7 ms·

stratechery has a reasonable explanation in one of the recent articles : "That last point may seem odd in light of Apple’s victory, but again, Apple was offeri

by udkl 3y ago

stratechery has a reasonable explanation in one of the recent articles : "That last point may seem odd in light of Apple’s victory, but again, Apple was offering an integrated product that it fully controlled and customers were fully aware of, and is thus, under U.S. antitrust law, free to set the price of entry however it chooses. Google, on the other hand, “entered into one or more agreements that unreasonably restrained trade” — that quote is from the jury instructions, and is taken directly from the Sherman Act — by which the jurors mean basically all of them: the Google Play Developer Distribution Agreement, investment agreements under the Games Velocity Program (i.e. Project Hug), and Android’s mobile application distribution agreement and revenue share agreements with OEMs, were all ruled illegal. This goes back to the point I made above: Google’s fundamental legal challenge with Android is that it sought to have its cake and eat it too: it wanted all of the shine of open source and all of the reach and network effects of being a horizontal operating system provider and all of the control and profits of Apple, but the only way to do that was to pretty clearly (in my opinion) violate antitrust law." The key is 'unreasonably restrained trade' - Any OEM was eligible to use Android, but what google did was restrict competition by 'entered into one or more agreements that unreasonably restrained trade' https://stratechery.com/2023/googles-true-moonshot/ https://stratechery.com/2023/googles-true-moonshot/

