10 ms·

Scale and market power are what makes a monopolist, by definition. It doesn't matter if the terms have changed; what has changed since 2008 is the scale and pow

• flohofwoe 6y ago
  Apparently the 30% cut has it's origins in a deal between Nintendo and Hudsonsoft. 10% licensing fee, and 20% manufacturing costs for physical cartridges. https://www.msn.com/en-us/news/technology/the-30percent-fee-epic-is-fighting-apple-over-began-with-nintendo/ar-BB18lkPz https://www.msn.com/en-us/news/technology/the-30percent-fee-...
  • sova 6y ago
    If Steam, Apple, Google, any of them made a physical cartridge of a developer's games for them, that would seem a lot more reasonable a fee.
    • wil421 6y ago
      What about what the virtual platform Apple provides? The cartridge is the feature rich phone and virtual services Apple provides to get to the device.
      • spacemanmatt 6y ago
        For which a customer spends hundreds of dollars, comparable to purchasing a game console that took cartridges. Apple doesn't provide that, buyers provide that. Apple is trying use their leverage to dominate every angle of the action. Surprise, surprise, surpriiiiise.
        • ac29 6y ago
          And millions of developers pay $99/year, which likely more than covers Apple's costs of providing developer tooling, documentation, etc.
          • jpttsn 6y ago
            I wouldn’t be so sure. How many man hours go into developing ARKit, Foundation, Swift etc.? How many developer accounts would be required to fund all of that plus the R&D for the ideas that didn’t work out? I think the $99 is more of a filter, like a captcha, for developers that mean business.
      • username90 6y ago
        The user paid for those when they bought the phone.
      • 52-6F-62 6y ago
        Probably a more accurate analog to the cartridge would be the storage and distribution services. That takes some infrastructure in networking and storage.
        • sova 6y ago
          Developers still have to store application specific data on their own!
          • ratww 6y ago
            Apple actually gives developers 1PB of free storage per app with CloudKit, and it even has some nice privacy features for users. Of course it has limitations, so most developers prefer rolling their own backend.
          • 52-6F-62 6y ago
            How's that? I choose apps that store my data locally rather than their servers if I even do download apps. I was discussing the storage and distribution infrastructure.
            • sova 6y ago
              Consider a game that holds a leaderboard on steam, or any app that stores user progress on its servers. Not exactly pertinent to your comment but pertinent to the conversation as a whole: If Apple/Google/Steam stored all app data for developers and also did the marketing for developers, that is closer to what 30% is worth imho. For hosting the platform, yes your grandfather was the first to stab a flag into the digital real-estate, and for that I owe you 30%? Feudalism that manages to shift cost to both consumer and developer at the same time -- impressive, but not very noble.
              • 52-6F-62 6y ago
                That's not a good analogue for a cartridge, though. The cartridge or the device itself stored data locally. Modern gaming consoles store their data on HDD's. Anything beyond that is entirely developer's prerogative. And according to another user, they do offer storage through CloudKit... which it appears they do, included in the dev account/App Store distribution model—1 PB: https://developer.apple.com/icloud/cloudkit/ https://developer.apple.com/icloud/cloudkit/
    • awinder 6y ago
      This is a super literal take. In the 80s/90s the expense-incurring activity was physical cartridge production. Today it’s bandwidth & delivery infrastructure, card processing, any myriad of things.
      • matthewdgreen 6y ago
        Yes, but it's hard to imagine that 30 years of technological progress has not changed the underlying cost structures of these businesses. After all, it's changed the cost structure of almost every other business that has some connection to computing and data delivery by orders of magnitude. Yet, strangely the 30% cut has not changed a bit.
        • c22 6y ago
          NES carts used to cost like fifty bucks. Aren't most apps in the few-dollars range?
          • matthewdgreen 6y ago
            Nintendo console games still cost $50, and seem to outsell $1-$5 games despite the fact that the vast majority of users already own a phone, and consoles cost extra (and there are more than two platforms to choose from.) So I'm going to go out on a limb and suggest that the market does not consider these to be equivalent products.
            • awinder 6y ago
              The still costs $50 is interesting to me, because inflation adjusted this is a pretty steep discount. The 30% stayed the same, but inflation adjusted on something like this the revenue netted is down to what 15% would have previously got you. All I’m really getting at is that the layers of complication are thick. I feel like one could unwind this with a lot of effort, but I doubt anyone is being utterly fleeced (or is utterly innocent, for that matter).
