5 ms·

You are framing this as if there is a magical "growth curve" that must take you from an inovative startup to a 800 pound gorilla that has a complete chokehold o

by yholio 5y ago

You are framing this as if there is a magical "growth curve" that must take you from an inovative startup to a 800 pound gorilla that has a complete chokehold over the market. No, if regulators do their job, nobody gets to ask that question because there is continuous competition. Getting to that monopoly or oligopoly requires sustained effort from would be monopolists, it's a strategy they have been executing for more than a decade. And if you do that, you must expect there is a moment where society says: ok, it's time to regulate it and not let company X extract economic rent solely based on market dominance.

simonh 5y ago
Not at all, there was nothing inevitable about Apple's success, many analysts, pundits and their competitors have been adamant Apple would fail for the first decade or so of the iPhone. After that these claims started looking a bit thin. You're presuming that market abuse has occurred and that market abuse is the only way to get popular, but I don't see that's a given. Maybe people simply genuinely like iPhones just the way they are, and maybe network effects just legitimately lead to the most popular platforms dominating. Apple don't have a monopoly on the phone market anyway, they only have 27% of the South Korean phone market. In the US it's 65%, high but not a monopoly, but it only went over 50% in 2020. What changed to make them a market abuser and when did it happen, as you allege? That's the question OP is asking.
- hutzlibu 5y ago
  "What changed to make them a market abuser and when did it happen, as you allege? That's the question OP is asking. " There is no clear line or answer, as the topic is incredibly complex. Electronic devices are not just gadgets anymore, but tools to participate in modern life. We never had that situation before. So by traditional meassures like absolute market share, apple might not be a monopolist, but because of the massive lock in and market dominance (of the luxory segment), with all its implications, I surely would say they abuse their power since a long time. But I also do not believe in regulations as the magic bullet to really solve it, exactly because the lines are too blurry.
- kbenson 5y ago
  They've expressed anti-competitive behavior from the beginning, but it's advanced over time. It's the confluence of factors that makes it particularly bad in Apple's case. You can't chance the software (OS) on the device. You can't run iOS on a different set of hardware. You can't run any store but the App Store on iOS. You can't deliver software to customers without using the App Store (or jumping through hoops for very limited methods of getting it on there otherwise). It's not that 30% was ever good or bad, but that initially there was no competition, and at every step Apple has taken steps to make sure competing is extremely hard to do, by tying you to an entire ecosystem. Android is better in some respects, but is mostly happy to not actually compete on a lot of levels because that would possibly endanger the 30% industry standard. What we have is two extremely large players, so large and so establishes and in a market that takes so much money to enter that new competitors are at an extreme disadvantage agreeing, even if tacitly, that the fees for their stores are not something they will compete on. That's not better than when they agreed they wouldn't hire each other's employees (which they were punished for). It benefits only themselves at the detriment of everyone else, and through market manipulation. If they actually cared to compete, we would see competition in store fees.
  - judge2020 5y ago
    > They've expressed anti-competitive behavior from the beginning, but it's advanced over time. But is anticompetitive behavior in itself illegal? If so, why is it only being investigated now, 10+ years later?
    - kbenson 5y ago
      > But is anticompetitive behavior in itself illegal? Yes. See https://www.ftc.gov/enforcement/anticompetitive-practices https://www.ftc.gov/enforcement/anticompetitive-practices > If so, why is it only being investigated now, 10+ years later? By it's nature and the nature of our system it's often hard to prove or hard to actually prosecute, as those that engage in it are often large and powerful. We have laws regarding monopolies not because they're "monopolies", but because it's a specific subset of anticompetitive behavior that was seen that the legislative body wanted to make it easier to prosecute, and easier to prevent before it actually happens (which is why the government rejects some mergers as bad for consumers). That we didn't prosecute this before likely has many causes. From the token appearance of competition between iOS and Android to an unwillingness of politicians to go after companies that are seen favorably in the public eye and/or that have lots of money and contribute a lot of funds to reelection campaigns. Until a sizable chunk of the public is behind them, few politicians have the desire to be the first to call for reform that would be a major impact to some of the largest companies in the world, for multiple obvious reasons ranging from funded competitors to worried stockholders to how many people that company employs and if it will affect that. Edit: Also, there's not usually a rush to investigate small or medium size businesses, or markets that are so new that it's plausible that competitors haven't shown up yet. That's the other half of the "Android and iOS aren't really competing" point. Initially it looked like competitors were around, but it wasn't always obvious that certain things just weren't on the take as competition until it became impossible to ignore. That everyone charged 30% and then all of a sudden there was massive change just as legislation was being considered is a dead giveaway, but also not something those companies could afford to not try in appeasement.

