
Elizabeth Warren wants to break up Apple, too - gkanai
https://www.theverge.com/2019/3/9/18257965/elizabeth-warren-break-up-apple-monopoly-antitrust
======
WaltPurvis
Elizabeth Warren apparently knows very little about Apple; she's making a
random and meaningless recommendation based in ignorance.

Her rationale for breaking up Apple is "you’ve got to break it apart from
their App Store. It’s got to be one or the other. Either they run the platform
or they play in the store."

But Apple mostly doesn't "play in the store." Aside from Final Cut and Logic
Pro, they sell virtually no products in the app store.

All the apps that Apple sells combined together amount to a _tiny_ fraction of
one percent of Apple's revenues. It's probably not even one-tenth of one
percent. Apple doesn't care at all about this revenue. I'm not sure why
Elizabeth Warren cares about it. They could spin their apps off into a
separate company, like they did with Claris years ago, but I doubt they'd even
bother; they'd either just kill the products or, more likely, give them away
for free. (Unless Warren thinks Apple shouldn't be able to provide free
software to users, in which case she should really stop while she's not too
far behind.)

~~~
fauigerzigerk
Her wording is clumsy but the meaning is crystal clear to me:

If you provide a platform you should not be allowed to compete with those who
build on top of that platform, because it wouldn't be a level playing field.

Apple provides iOS as a platform for others to build on, so in her view Apple
should not be allowed to offer Apple Music to compete with Spotify or Apple
Maps to compete with Google Maps or the upcoming Apple Movies to compete with
Netflix.

And this is not a small issue. This is everything Apple means when they say
they want to expand their services business.

It's very clear what it means. It's not ignorant. But I fear it could have
side-effects that she hasn't considered.

What if those rules had been in place when Apple first came up with the
iPhone? I think Steve Jobs might have opted for vertical integration and
against becoming a platform in the first place. There might never have been an
App Store at all.

There wouldn't have been a level playing field because there wouldn't have
been a playing field.

I think there is room for better regulation of internet giants. But it's
incredibly complex, and each case is very different.

I would favor a more cautious approach. For instance, large platforms should
be required to have some sort of independent conflict resolution mechanism.

Closing accounts of small businesses that build on top of your platform
without recourse and with scant explanation is unacceptable if you're one of a
handful of platforms worldwide.

~~~
amazingman
>If you provide a platform you should not be allowed to compete with those who
build on top of that platform, because it wouldn't be a level playing field.

Isn’t this exactly what grocery store chains do?

~~~
fauigerzigerk
Yes, store brands. I think what sets those internet giants apart is their
aggressive drive to expand into ever more business activities, integrating
both horizontally and vertically. Supermarket chains appear stagnant and lame
in comparison.

------
Upvoter33
Breaking up the tech giants is not a solution to the problems that confront
us. Legislation about our rights to digital privacy and related issues are; I
hope the powers that be work on that instead of this sound-byte friendly
"let's break 'em up" approach. A 2-person company could compromise your
privacy just as easily as a 2-trillion dollar company.

~~~
awinder
You could even exactly pass GDPR as a first measure — there would be a head
start on crafting legislation, and businesses are largely implemented against
it, they just need to extend existing practice to US customers / users.

Even that is going to be a hard sell in the political climate though. Twisting
to take an even more abrasive and high-touch action is just not going to
happen. Hopefully democrats will learn to calm themselves down and inject some
degree of sanity over the next year because Americans deserve a rational
alternative to the era of Donald trump. Not some Sophie’s Choice of two shock-
and-awe Americas.

~~~
ianai
Legislation requires a 2/3rds control of government. The republicans have a
stranglehold on the US senate due to every state getting two senators. There
are simply more rural, conservative states than would tolerate that change.

Warrens idea points out a better idea. Presidential candidates from non-
republicans can do their most work with powers the presidency already has:
drug criminalization, immigration, pardon powers, etc. I’m pretty sure a
president can break up companies under the trust buster acts from the late
1800s, but I'm basing that on decades old public schooling.

