It's interesting that when they say "the people" they really mean "other big corps".
That is what is happening here. The FTC and DOJ are going to bat for some of the worst scammers out there. Match.com / Zynga / Fornite etc with their scam subscriptions, lootboxes and more.
Apple gatekeeps these scammers (who have free reign on the internet at large) and they flip out. And then, of all the scams online, DOJ to the rescue.
It's a 30% cut for Apple; for a price of x, the underlying cost, excluding the cut, is 0.7 * x. But you're paying x, which is 100% - x / (0.7 * x) more, or 42.8%.
If that 30% take goes away, you think prices will come down by 30%? Or do you think companies will get 30% more profit?
Software and other similar goods occupy an interesting space. They obviously take time, effort, and other resources to produce. People should be compensated for that. And people who want to enjoy what's been created should be the ones to compensate for that enjoyment, i.e. if I watch a movie, I should pay to watch that movie in some manner. If I use software, I should pay to use that software.
Subscription models, purchase of physical media, etc. are all valid options and each has their place.
However, and here's the point, there comes a point where you've collected enough compensation to cover the cost of producing that item. Everything after that is pure profit. And if you're selling at pure profit, the only reason you're looking to avoid that 30% is to claim it yourself. Because you could just give away the product at this point.
And if you want to bring in overhead into this, Apple has overhead as well. And they do deserve to be compensated for what they bring to the table.
"You're overpaying by 30%" feels like an argument the competing large corporations want to convince people of as to have the populace on their side. When the reality is that, if that 30% goes away, their profit just increases by 30%.
This depends on the product. Some of them will have strong competition and therefore a direct relationship between costs and prices, so if you lower costs (fees), you lower prices.
Others won't lower prices because their customers aren't as price sensitive. But then they get more revenue, which causes more competitors to enter the market, which, if it doesn't push down prices, increases quality and choice.
Whereas if the money goes to Apple, they add it to their undifferentiated enterprise-wide cash mountain and the customer sees no discernible benefit of any kind.
> And if you want to bring in overhead into this, Apple has overhead as well.
We know what the overhead of processing payments and hosting apps is. It's not 30%. That's a monopoly rent.
In the land of hypotheticals it may work like that.
But in reality, once a customer is used to paying a price, and is willing to pay a price, prices don't decrease.
And we already have a metric ton of Clash clones, To Do lists, and whatevers. The amount of choice on the platform is already pretty large.
And once again, if people are paying for the item already, what incentive is there to dump more money into the product? No, you capture that as more profit.
As to "it's not 30%". It's not for a single app. But Apple works at a large scale. They have to host even the apps that are pure costs for them. There aren't many companies that operate at that scale. And of them: Valve takes 30%, Sony takes 30%, Microsoft took 30%, Google took 30%. Google and Microsoft are only now looking to reduce their percentage.
And while it's probably not 30%, it's definitely not 0%.
> Instead of monetizing users by selling their data (facebook / google etc) they simple charge high actual fees.
The amount of money companies get from selling data is equivalent to low fees. Like low enough that the main reason it's advertising is that collecting amounts of money that low end up dominated by processing fees and cognitive friction.
> The idea that apple is a monopoly is laughable if you like at any historic definition of a monopoly.
Have you actually looked at any historic definition of a market power? "Market with only two players" meets pretty much all of them, to say nothing of the fact that the market for iOS and Android apps are different because they have almost entirely non-overlapping sets of customers.
The existence of geographic monopolies is not controversial, but customers can cross the border to buy from a competitor - the barrier that prevents competition is the cost of travel.
So why is it hard to understand that cost of leaving the Apple ecosystem creates a barrier that effectively makes the Apple App Store a monopoly for the distribution of iOS apps?
The existence of alternatives on another platform doesn't help customers who can't afford the costs of switching or (worse) owning multiple platforms.
I'd argue that anyone who's trying to dictate what you are and aren't allowed to install on a device you bought with your own money is the scammer in that situation. If Apple thinks those aforementioned parties are running predatory pricing schemes, then they're welcome to take any number of actions to discourage people from using those apps; the App Store could show a big orange "lootbox" banner at the top of each offending app, show a modal when you subscribe to an app that warns you about recurring payments, or create an individual review section for the value-add of any IAPs.
But that's not why they removed any of those apps. They kicked them to the curb because their developers thought paying a 30% tax for a payment processor they didn't need was silly, and Apple refused to serve their content unless they kowtowed to their rent collection. You're either misremembering things or creating justifications that don't align with the reality of the situation. Apple is trying to play the side of the public distributor of software and the private denier of apps at the same time. These attempts to keep the Cathedral and the Bazaar under one roof rarely work out though, and I don't really know what they're expecting if they think that our government is just going to turn a blind eye to a distribution monopoly like that, especially if Apple continues to charge developers for it.