robertlagrant 3y ago
I think even this is a little unfair. Almost no one buys Android because they are a horizontal operating systems provider, and OEMs don't use it because of same, because the former don't care and the latter already know the reality. People use it because it's their best option, and not due to any monopolistic practices excluding alternatives. It's just the best option.
- LargeTomato 3y ago
  Agreed. If Google locked down their app store more aggressively they'd be legally in the clear. They played nice, just not nice enough, so they got anti-trusted.
  - jonhohle 3y ago
    They didn’t play nice. They made back channel deals with privileged partners. Love or hate the Apple arrangement, but they seem consistent on giving everyone the same terms. That’s what makes one anti-competitive and the other not.
    - amadeuspagel 3y ago
      > Love or hate the Apple arrangement, but they seem consistent on giving everyone the same terms. They can do that, because there's no other choice. If a company wants to offer their apps to iOS users, they have to go through the App Store, so they're in no position to bargain for better terms.
      - shwouchk 3y ago
        Indeed. And if a company wants to deal with US consumers, they need to comply with US law. That’s reasonable. And if/when some companies get referential treatment, you get (justified) uproar.
        smoldesu 3y ago
        Apple has received preferential treatment from US lawmakers, for almost a decade now. One could argue that's why the DMA and Japanese legislation exists in the first place.
        shwouchk 3y ago
        Can you substantiate this claim? And explicitly, the OP is not a valid example, since it is the subject of debate and that would lead to circular reasoning - I don’t see the current ruling as preferential in the least.
        smoldesu 3y ago
        It's not circular reasoning if multiple municipal states are coming around to it. It's controversial, but the demand for regulation is self-evident. Take the example how you'd like, but they're still independent markets and the legislative demands hold water. As for examples of preferential treatment, there's pretty obviously the 2013 Obama ITC intervention that overrode Samsung's complaint despite a fully substantiated prosecution (and now the Masimo case). In the Trump administration, Apple was one of the few companies operating in China offered specific tariff exemptions for their manufacturers. And then speaking generally, you have the lack of interest in regulating the progress of mobile experiences. Software is moving forward, and the technology to facilitate things like multiple app stores, payment processors and browser options have existed since the 90s. Apple and Google's objections to these features are obviously both petty, and their inability to negotiate is why we're seeing nuclear-option legislation in non-US markets.
- andyferris 3y ago
  Umm, some people like Samsung phones and some people like Pixels and there are lots of other popular handset makers. A small number of purchasers want to side load and therefore exclude Apple as an option. I think it’s not right to say the horizontal ecosystem isn’t a reason for Android’s commercial success. In reality it is a driving reason why Android succeeded over (and completely obliterated) Nokia/Microsoft/RIM - the variety of OEMs innovating rapidly meant they just couldn’t keep up. In the early days people frequently upgraded their Android phone with a better one, often from another Android manufacturer. So, Google knowingly created an open market and now is (or at least appears to be) abusing it.
  - echelon 3y ago
    > A small number of purchasers want to side load and therefore exclude Apple as an option. An overwhelming majority of consumers don't even know what side loading is. These decisions are not things lay consumers think about at all. The fact is that both Apple and Google set too many rules on a platform that is now essential for operating in modern society. These devices and platforms need to be opened up to competition. These companies are collecting tax on all innovation happening because of their gatekeeper positions.
    - robertlagrant 3y ago
      Postulate: I don't believe they are essential for operating in modern society. They're a nice convenience, but not essential.
      - fsflover 3y ago
        Do you also believe that tractors should run closed software?
        robertlagrant 3y ago
        Er, I don't have an opinion. I don't know nearly enough about tractors to have one.
type0 3y ago
> product that it fully controlled and customers were fully aware of No my experience, there are plenty of these techy customers online but I have yet to meet such Apple user IRL
- Terretta 3y ago
  >> product that it fully controlled and customers were fully aware of > No my experience, there are plenty of these techy customers online but I have yet to meet such Apple user IRL The entire premise and point of the Apple experience is not having to be fully aware of the tech. At all. Ever. For most Apple users, the tech is just not the point. It's that it is air. Don't think about it unless it's missing or stinks.
  - bluSCALE4 3y ago
    This. I left Android because they were slowly becoming a more rigid company and everything I had loved and valued were gone and Apple slowly started adding them to their OS. I was fully aware what I was buying into and what I was losing but I no longer cared because it felt only a matter of time before Android is the same. Though I've gotten less use out of my Apple phone, I don't really care because I've given up on the idea that a phone is an uncompromised computer.
    - TerrifiedMouse 3y ago
      I made the jump from Android fairly early on when I realized that phones are terrible general purpose computers and that I mostly just use it as a phone - i.e. use almost exclusively the restricted subset of features that’s typical of smartphones. I lose nothing moving to the iPhone and gain a better UX (no crap installed by carriers or anyone else for the matter) and get better post sales care (long term updates and quick security patches).
      - bluSCALE4 3y ago
        Up until recently, I would have said you were missing out since Android had a lot of unique things. Now, I agree. Android still does notifications better and I loved touch sensor customization like swiping the S8's sensor to open/close notifications menu, but even that may be coming soon with action button being replaced with touch button. Discovering shortcuts was a game changer and the live widgets are great. I'm stuck on iPhone 12 because I want to stay with mini but the dynamic island seems like a great addition. The only thing I miss is side loading and emulators, but again, even that might be coming. Android literally only has photos and google home devices over me. I don't even care for gmail anymore.
downWidOutaFite 3y ago
This answer is unsatisfying to me because "not allowing trade with 3rd parties" could be seen as a version of "unreasonably restrained trade". In general I think it's incorrect to try to divine a consistent legal principle from these two cases. Trials have an element of randomness so either case could have gone the other way under different judges and lawyers.
- bobthepanda 3y ago
  IIRC the Apple case went differently because * it has always been locked down, from the get go, so it has never misrepresented itself to consumers or the people participating in its ecosystem * it gained marketshare despite this very limitation, indicating that to some extent that is what consumers were expecting to purchase. Apple had zero marketshare in phones before iPhone. And many attempts have been made before and since, like Windows Phone, Fire Phone from Amazon, the Facebook phone, etc. * they hadn’t, at the time, told anyone else not to participate in other stores or on other platforms
  - notnullorvoid 3y ago
    > it gained marketshare despite this very limitation, indicating that to some extent that is what consumers were expecting to purchase. Have you ever watched the iPhone keynote? Either way I suggest you watch or rewatch, because it was marketed as a computer. The reason people didn't care about the restrictions (compared to a general purpose computer) at the time was because it was such a leap forward in mobile devices.
    - soraminazuki 3y ago
      The iPhone was marketed as "an iPod, a phone, and an internet communicator."
blacklight 3y ago
> Apple was offering an integrated product that it fully controlled and customers were fully aware of, and is thus, under U.S. antitrust law, free to set the price of entry however it chooses. I'm no expert in US antitrust laws, but this statement makes no sense to me. So I can basically establish an absolute monopoly by creating a product that I control entirely, with no support for 3rd-party providers for software, payments etc., which only supports hardware that is manufactured and certified by myself, and I can establish whatever entry price I want for it, as long as I'm very explicit that I'm selling a closed and monopolist product, and customers are aware of it? If that's indeed the case, then the US antitrust laws are quite broken.
- graeme 3y ago
  You aren’t allowed to do that, but the iPhone is not a monopoly product. Market share is about 57%, just barely over the minimum threshold for a monopoly finding. But crucially the phone market is quite competitive. People can easily switch and the iPhone does not have unrestrained pricing power. People tend to enthusiastically vs grudgingly buy an iPhone. If someone made a better product tomorrow it is easy to switch. “It is big and makes money and I dislike it” is not a monopoly criteria. You can read them here. https://www.ftc.gov/advice-guidance/competition-guidance/guide-antitrust-laws/single-firm-conduct/monopolization-defined https://www.ftc.gov/advice-guidance/competition-guidance/gui...
  - freedomben 3y ago
    > If someone made a better product tomorrow it is easy to switch. That is most certainly not the case for everybody. Sure you can just buy a new phone and move over your phone number, but you'll lose all of your purchases, your cloud storage (for many people all their family photos), interoperability with other (Apple) products, conversation history (iMessage), etc. If you never buy any apps and only use third parties for communication, then sure it's "easy" but most people are not in that boat.