      • ardy42 6y ago
  • _qulr 6y ago
    The is the wrong history though. It only matters if you accept the App Store == console analogy, which I don't. Historically speaking, App Store was not based on game consoles, it was based on the iTunes Music Store. Everything about the App Store design was exactly the same as the iTunes Music Store, right down to being in iTunes itself. App developers even uploaded their apps to iTunes Connect (which has only very recently been renamed to App Store Connect).
    • goldenManatee 6y ago
      That’s a little like saying since the facts of how the people at Apple arrived at the original 30% disagree with your philosophical views on this matter, it seizes to be relevant. A personalized reality, with personalized facts. Alleged fact, much as it may not make sense to some in hindsight, is they used the Nintendo-Hudson Soft price model and it doesn’t change how they decided that because of anyone’s preferences. It’s totally different than to accept, it’s been this way - for too long - it’s time to change for a more equitable price model. But then that’s the crux about bringing this suit to court in a country whose judicial system is based on precedents.
  • searchableguy 6y ago
    > Rogers has adjudicated various cases against Apple. In 2012, Rogers dismissed a class action lawsuit with prejudice, upholding Apple's defense that the "Illinois Brick doctrine" from the Supreme Court case Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977) applied, as only the developers of apps could be damaged by Apple's policies, and consumers did not have statutory standing to bring suit on the developers' behalf. The Court specifically noted that the 30% fee Apple collects is "a cost passed-on to consumers by independent software developers".[8] The United States Court of Appeals for the Ninth Circuit reversed her decision, and the Court of Appeals was upheld by the Supreme Court in Apple Inc. v. Pepper.[9] > In December 2014, Rogers presided over a jury trial against Apple, in which plaintiffs claimed DRM on Apple iTunes violated antitrust laws. On December 16, 2014, the jury reached a verdict in favor of Apple.[10] Source: https://en.m.wikipedia.org/wiki/Yvonne_Gonzalez_Rogers https://en.m.wikipedia.org/wiki/Yvonne_Gonzalez_Rogers
    • ac29 6y ago
      > The Court specifically noted that the 30% fee Apple collects is "a cost passed-on to consumers by independent software developers". This is a somewhat shocking conclusion to come to since the independent developers neither set the fee, nor process the payments. I can see why it was overturned.
  • romanoderoma 6y ago
    At the same price of a cartridge today they could give you the app + a basic smartphone
• charliemil4 6y ago
  How do you weigh the value of Apple's APIs? As in, to continue with the game console analogy, you must have at least one license to a powerful engine (like Unreal Engine with a 5% fee) to develop efficiently. Do you actually save 5% (assuming PS is 30%) by developing for the Apple ecosystem? (Assuming Metal is comparable to Unreal)
  • dhagz 6y ago
    > Do you actually save 5% (assuming PS is 30%) by developing for the Apple ecosystem? Probably not - assuming you're being smart and targeting multiple platforms, you're still going to be using Unreal/Unity. And even if you're only targeting the Mac, Unreal/Unity bring a lot more than rendering to the table, so you're probably still using either of them, all with a commercial license. And unless you're doing distribution yourself, anywhere you put your game will take a percentage, pretty much all around 30%. Some places like itch.io let you define how much they take, but no one really uses itch.io for anything bigger than an indie game.
    • pjmlp 6y ago
      > And even if you're only targeting the Mac, Unreal/Unity bring a lot more than rendering to the table, so you're probably still using either of them, all with a commercial license. Depends, plenty of indies are doing alright with Apple's own gaming frameworks.
      • dhagz 6y ago
        Very true. Comes down to if you already know (or want to learn) Swift.
• shadowgovt 6y ago
  > Scale and market power are what makes a monopolist, by definition. Very true. Worth noting here also is that (US) antitrust law isn't designed to break up 100% of all monopolies.
  • ethbr0 6y ago
    US antitrust law isn't designed to break up platform monopolies, period. Which is unfortunate, because the kind of all-owning combinations it's designed around aren't really possible in tech, post-Internet. Microsoft of the 90s was much-lamented, but in reality they extracted far less value than they could have. They could have easily asked for 30% of all revenue of all Windows software, and developers would have had to pay it. I'm hesitant to advocate breaking up of platform monopolies or duopolies, but a lesser-version of antitrust law would substantially benefit consumers in both app stores and ISPs. In both cases, the monopoly stems from monopolized access to the end customer, which is what would be beneficial to attack. IMHO, a sliding scale of mandates for increasingly-open third party access based on market share (broken down into each user market!) would be appropriate. If you want 90% market share, go for it. But you'd better believe you're going to have to provide (1) customer access to third parties & (2) any work required to enable them, at cost.
• notsuoh 6y ago
  To ask you the same question, restated, that the judge asked Epic, which they had no answer for: if Apple wasn't a monopoly before, but they're a monopoly now, when did they become a monopoly?