by yholio 5y ago

simonh 5y ago

Not at all, there was nothing inevitable about Apple's success, many analysts, pundits and their competitors have been adamant Apple would fail for the first decade or so of the iPhone. After that these claims started looking a bit thin. You're presuming that market abuse has occurred and that market abuse is the only way to get popular, but I don't see that's a given. Maybe people simply genuinely like iPhones just the way they are, and maybe network effects just legitimately lead to the most popular platforms dominating. Apple don't have a monopoly on the phone market anyway, they only have 27% of the South Korean phone market. In the US it's 65%, high but not a monopoly, but it only went over 50% in 2020. What changed to make them a market abuser and when did it happen, as you allege? That's the question OP is asking.

hutzlibu 5y ago
"What changed to make them a market abuser and when did it happen, as you allege? That's the question OP is asking. " There is no clear line or answer, as the topic is incredibly complex. Electronic devices are not just gadgets anymore, but tools to participate in modern life. We never had that situation before. So by traditional meassures like absolute market share, apple might not be a monopolist, but because of the massive lock in and market dominance (of the luxory segment), with all its implications, I surely would say they abuse their power since a long time. But I also do not believe in regulations as the magic bullet to really solve it, exactly because the lines are too blurry.
kbenson 5y ago
They've expressed anti-competitive behavior from the beginning, but it's advanced over time. It's the confluence of factors that makes it particularly bad in Apple's case. You can't chance the software (OS) on the device. You can't run iOS on a different set of hardware. You can't run any store but the App Store on iOS. You can't deliver software to customers without using the App Store (or jumping through hoops for very limited methods of getting it on there otherwise). It's not that 30% was ever good or bad, but that initially there was no competition, and at every step Apple has taken steps to make sure competing is extremely hard to do, by tying you to an entire ecosystem. Android is better in some respects, but is mostly happy to not actually compete on a lot of levels because that would possibly endanger the 30% industry standard. What we have is two extremely large players, so large and so establishes and in a market that takes so much money to enter that new competitors are at an extreme disadvantage agreeing, even if tacitly, that the fees for their stores are not something they will compete on. That's not better than when they agreed they wouldn't hire each other's employees (which they were punished for). It benefits only themselves at the detriment of everyone else, and through market manipulation. If they actually cared to compete, we would see competition in store fees.
- judge2020 5y ago
  > They've expressed anti-competitive behavior from the beginning, but it's advanced over time. But is anticompetitive behavior in itself illegal? If so, why is it only being investigated now, 10+ years later?
  - kbenson 5y ago
    > But is anticompetitive behavior in itself illegal? Yes. See https://www.ftc.gov/enforcement/anticompetitive-practices https://www.ftc.gov/enforcement/anticompetitive-practices > If so, why is it only being investigated now, 10+ years later? By it's nature and the nature of our system it's often hard to prove or hard to actually prosecute, as those that engage in it are often large and powerful. We have laws regarding monopolies not because they're "monopolies", but because it's a specific subset of anticompetitive behavior that was seen that the legislative body wanted to make it easier to prosecute, and easier to prevent before it actually happens (which is why the government rejects some mergers as bad for consumers). That we didn't prosecute this before likely has many causes. From the token appearance of competition between iOS and Android to an unwillingness of politicians to go after companies that are seen favorably in the public eye and/or that have lots of money and contribute a lot of funds to reelection campaigns. Until a sizable chunk of the public is behind them, few politicians have the desire to be the first to call for reform that would be a major impact to some of the largest companies in the world, for multiple obvious reasons ranging from funded competitors to worried stockholders to how many people that company employs and if it will affect that. Edit: Also, there's not usually a rush to investigate small or medium size businesses, or markets that are so new that it's plausible that competitors haven't shown up yet. That's the other half of the "Android and iOS aren't really competing" point. Initially it looked like competitors were around, but it wasn't always obvious that certain things just weren't on the take as competition until it became impossible to ignore. That everyone charged 30% and then all of a sudden there was massive change just as legislation was being considered is a dead giveaway, but also not something those companies could afford to not try in appeasement.