then so is Sony, Microsoft, and Nintendo I see this excuse all the time. So what if X, Y and Z are a monopoly? The problem isn't monopolies. You are stuck on a word that makes no difference. It is abusing your market position that is the problem. That is what got Microsoft punished and it is what Apple is doing now.

valuearb 6y ago

The App Store pays developers 50% more than the Google Play Store, despite Androids 6-1 lead in device sales. Apparently the walled garden is hugely attractive to the best customers.