~~~
awinder
The platform utility stuff would all require new legislation. Maybe the
argument is that you threaten antitrust cases unless tech goes along but that
too would apply to gdpr or some other low touch solution.

------
cimmanom
This is an interview that goes into more depth about Warren’s proposal. Only a
few questions are about Apple; the rest further elucidate her reasoning behind
the proposal as a whole.

------
mc32
Using a metric such as revenue is too simplistic. There are some concerns
about power over competitors, consumers, etc., but arbitrarily setting the
measure af revenue of X per year (plus inflationary adjustment of whatever) is
not the way to go about it, but maybe this is a ruse to get a constituency
excited and doesn’t really mean it.

I do believe some of thd giants have too much leverage but I don’t see
anything magical about $25BB/year.

------
andreilys
Looking forward to living in a world that's dominated by Chinese tech
companies who can compete on a global scale without their governments trying
to actively undermine them.

~~~
votepaunchy
The global Chinese companies (revenue > $25B) would be excluded from the US
market. Otherwise Silicon Valley would simply incorporate overseas.

~~~
zaroth
That’s not going to stop the massive technology advances they will amass from
economies of scale (particularly in AI) ultimately dominating the market if
the USG goes into Silicon Valley with an axe.

~~~
rifung
I'd argue that competition would drive more technological advances.

There are commonly complaints on HN that FAANG are sucking up all the talent
after all. Having worked at Amazon and Google I definitely feel most people
are overqualified..

~~~
rayiner
Since when does competition drive more innovation? What’s more innovative,
Google, which uses its monopoly on search to bankroll things like self-driving
cars, or Lenovo, which is in an intensely competitive PC market? How
innovative is the Android phone market, versus Android itself?

As a thought experiment, imagine Apple adopted Android, thus opening itself up
to more competition. Do you think they would be more innovative as a result?
Or is Apple’s level of innovation (it’s CPUs are destroying its conpetitors’
By a factor of 2-3x performance per watt these days), the result of being able
to leverage massive cash flows that its monopoly on iOS devices throws off?

------
IdontRememberIt
I honestly do not understand who she is trying to please: tech is not banking
([https://en.wikipedia.org/wiki/Separation_of_investment_and_r...](https://en.wikipedia.org/wiki/Separation_of_investment_and_retail_banking)
). There is no systemic risk or too-big-to-fail risk for the government.

Also, she would make the US companies considerably weaker against the chaebols
(Samsung) and Chinese competitors having the same but more agressive strategy.
[http://www.businessofapps.com/guide/app-stores-
list/](http://www.businessofapps.com/guide/app-stores-list/)

~~~
charlesism

        tech is not banking
    

It's 2019. That argument would hold more weight if FAANG weren't aleady in the
payments market ( eg: apple.com/applepay , pay.google.com ). If they aren't
banks now, they will be soon.

~~~
coredog64
I believe “banking” in this context isn’t “retail banking” (moving money
around) but “investment banking”. It’s good to have some reasonable regulation
of the former, but it’s the latter that allegedly poses a threat to the
economy at large.

FAANG is unlikely to sell CDOs around “likes and shares” ;)

~~~
justizin
> FAANG is unlikely to sell CDOs around “likes and shares” ;)

Let's revisit this in 10 years ;)

------
wickedOne
is this going to solve anything?

sounds like cutting down a tree when it gets too big rather than preventing it
growing like that...

i'm quite sure companies like google, apple, facebook, etc. are creative
enough to find a way to get around this restriction which will just ensure a
false sense of security.

i get the whole monopoly and fair competition issues, but haven't there been
rules and regulations for those for quite a while?

apart from that: how realistic is this scenario to get actual laws enforing it
when those same companies are pretty much funding the government?

