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Elizabeth Warren wants to break up Apple, too (theverge.com)
54 points by gkanai 13 days ago | hide | past | web | favorite | 69 comments





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.)


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.


That makes a little sense, I guess, but

>"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."

are pretty bad examples to support this argument.

Apple has been competing with Netflix for years, and Netflix has kicked their butt at every turn.

By this argument, Google shouldn't be able to offer Maps on Android, so you'd have Apple Maps on Android phones and Google Maps on iPhones? I fail to see how that benefits consumers at all, and more to the point it does little or nothing to help small companies.

Antitrust laws are intended to benefit consumers. It's hard to square antitrust laws with the idea that consumers should be forced to pay for apps from small companies rather than enjoying free apps from platform vendors.


>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?


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.

I sure wish someone would force Apple to allow users to sideload apps and buy from other stores though because if you're going to make a smartphone app these days, you cannot afford to ignore iOS and therefore it might as well be a monopoly.

Captive markets should be made illegal IMO.


I'd like to see Apple split apart the two things it's doing with app review.

There's value in Apple forbidding installation of apps that might contain malicious code (or just drain your battery).

There's also value in Apple running a "store front" which declines to advertise apps which have poor UX or are too similar to a thousand other apps.

Apple could have a category of app that has a download page you can link to, but is otherwise invisible on their app store. And it could receive a fee (in line with its costs) for hosting and reviewing those apps.


Well, it was the journalist who brought up Apple, not Warren.

If "breaking up Apple" in this context turns out to mean "make Apple spin off a very small part of their business", there's no reason to suppose Warren would be unhappy.

It's reasonable to suppose that Warren is making the recommendation she's making for the reasons she states, rather than inventing a pretext for an underlying wish to break large companies into approximately equal sized parts.


>All the apps that Apple sells...

I imagine from the point of view of Elizabeth Warren the problem is all of the apps that Apple doesn't sell - a maps app the integrates as tightly as Apple Maps. A browser that doesn't use Safari as its backend. A messaging app that can read SMS and replace Messages.


> A messaging app that can read SMS and replace Messages.

Oh, dear! No! One of the best decisions Apple took (among many) from the beginning from the privacy angle was/is not allowing any apps to access SMS or call logs. The way it implemented OTP entry from SMS is also brilliant (though it doesn't work for some message formats).

We've seen this on Android over and over again. Most users don't understand app permissions well from the privacy angle, and will say yes to any request (we've known for a long time from usability studies that users will usually do whatever is easy to dismiss any dialog). If Apple gives access to SMS and call logs, then those will be abused by third party apps (like Facebook, Google and many others), just like it has been on Android.

Apple could instead do a lot more to restrict the information that apps can collect and improve its app permission model.

But it would be nice to allow default apps to be setup as a user likes and give users more freedom. That's something most users would vote for (if it could be achieved that way).


On the other hand, it is almost undoubtable that one of the reasons iMessage is so popular, is that it's the only messaging app that can integrate with SMS on the iPhone.

Apple then, in turn, uses the existing network effect of iMessage as a way to sell more iPhones. That doesn't seem like fair competition at all.


iMessage is popular, but that has less to do with anything Apple has done and more to do with how badly Google has failed with a messaging strategy. iMessage is popular because it works ok-enough, is the default, and is consistent. Would you really rather have the Android situation, where you need SMS and umpteen other third-party messaging apps, including whichever 3 google is pushing this month?

Personally? I really, really don't want to switch between two (or more) messaging apps depending on who I'm talking to.

I have an iPhone and live in the iMessage-friendly United States, so this works out well enough for me. If I lived in Europe where everyone used Whatsapp, the inability to change the default would be a big point of frustration with iOS.


>A messaging app that can read SMS and replace Messages...

And now we've hit on the essential flaw in Warren's "break them up!" soundbite based policy. Her ideas do NOTHING to address the real problem, a lack of data privacy. If you tell apple they have to let people make apps that can access things like sms, boom, all of the users lose control of that data. The App developer takes it, and now it can go anywhere. It'd actually be worse than what we have now.

Here's the really sad part about all of this:

A law to make the sharing of data between companies explicitly illegal is actually EASIER to implement than the whole "break 'em up!" strategy.

So you have to ask yourself, "Why won't they just make it illegal to share data?" And when you start brainstorming potential answers to that question, it can be a bit unsettling. It makes me think we need such a law even more.


That is a completely independent problem.

Moreover, the privacy issue isn't solved by prohibiting what applications can do, it's solved by giving the user control over them. If a flashlight app wants to access your SMS messages, you should be able to say "no" and still use it as a flashlight. But if an actual messaging app wants to do that for actual messaging purposes, you should still be able to say "yes" and use that app instead of Apple's.


Unfortunately, that also won't solve anything.