by udkl 3y ago

robertlagrant 3y ago

I think even this is a little unfair. Almost no one buys Android because they are a horizontal operating systems provider, and OEMs don't use it because of same, because the former don't care and the latter already know the reality. People use it because it's their best option, and not due to any monopolistic practices excluding alternatives. It's just the best option.

LargeTomato 3y ago
Agreed. If Google locked down their app store more aggressively they'd be legally in the clear. They played nice, just not nice enough, so they got anti-trusted.
- jonhohle 3y ago
  They didn’t play nice. They made back channel deals with privileged partners. Love or hate the Apple arrangement, but they seem consistent on giving everyone the same terms. That’s what makes one anti-competitive and the other not.
  - amadeuspagel 3y ago
    > Love or hate the Apple arrangement, but they seem consistent on giving everyone the same terms. They can do that, because there's no other choice. If a company wants to offer their apps to iOS users, they have to go through the App Store, so they're in no position to bargain for better terms.
    - shwouchk 3y ago
      Indeed. And if a company wants to deal with US consumers, they need to comply with US law. That’s reasonable. And if/when some companies get referential treatment, you get (justified) uproar.
      - smoldesu 3y ago
        Apple has received preferential treatment from US lawmakers, for almost a decade now. One could argue that's why the DMA and Japanese legislation exists in the first place.
        shwouchk 3y ago
        Can you substantiate this claim? And explicitly, the OP is not a valid example, since it is the subject of debate and that would lead to circular reasoning - I don’t see the current ruling as preferential in the least.
        smoldesu 3y ago
        It's not circular reasoning if multiple municipal states are coming around to it. It's controversial, but the demand for regulation is self-evident. Take the example how you'd like, but they're still independent markets and the legislative demands hold water. As for examples of preferential treatment, there's pretty obviously the 2013 Obama ITC intervention that overrode Samsung's complaint despite a fully substantiated prosecution (and now the Masimo case). In the Trump administration, Apple was one of the few companies operating in China offered specific tariff exemptions for their manufacturers. And then speaking generally, you have the lack of interest in regulating the progress of mobile experiences. Software is moving forward, and the technology to facilitate things like multiple app stores, payment processors and browser options have existed since the 90s. Apple and Google's objections to these features are obviously both petty, and their inability to negotiate is why we're seeing nuclear-option legislation in non-US markets.
andyferris 3y ago
Umm, some people like Samsung phones and some people like Pixels and there are lots of other popular handset makers. A small number of purchasers want to side load and therefore exclude Apple as an option. I think it’s not right to say the horizontal ecosystem isn’t a reason for Android’s commercial success. In reality it is a driving reason why Android succeeded over (and completely obliterated) Nokia/Microsoft/RIM - the variety of OEMs innovating rapidly meant they just couldn’t keep up. In the early days people frequently upgraded their Android phone with a better one, often from another Android manufacturer. So, Google knowingly created an open market and now is (or at least appears to be) abusing it.
- echelon 3y ago
  > A small number of purchasers want to side load and therefore exclude Apple as an option. An overwhelming majority of consumers don't even know what side loading is. These decisions are not things lay consumers think about at all. The fact is that both Apple and Google set too many rules on a platform that is now essential for operating in modern society. These devices and platforms need to be opened up to competition. These companies are collecting tax on all innovation happening because of their gatekeeper positions.
  - robertlagrant 3y ago
    Postulate: I don't believe they are essential for operating in modern society. They're a nice convenience, but not essential.
    - fsflover 3y ago
      Do you also believe that tractors should run closed software?
      - robertlagrant 3y ago
        Er, I don't have an opinion. I don't know nearly enough about tractors to have one.

type0 3y ago

> product that it fully controlled and customers were fully aware of No my experience, there are plenty of these techy customers online but I have yet to meet such Apple user IRL

