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I think most reasonable people discussing this topic are aware that there are some similar arrangements made between retailers and manufacturers. The one big di

I think most reasonable people discussing this topic are aware that there are some similar arrangements made between retailers and manufacturers. The one big difference is that there is no retailer monopoly and thus the overhead they charge has been negotiated by the market. I.e. their overhead charges are probably a lot more fair than 30%. If Apple were to allow alternative app stores, I think we’d see price normalization in this space. The various app stores would then be competing on price based on the costs of hosting their App Store service.

geofft 6y ago
Sure, but I'm disagreeing with the claim that there is no retailer monopoly and that there is an Apple monopoly. Landlords have exclusive use of land, a limited resource. If I am running a clothing brand and I want to have a store in a particular city, my options are to build a store on empty land very far from the city center, or to negotiate with the person who has the land.n If I want to have a store in a mall, I certainly can't just built on my own, and in many cities, there's probably not even another mall to provide competition. Apple is charging for use of the Apple App Store platform. They are not charging for the Android Play Store platform. They are not charging for anything happening anywhere else. There is no exclusive resource like land involved, as demonstrated by the fact that Android was able to build the Play Store. I don't think it makes any sense to say that Apple has a monopoly over use of their own product, since a monopoly is about control of a market. But if we're going to make that claim, we should definitely say that each mall owner has a monopoly over use of that mall! That is at least as sensible as saying that Apple and Android both have monopolies over their respective competing products. And I think that the concern people have isn't whether the price has been decided by the market - it clearly has, and tons of participants are willing to participate even with the 30% cut - the question is whether the price is fair in a moral sense. I do agree with the answer that it is not. But I think you have to ask the right question to get the right answer.
- CyberRabbi 6y ago
  Apple’s product makes up at least 60% of mobile phone usage in the US[1]. No single landlord owns 60% of retail space in the US. If you want to say landlords have control over their market not unlike apples control, you have to concede that apples control is likely two orders of magnitude more than any single retail landlord. To access 60% of US mobile phone users, App developers must go through Apple. Apple faces no competitor pressure when deciding on their prices, it is their discretion alone. Landlords face competitor pressure but Apple does not in this space so in that sense, no, the market has not decided apple’s prices. Aside from the practical issues concerning their control of the market, the argument that Apple should be able to charge whatever they want because it’s their product is normative. These normative claims can be challenged when we consider the practical effects their market dominance has on app developers and users alike. [1] https://www.phonearena.com/news/apple-iphone-record-sales-us-december-2020_id129957 https://www.phonearena.com/news/apple-iphone-record-sales-us...
  - geofft 6y ago
    Why are you drawing the line at the US? Worldwide, Apple's share is something like 20-25%. And at the level of a single city, it is very common for a single landlord to own over 60%, if not 100%, of mall space in a city. But anyway - there are something like 1,000 to 2,000 indoor shopping malls in the US, depending on how you count, and there are companies that own hundreds of malls, and they're consolidating. Would it become a problem if one landlord ended up owning 60% of mall retail? Why? And how are you concluding that Apple faces no competitor pressure? Apple's 30% cut is exactly equal to Google's 30% cut. Is this a massive coincidence, or is this the market doing exactly what you'd expect a market to do and equalizing prices between competitors for similar products? Why hasn't Apple raised their take to even 35%, if it really is their discretion alone? (Microsoft, as it happens, also takes a 30% cut of Xbox-related sales on their store. They take a 5-15% cut of other apps. https://9to5mac.com/2019/03/06/microsoft-store-revenue-share/ https://9to5mac.com/2019/03/06/microsoft-store-revenue-share... This is pretty much exactly with what you'd expect if 30% is what the market will bear for reasonably successful products, and if Microsoft is obligated to compete on price for non-Xbox-related store purchases.)
    - 6y ago

geofft 6y ago

Sure, but I'm disagreeing with the claim that there is no retailer monopoly and that there is an Apple monopoly. Landlords have exclusive use of land, a limited resource. If I am running a clothing brand and I want to have a store in a particular city, my options are to build a store on empty land very far from the city center, or to negotiate with the person who has the land.n If I want to have a store in a mall, I certainly can't just built on my own, and in many cities, there's probably not even another mall to provide competition. Apple is charging for use of the Apple App Store platform. They are not charging for the Android Play Store platform. They are not charging for anything happening anywhere else. There is no exclusive resource like land involved, as demonstrated by the fact that Android was able to build the Play Store. I don't think it makes any sense to say that Apple has a monopoly over use of their own product, since a monopoly is about control of a market. But if we're going to make that claim, we should definitely say that each mall owner has a monopoly over use of that mall! That is at least as sensible as saying that Apple and Android both have monopolies over their respective competing products. And I think that the concern people have isn't whether the price has been decided by the market - it clearly has, and tons of participants are willing to participate even with the 30% cut - the question is whether the price is fair in a moral sense. I do agree with the answer that it is not. But I think you have to ask the right question to get the right answer.

CyberRabbi 6y ago
Apple’s product makes up at least 60% of mobile phone usage in the US[1]. No single landlord owns 60% of retail space in the US. If you want to say landlords have control over their market not unlike apples control, you have to concede that apples control is likely two orders of magnitude more than any single retail landlord. To access 60% of US mobile phone users, App developers must go through Apple. Apple faces no competitor pressure when deciding on their prices, it is their discretion alone. Landlords face competitor pressure but Apple does not in this space so in that sense, no, the market has not decided apple’s prices. Aside from the practical issues concerning their control of the market, the argument that Apple should be able to charge whatever they want because it’s their product is normative. These normative claims can be challenged when we consider the practical effects their market dominance has on app developers and users alike. [1] https://www.phonearena.com/news/apple-iphone-record-sales-us-december-2020_id129957 https://www.phonearena.com/news/apple-iphone-record-sales-us...
- geofft 6y ago
  Why are you drawing the line at the US? Worldwide, Apple's share is something like 20-25%. And at the level of a single city, it is very common for a single landlord to own over 60%, if not 100%, of mall space in a city. But anyway - there are something like 1,000 to 2,000 indoor shopping malls in the US, depending on how you count, and there are companies that own hundreds of malls, and they're consolidating. Would it become a problem if one landlord ended up owning 60% of mall retail? Why? And how are you concluding that Apple faces no competitor pressure? Apple's 30% cut is exactly equal to Google's 30% cut. Is this a massive coincidence, or is this the market doing exactly what you'd expect a market to do and equalizing prices between competitors for similar products? Why hasn't Apple raised their take to even 35%, if it really is their discretion alone? (Microsoft, as it happens, also takes a 30% cut of Xbox-related sales on their store. They take a 5-15% cut of other apps. https://9to5mac.com/2019/03/06/microsoft-store-revenue-share/ https://9to5mac.com/2019/03/06/microsoft-store-revenue-share... This is pretty much exactly with what you'd expect if 30% is what the market will bear for reasonably successful products, and if Microsoft is obligated to compete on price for non-Xbox-related store purchases.)
  - 6y ago