Let's say that I installed Telechat (fake chat app) and it asked for SMS, well yea, I'm going to approve it because it is a chat app.

Okay, how does that prevent Telechat from collecting my data and selling it?

I understand what you're trying to say but it is not solved by using app policies (controlling which piece of data they can access) because such policies does not prevent said apps from violating your privacy.

That isn't to say that such app policies shouldn't be a thing, it's a great tool and limits the potential damage but it has nothing to do with privacy.


> Unfortunately, that also won't solve anything.

It solves the flashlight app accessing your SMS messages.

> Let's say that I installed Telechat (fake chat app) and it asked for SMS, well yea, I'm going to approve it because it is a chat app.

But then that's a different problem. It's no longer the app having permissions it shouldn't, it's the user explicitly choosing to trust a malicious app.

The solution to that is to have a third party service to verify that apps aren't doing anything malicious. That is nominally what Apple does with the App Store, but there are two main problems with their implementation: (1) You can't choose someone else to trust to verify iOS apps for you, it has to be Apple and there is no alternative if they get it wrong or reject non-malicious apps because they don't want competition. (2) It's not enough to deny malicious apps from accessing SMS, they also need to allow non-malicious apps to do it. This would largely be solved by fixing (1) because then a provider that failed to do (2) would not have to be used.


Although I think Warren is wrong about the tech platforms, in the case of Apple she actually has a point!

The App Store is what’s preventing apps such as browsers not using WebView to be available. It is preventing competition on so many levels. The Mac App store less so, because the OS lets you install apps other ways.


Apple Music doesn't compete against other subscription based music streaming apps in the App Store?

To give one example.


Apple "sells" many apps in the store for free, preventing others from entering those niches.

The app store is more about gate keeping than revenue.

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.

Facebook should not have been allowed to acquire Instagram.

The law targeting monopoly is broken in the digital era.


The law is not broken, it's just that no one has bothered enforcing it in the last few decades.

One reason is that much of the mainstream economic discipline has pronounced that antitrust is "a jumble of economic irrationality and ignorance." to quote Alan Greenspan.

As an example of how views changes is a quote from the Sherman Antitrust Act of 1890:

> Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $10,000,000 if a corporation, or, if any other person, $350,000, or by imprisonment not exceeding three years, or by both said punishments, in the discretion of the court.

But today, the business mode of almost every startup is to monopolize some part of the trade or commerce, preferably all around the world. The announce it publicly without any concern about antitrust enforcement.


I'd like to see them work on a digital bill of rights. I'm not sure what such a thing would look like, but I hope it would enshrine privacy in a way that will stand the test of time. It would benefit the individual citizen though, so it is probably damn near impossible to do at this point.

>Legislation about our rights to digital privacy and related issues are...

This!

A thousand times this!

What good does it do to break these companies up if they can all share my data with each other freely in any case?

And if we make the sharing of data EXPLICITLY illegal with harsh repercussions, a la HIPAA, then I don't really need for them to be broken up.

It's just sound bite politics that will land we the people in the same place we started. Probably a worse place, because we will have split up what was a 9mm data privacy bullet into what would effectively be a shotgun blast.


The Apple phantom monopoly came up several times already on HN. Here is my best guess of a cause, seen from over here in Europe:

I get the impression that in the US, ~everybody who can afford it chooses iPhones, so rich educated liberal types on some emotional level don't realize that "iPhone" is just one product in the smartphone market, which is plenty diverse enough.


Legislation about rights and digital privacy are also not answers, because they will be promptly ignored or subverted to the point of uselessness.

Governments allow you to be violated, at the request of the wealthy and currently-powerful. Appealing to governments to solve this issue will not work.


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.


Any large US organization that does international business has adopted a GDPR-everywhere model because supporting different processes by GEO becomes a nightmare (effectively impossible). It only takes treating one visting EU citizen wrong in the US to create a legal disaster.

The difference is Americans can't sue, but they're already benifiting from corporate processes pounding every square process into a round hole (for better and worse).


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.


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.

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.

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.


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.

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

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.

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..


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?


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... ). 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/


    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.

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” ;)


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

Let's revisit this in 10 years ;)


What I mean by "tech is not banking": Investment banking was playing with the money of their retail bank division. In some crazy years, you could have an unsupervised trader leveraging at 95% with money from the retail division. In that case, it was normal that politicians had to break the retail and investment.

Tech is not banking, even in 2019. The banking system is a lot more sophisticated and convoluted and complicated than what modern tech companies and their engineers are willing to deal with.

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?


> 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.


> 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"


I don't think it matters, and I don't think it's a proposal that will actually be acted upon. It's just an attempt to get attention for an election she has virtually no chance of winning and posture as being the most progressive candidate.

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?)


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

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.

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

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

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).

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.

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.

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.

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


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.

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.

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.

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.

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.

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.


> 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.


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.


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.


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.



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