Apple throws a LOT of weight around that users would NEVER be able to force.
They've forced no tracking. No individual user could EVER hope to achieve that. Facebook et al track everywhere else. This made the big player mad. Here comes DOJ to crack down on this "abuse".
They force easy subscription cancellations, and remind users on app delete to cancel subs.
They control app refunds on scam apps (I've had this once, refund was quick).
They are forcing apps to allow for truly private signups (apple ID based).
Apple's business model is to create a walled garden that appeals to users tired of the DOJ's and FTC failed efforts on the internet at large. Yes, they charge rent ON THE BUSINESSES that want to play in this garden. Because of the high user trust user spend in this garden is HUGE compared to other platforms.
DOJ / FTC could take action on anything online where rampant scams (tech support) and frauds go totally unchecked. No action by DOJ/FTC. Seriously, your grandma will get bogus tech support help, they will loot her account, and you will not even get a call back. Tellingly, DOJ/FTC focus on Apple, a company with FAR higher customer approval than almost any of there folks DOJ is carrying water for (scam shopping comparison sites, scam recurring memberships / subscriptions etc).
The idea that apple are "scammers" goes to show how warped the values are of the folks on the internet at large, including developers who consistently enable the many dark patterns. My elderly parents WILL NOT buy anything non apple.
When they have a problem with their device, they get legit support (not always free) from apple. Meanwhile, the list of crap behavior by every OTHER player online is crazy, from the "free" email providers (who spam and scam their way with toolbars and add-ins) to all the rest. Seriously, if they were to actually trust DOJ/FTC to keep the net clean, and signed up for another free online service (with the required toolbars etc) they'd be in for another round of crazy pop-ups and pain.
> Apple throws a LOT of weight around that users would NEVER be able to force.
More accurate to say that the people they're pressuring couldn't be pressured by users because they are themselves network effect-based monopolies.
Given a choice between two "Facebook providers," one that does tracking and another that doesn't, nobody would pick the first one when they're otherwise identical. But everybody does when it's the one everybody else is already using and they can't talk to each other.
It's the same thing with payment processors. There should be a standard for payment processing and then the buyer gets to choose which payment processor to use of any that implement the standard. If they can choose one that makes cancellations easy, why wouldn't they?
We don't need Apple to be doing the things antitrust ought to be doing. Antitrust ought to be doing it.
The reality is we do, because on the web at large the scams are nonstop.
Seriously try to unsubscribe from something. 80% of the time you have to call / reach out to someone (for no reason).
Or subscriptions auto-renew PRIOR to payment or notice, and commits for another year (looking at you anydesk and friends). And you can't cancel in advance but have to cancel only in a window 90 days before expiration.
If you follow the lawsuits, half the folks in the alliance against apple have been sued for just horrible practices.
All the govt seems apple to do is force absolutely insane popups EVERYWHERE that seem to do nothing to stop scams.
You're describing the effects of bad laws and a lack of competition in the payment processing industry.
Here's how it should work: You go to a website and give them your payment info. They initiate a payment request. If this is the first time you've ever paid them, you have 30 days to deny payments to that merchant. They don't get paid until then unless you manually approve them sooner.
Then they can make future payment requests and get paid immediately until you revoke them. Subscription scammers get revoked, bye bye subscription scammers.
But we don't have working standards for payment processing (a regulatory failure) so we don't have competition and payment services don't offer this feature. Then you want Apple to do it at the cost of 30%, centralization, censorship and other costs we ought not to be paying if we fixed the underlying problems.
The DOJ and FTC which enforce "fair trade practices" have not focused on many obvious fair trade violations and crimes. Instead, their resources are directed at Apple for "crimes", not because Apple is where everyone is getting scammed, but because Apple is where folks are running to because of the failures of the DOJ and FTC.
So how about they fix their issues (and the rest of the web) before going after apple?
How about we do both, in which case we still want to do this one?
People aren't running to Apple for this. Apple is using its market power to throw people a bone in the hope that it will make an excuse for all the other bad they do.
Apple has search ads on the app store that can target demographic information about their users. Where do you think Apple sources that information from? It's the same crap Google does where they collect data but don't share it with other companies. The only difference is Apple hides their probably-anti-trust-worthy user tracking shenanigans behind feel good user measures that block the same tracking for competitors.
I don't use apple app store ads, this is a relatively tiny exposure in the Apple ecosystem.
