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> This also ignores the fact that the app developers offer immense value to Apple. But for the presence of millions of apps on its App Store, Apple would not be
by freedomben 3y ago
> This also ignores the fact that the app developers offer immense value to Apple. But for the presence of millions of apps on its App Store, Apple would not be able to sell many iPhones. To illustrate why 20% is excessive use the following thought experiment. Would Apple maintain an App Store if the standard commission was reduced to 5%? It would. And what if the commission was 0%. It still would because it would have no choice. People expect to be able to download Netflix, Uber, Tinder, Spotify and many other apps on their iPhones. No apps mean no iPhone sales, which represent the bulk of Apple’s revenue. In other words, the commission is nothing but an illustration of Apple’s bottleneck power.
This is quite an interesting point that really helps to illustrate how over-priced Apple's "commission" is. I don't think it's a generally useful exercise for everything, or maybe even most things, as "market rate" is purely what people will pay. Pricing things based on production costs is a classic newbie mistake. But where I don't think this approach is or should apply to Apple, is in the fact of the monopolistic power they have over the system. It is much more a tax than a sale of an item. When you start talking about taxes, you're no longer talking about market rate because you're not dealing with a free market.
We can argue about whether or not Apple is a monopoly/gatekeeper, but for the purposes of the DMA (which is the subject of this article) they have been decided as such, and remember, TFA is talking about Apple's response to the DMA and the European commission.
- falserum 3y agoIt can be argued that it is not monopolistic, because it dies not have 50% of market share. At the same time, it is a clever technique. Create a walled garden, and subvert free market (act anticompetitively) only there. As long as your garden does not exeed 50% of the land, your golden.
- InsomniacL 3y ago> It can be argued that it is not monopolistic Depends where you draw the line. The AppStore has 100% market share of the iPhone platform. Can Microsoft Windows block all web browsers except for Microsoft Edge because it only has a 29% share of device Operating System's?
- qarl 3y ago> The AppStore has 100% market share of the iPhone platform. Well, sure. But my local H&M has a monopoly inside the H&M. For example, they don't allow any competitor's products inside their store. Would you call that a monopoly?
- fsflover 3y agoYes, if there are only two stores in the world.
- InsomniacL 3y agoIf H&M was the only store that 2.2 billion people could use for anything, I would absolutely call that a monopoly. You can choose to shop anywhere without incurring significant detriment, you can event get H&M products at other stores.
- qarl 3y agoOk - so you're arguing that the threshold for monopoly should be well below 50%? And that should apply to any company that passed that threshold? For example, Tesla has a monopoly on electric cars? Do I have that right?
- InsomniacL 3y agoObviously not. In the descending hirarchy, you could have.. - Electronic Devices (Computers, Laptops) - Portable Devices (Laptops, Phones) - Mobile Phones (Samsung, Google, Apple) - Mobile Phone OS (Android, IOS) - Mobile Phone App Stores (Google Play, Apple AppStore, Aamazon App Store) You're drawing the line at where a monopoly is applicable at Mobile Phones. I'm saying since IOS has 2.2 billion devices, you can consider that it's own market large enough to be applicable for monopoly purses.
- qarl 3y agoI'm afraid I don't follow. Are you saying it's a matter of absolute numbers (2.2 billion devices) and not percentage of market capture? As I understand it, McDonalds has sold over 99 billion Big Macs.