~~~
0xcde4c3db
> i'm quite sure companies like google, apple, facebook, etc. are creative
> enough to find a way to get around this restriction

That was my initial reaction as well, but after looking into it a little bit
I'm not so sure. The wording of the Sherman Act is pretty broad, and the
history of how it's been applied by the courts seems to be pretty complex (as
might be expected with a broadly-worded law from 1890), so I'm inclined to
doubt any explanation of the situation that would fit on a bumper sticker.
There are, I assume, important legal reasons behind how _United States v.
Microsoft_ unfolded, with a protracted hard-fought court battle followed by a
settlement that imposed some pretty major restrictions on Microsoft. If
Microsoft could have easily gotten around the effects of a breakup, I'd expect
almost everything about that fight to be different.

~~~
wickedOne
> If Microsoft could have easily gotten around the effects of a breakup, I'd
> expect almost everything about that fight to be different.

you are right and i pretty much forgotten about that.

microsoft fought a similar battle in europe with the same legal outcome and
basically resulting in a "browser pick" splash when you installed the OS and
that was about it.

that's a story where there was actually taken some action.

but, for example, for years it's been frowned upon that companies like apple
"bank" their money in, for example, ireland and get away with not paying taxes
in the countries they actually have offices.

that's a story where there has been no action for a (known) issue like the one
described in the aticle. so how likely will it be that tech giants will create
a legal entity abroad, hosting their platform, whilst they will continue to be
the biggest player on that platform?

i'm not saying ms. warren doesn't have a point, just that it seams that this
is just another "symptom control" item which sounds politically correct, but
won't get any traction in the "real world"

------
mikhailt
While everyone else covered the main topic, there is one aspect of her
proposal I disagree with; preventing the platform owners from selling/offering
said apps on the said platform. (I could be misunderstanding Warren on this,
please correct me if I'm wrong on this).

Software/hardware integration is a good thing, not a bad thing. Safari and
Edge remains the most efficient browsers on their platforms because the
platform owners know the deeper levels, they're the most experienced and
they're in place to optimize both the software and hardware.

Now, one could say that the said platform owners must open up the APIs fully
(which I have no problem with as long as it doesn't violate any security /
privacy issues), so other browsers could be just as efficient but how would
the platform owners know how to improve if they don't try it first?

Everything else, I kinda agree with. I would love to see all platforms require
a separation/firewall between the platform owners and App Store but mainly
because it allows customers the ability to use other tools that is not
normally available with sideloading other App Stores and also other OSes
(maybe?)

------
cascom
Would consumers benefit from this? What businesses are lobbying for this?

~~~
rifung
Possibly because you'd have more competition although higher prices as well.
On the other hand, this would be much better for the economy which is, in my
opinion, more important.

------
peteretep
I’ve read her proposal and actually it sounds pretty exciting to me. I wonder
where AWS fits into all of this

~~~
lykr0n
I assume AWS would be split away from Amazon.com. So Amazon would turn into
AWS, Amazon.com + Amazon Logistics, Amazon Prime Music/TV, ???

~~~
votepaunchy
Only the original content would be forced to split from Prime. You could have
a combined marketplace and video platform, but you can’t self host (above $25B
revenue).

~~~
michaf
I wonder if Netflix would have to spin off their in-house productions once
they reach $25B revenue. Or, if they don't, if the mobile platform providers
could change their business models into similar subscription services to avoid
the break-up.

------
dwiel
If we are talking about breaking tech monopolies, how about comcast? You can
break up google and apple and Amazon, but I still only have one real choice
for the internet connection I use to access them. I believe this is true for
about 80% of americans.

~~~
maxxxxx
I think cable providers should be forced to open up their lines for other
resellers that then can compete with different plans. It works pretty well for
cell phones where you have multiple MVNOs offering plans on the big networks.
In short the ownership of infrastructure should be separate from selling to
end users.