  • jclardy 6y ago
    While it is an interesting question, what does it matter? When did standard oil become a monopoly? Is there some specific date where they changed from competitive to anti-competitive? More likely they grew over time and the ability for competition to exist was diminished over the entire period.
    • wil421 6y ago
      Apple doesn’t even have 60% market share in the US. Android has 86% worldwide. They are no where near a monopoly like Standard Oil or Bell.
      • _qulr 6y ago
        > Apple doesn’t even have 60% market share in the US. They have over 50% market share though. They're by far the largest smartphone manufacturer in the US. And they also get the vast majority of app developer revenue, much more than the Google Play Store. > Android has 86% worldwide. Worldwide market share is not necessarily relevant to US law. > They are no where near a monopoly like Standard Oil or Bell. This isn't actually required by antitrust law.
        • Jtsummers 6y ago
          Worldwide share could be made to matter during the trial (assuming it reaches that point). It demonstrates that Apple's position in the US is a consequence of consumer choice, as they do have real competition. It's just that their competitors have (for various reasons) failed to take (or in this case failed to hold) a larger share of the US market. https://www.statista.com/statistics/266572/market-share-held-by-smartphone-platforms-in-the-united-states/ https://www.statista.com/statistics/266572/market-share-held... Shows the marketshare of mobile OSes by year from 2012-2019. It's worth noting that Apple's > 50% market share is a recent (2019) phenomenon. It's not like they've held that position for the entire decade, and it's not at all clear that they got that position by any illegal or unethical methods [0]. So consumers have made a clear and (somewhat) informed decision by electing to by iPhones. [0] I'm sure someone will talk about green bubble/blue bubble, but seriously people: stop using SMS/MMS it's crap. Get your friends onto Signal or, hell, even WhatsApp so you can have real cross-platform, secure (less some metadata) communication.
• Despegar 6y ago
  It very much matters if the terms changed, considering that the long shot legal precedent Epic is relying on is Kodak v. Image Technical Services. Terms changing in that case was a key element of why a single brand could be considered a valid antitrust market.
  • _qulr 6y ago
    Could you explain this in more detail? I read about this case, and my understanding is that the Independent Service Organizations ("ISOs") didn't actually have a direct contractual relationship with Kodak. They were truly independent, and thus there were no terms to change.
    • Despegar 6y ago
      Kodak monopolized the aftermarket for parts and service after their customers were "locked in." The primary market for their equipment was competitive and they didn't have monopoly power, but the Supreme Court still decided against them. This established that a single brand could be a "relevant market" for antitrust purposes under certain circumstances. This is the case that Epic is relying on against Apple. Unfortunately for them plaintiffs almost never win under Kodak antitrust theories.
      • _qulr 6y ago
        > Kodak monopolized the aftermarket for parts and service after their customers were "locked in." It's not clear to me that the timing was essential. Apparently Kodak had a policy since 1975 to only sell parts to direct purchasers of equipment, but the initial case wasn't filed until 1988. So the official terms, which were between Kodak and customers, not Kodak and ISOs, hadn't changed recently. Clearly Kodak was taking some non-official anticompetitive actions, but that's not the same as changing the official terms.
        • Despegar 6y ago
          Subsequent decisions by circuit courts have used the lack of an explicit policy change to find against the plaintiff. This case is at the outer boundaries of antitrust law and lower courts have effectively taken the perspective of the dissent to limit its applicability.
• awinder 6y ago
  Just a reminder that actually by definition consumer harm is the bedrock standard for antitrust litigation in the US. Scale and market power may be components of an argument for consumer harm, but they are not sufficient in and of themselves.
  • maxsilver 6y ago
    > consumer harm is the bedrock standard for antitrust litigation in the US. Which is really dangerous, IMHO, because a lot of the most vile bits of monopoly power can happen without directly causing immediate consumer harm. You shouldn't need to prove consumer harm to win antitrust litigation. That should be just one of a few different harms, any one of which should be able to win antitrust litigation.
    • agensaequivocum 6y ago
      Can you give examples of other kinds of harm you are thinking of?
• starfallg 6y ago
  >Scale and market power are what makes a monopolist, by definition. It doesn't matter if the terms have changed; what has changed since 2008 is the scale and power of Apple. Anti-trust laws have specific conditions to meet such as predatory pricing, product tying, exclusive dealing, etc. It's not just a matter of market share and market power, they have to have obtained or maintained that market position unfairly. This sets a pretty high bar in a market with 2.5 major app platforms (Apple, Google and Amazon).
• deleted 6y ago
  [deleted]