Terretta 3y ago
>> product that it fully controlled and customers were fully aware of > No my experience, there are plenty of these techy customers online but I have yet to meet such Apple user IRL The entire premise and point of the Apple experience is not having to be fully aware of the tech. At all. Ever. For most Apple users, the tech is just not the point. It's that it is air. Don't think about it unless it's missing or stinks.
- bluSCALE4 3y ago
  This. I left Android because they were slowly becoming a more rigid company and everything I had loved and valued were gone and Apple slowly started adding them to their OS. I was fully aware what I was buying into and what I was losing but I no longer cared because it felt only a matter of time before Android is the same. Though I've gotten less use out of my Apple phone, I don't really care because I've given up on the idea that a phone is an uncompromised computer.
  - TerrifiedMouse 3y ago
    I made the jump from Android fairly early on when I realized that phones are terrible general purpose computers and that I mostly just use it as a phone - i.e. use almost exclusively the restricted subset of features that’s typical of smartphones. I lose nothing moving to the iPhone and gain a better UX (no crap installed by carriers or anyone else for the matter) and get better post sales care (long term updates and quick security patches).
    - bluSCALE4 3y ago
      Up until recently, I would have said you were missing out since Android had a lot of unique things. Now, I agree. Android still does notifications better and I loved touch sensor customization like swiping the S8's sensor to open/close notifications menu, but even that may be coming soon with action button being replaced with touch button. Discovering shortcuts was a game changer and the live widgets are great. I'm stuck on iPhone 12 because I want to stay with mini but the dynamic island seems like a great addition. The only thing I miss is side loading and emulators, but again, even that might be coming. Android literally only has photos and google home devices over me. I don't even care for gmail anymore.

downWidOutaFite 3y ago

This answer is unsatisfying to me because "not allowing trade with 3rd parties" could be seen as a version of "unreasonably restrained trade". In general I think it's incorrect to try to divine a consistent legal principle from these two cases. Trials have an element of randomness so either case could have gone the other way under different judges and lawyers.

bobthepanda 3y ago
IIRC the Apple case went differently because * it has always been locked down, from the get go, so it has never misrepresented itself to consumers or the people participating in its ecosystem * it gained marketshare despite this very limitation, indicating that to some extent that is what consumers were expecting to purchase. Apple had zero marketshare in phones before iPhone. And many attempts have been made before and since, like Windows Phone, Fire Phone from Amazon, the Facebook phone, etc. * they hadn’t, at the time, told anyone else not to participate in other stores or on other platforms
- notnullorvoid 3y ago
  > it gained marketshare despite this very limitation, indicating that to some extent that is what consumers were expecting to purchase. Have you ever watched the iPhone keynote? Either way I suggest you watch or rewatch, because it was marketed as a computer. The reason people didn't care about the restrictions (compared to a general purpose computer) at the time was because it was such a leap forward in mobile devices.
  - soraminazuki 3y ago
    The iPhone was marketed as "an iPod, a phone, and an internet communicator."

blacklight 3y ago

> Apple was offering an integrated product that it fully controlled and customers were fully aware of, and is thus, under U.S. antitrust law, free to set the price of entry however it chooses. I'm no expert in US antitrust laws, but this statement makes no sense to me. So I can basically establish an absolute monopoly by creating a product that I control entirely, with no support for 3rd-party providers for software, payments etc., which only supports hardware that is manufactured and certified by myself, and I can establish whatever entry price I want for it, as long as I'm very explicit that I'm selling a closed and monopolist product, and customers are aware of it? If that's indeed the case, then the US antitrust laws are quite broken.

graeme 3y ago
You aren’t allowed to do that, but the iPhone is not a monopoly product. Market share is about 57%, just barely over the minimum threshold for a monopoly finding. But crucially the phone market is quite competitive. People can easily switch and the iPhone does not have unrestrained pricing power. People tend to enthusiastically vs grudgingly buy an iPhone. If someone made a better product tomorrow it is easy to switch. “It is big and makes money and I dislike it” is not a monopoly criteria. You can read them here. https://www.ftc.gov/advice-guidance/competition-guidance/guide-antitrust-laws/single-firm-conduct/monopolization-defined https://www.ftc.gov/advice-guidance/competition-guidance/gui...
- freedomben 3y ago
  > If someone made a better product tomorrow it is easy to switch. That is most certainly not the case for everybody. Sure you can just buy a new phone and move over your phone number, but you'll lose all of your purchases, your cloud storage (for many people all their family photos), interoperability with other (Apple) products, conversation history (iMessage), etc. If you never buy any apps and only use third parties for communication, then sure it's "easy" but most people are not in that boat.