------
Dawsrallah
I don't like the breakup idea, but I like the idea of threatening the big tech
companies, even crudely, so as to extort more R&D from firms that may
eventually revert to the low-investment, high divident BigCo norm when
founders die/retire. Government contracting is corrupt and government agencies
are not always good at productization and other stages of research

BigCos combine the state's giant revenues and scale with the private sector's
personnel discipline and agility. Breakup and civil settlement threats may
effectively cajol firms into buying the goodwill of the state through
breakthroughs that please voters and increase US power in the international
system

------
0815test
Frankly I don't see what the point of breaking up Apple would be. Where's the
monopoly potential/barrier to entry in the markets Apple is serving? They have
quite viable competitors in pretty much all of them. I think a bit of well-
designed regulation would go a lot further here, especially around right-to-
repair (and "right to keep older hardware going after it loses support") and
general platform openness for things like the App store.

~~~
timbit42
Agreed. Also Facebook just needs to be regulated. Amazon and Google should be
broken up however. Also, Google needs to be regulated as they punish websites
that compete with their own products.

------
vinceguidry
Breaking up giant commercial monoliths is essential creative destruction for
the economy. They're not going to do it themselves. It's not a question of
whether they're going to break up, it's only a question of when. I hope it
happens sooner rather than later because I want to live in the Brave New World
where dozens of services have to compete for the markets left behind.

~~~
timbit42
It makes sense to break up Google and Amazon. Facebook, not so much but they
need to be regulated. Google needs to be regulated as well. I don't see the
justification for breaking up Apple.

------
sys_64738
She has a point. Apple has a competitive advantage over others as it makes the
rules it enforces. If critical change comes to the App store then Apple can
make changes to their apps before the change is announced to everybody else.
That's a conflict of interest which creates unfair business advantage.

~~~
zaroth
All business naturally have some sorts of advantages. Otherwise they would not
be in business.

Not all business advantage is considered “unfair”. Apple is not unfairly
competing with apps on its store, quite the contrary, Apple is highly invested
in making the apps on its store the most pleasing, productive, performant, and
profitable that they possibly can.

~~~
skewart
> Apple is not unfairly competing with apps on its store

All the Apple apps that are pre-installed on an iPhone have a massive
advantage over third-party options in the App Store. Most users just stick
with the pre-installed Apple apps for email, web browsing, using the camera,
looking through photos, and taking notes. There used to be third-party
flashlight apps in the app store, but Apple used their platform power to crush
those apps when they included flashlight functionality for free in iOS 7.

Of course, one can argue that Apple has used its platform power for a
worthwhile goal - creating a better user experience. People made a similar
argument about Walmart back in the 90s and 00s when they were in the news for
crushing small businesses - it's fine because Walmart is just trying to give
customers lower prices.

------
maxxxxx
I think in principle it’s a good thing to avoid having companies that are very
big. These giants are not very innovative compared to their size so having
multiple smaller competitors is probably healthy.

Breaking up large companies may be a form of “creative destruction “. Maybe
there are other ways to accomplish this big I am convinced that very large
companies are not good for a market economy.

------
tracer4201
Her political stances are going the extreme route. These ideas on breaking
tech companies has literally no well thought merit, at least from Warren.

How exactly is Apple a monopoly? Because they have an App Store? They don’t
really sell products in there other than maybe Final Cut Pro. So is the issue
that no company should be able to set the terms of what it allows in its App
Store? What’s the legal basis here? How is this detrimental to society or even
just the US?

This sounds more like Warren might be getting bankrolled by Apples competitors
(best case) or she’s completely clueless about how business or economics
works, completely ignorant of who Apple competes with (it’s an international
market, recall Samsung), etc.

It was the same nonsense the other day about breaking up Amazon. I asked then
and I’ll ask again - by what metric are they a monopoly? Is warren going to
break up WalMart and every other business that established a store brand?

No of course not. This is nonsense, pandering to the fringes of the left, much
like Trump panders to the racists, intolerance folks on the right.

I don’t think her campaign is going to go anywhere, and if anything, she’s
ruining her credibility. I want Trump gone in 2020, but I don’t want to
replace one dangerous loon with another.

------
sasasassy
Yes please. All monopolies are damaging to consumers, capitalism and
democracy. Please do away with as many as possible. The only notable
exceptions are business areas where the physical constraints force a single
company to operate, like sanitation and sewage.