I just compare this to for example buying the FTC and DOJ approved Vizio TV, which will both monitor what you watch, sell that to third parties, and start popping up ads on the device you bought. Yes, a clickthrough policy gives them the OK to do this, but my trust in them and FTC/DOJ is low.
Apple ads as far as I can tell does not do the data broker buy / sell, and you can usually turn this stuff off / on here:
Settings > Privacy > Apple Advertising
If you want you can easily see the segments you fall into.
I know you claim this is the same thing Facebook provides. I doubt it personally.
Let's see what side of the argument Apple lands on when real user data protections are enacted with stiff penalties. Otherwise their entire schtick is "do as I say not as I do". They have the money and political connections to push real change through, they just profit too much by being the sole data broker on iOS (see Google paying them for preferential treatment).
Because they actually CHARGE for their services, including a 30% cut of sales on app store, they don't need to sell you out. So data protection is much less a threat to them then it is to google / facebook et al.
The weird thing is folks on HN have a hard-on for destroying Apple, when we know that if regulators ACTUALLY cracked down on a real abuse (Vizio selling your viewing) Apple would be unphased (they probably don't sell any data to third parties) as their ad revenue is a fraction of their overall massive revenue from actual sales.
> Because they actually CHARGE for their services, including a 30% cut of sales on app store, they don't need to sell you out.
It also means they can do both and reap double the profits. Like how they use their position as the exclusive distributor of apps to sell targeted ads to people on the App Store.
> The weird thing is folks on HN have a hard-on for destroying Apple
The weirder thing is how many folks on HN have a hard-on for defending Apple, despite the fact that they're pretty much the largest company in the world, full-stop. If they're not deserving of criticism for having hundreds of billions of dollars in liquid cash and hundreds of unsolved problems, I fail to see how the plight of Vizio or Zynga really matters by comparison.
Apple's app store monopoly has serious effects on small businesses through their 30% cut of all profits. End users also suffer higher prices because of this "Apple tax".
Also, if you own an iPhone, you should be able to install whatever software you want to on the device, full stop. The idea that there is an unavoidable, artificially imposed chokepoint that software MUST funnel through is ridiculous.
Apple does not gatekeep the entities you are referencing out of a sense of social responsibility, they do it because of greed.
The claim that apple is a monopoly is a bad joke based on any standard measure of a monopoly. My trash service is a monopoly, apple is not.
Apple charges high fees instead of monetizing in other ways. Don't like it, go elsewhere.
That artificial choke point (and the corresponding consumer effects) are what has DRAWN folks to Apple. Apps could slurp up your contacts on Android forever. Going through the Apple "chokepoint" that was a no go - the OS throws a prompt up you would have to approve, and the need for that sharing gets looked at.
Don't like it? No one is forcing anyone to buy apple, they have a relatively small market share. For those who value all this, they can (and it turns out folks with money DO value this because they don't want the hassles they get with others").
And yes, Apple has blocked carriers from pre-installing their bloatware and crapware. Again, if you want that, go get it somewhere else.
A government rule that says anyone with market power can't have censorship power isn't so much picking winners and losers as preventing someone else from doing it.
And it isn't preventing useful filtering, because someone without market power can do it.
There are maybe better ways to fix this. Like get rid of DMCA 1201 and the other laws that cause tech markets to consolidate like this to begin with. But given the choice between this or nothing, this.
Apple frequently censors apps in their App Store at the behest of authoritarian governments. These types of actions impede peoples ability to express themselves freely, and is incredibly destructive to channels of political organizing.
Apple has censored Tibetans & religious groups in China and LGBTQ+ content on a staggering scale globally. Local laws may require this, but being a censorship chokepoint is Apple’s choice, a choice made for profit that destroys lives.
Unpopular opinion- I don't want 'the people' to be 'in control of tech', or really anyone else's private property. That's just populism, and populism is usually bad. I would like to see more antitrust enforcement (actually I think some of the examples outside of tech are more egregious), and I would like to see dispassionate, highly educated professional civil servants & judges make calls around excessive market concentration based on objective, transparent criteria. This is kind of the key concept that separates a developing country from a 1st world one- do you have a highly professionalized bureaucracy & judiciary working off of technocratic criteria, or are 'the people' (aka local demagogue) just deciding which companies are in favor this month?
Like, the arrangement we have now with the Federal Reserve & interest rates is good. Highly educated, objective technocrats who are deliberately insulated from voters make good-faith calls. Meanwhile in every developing country, 'the people' (aka the local strongman) decides what he wants the interest rates to be based on whim.
TLDR- antitrust based on objective rule by experts good, antitrust based on populism/demagoguery/'the people' (whatever that means), probably bad. I hate this leftist framing that just adds 'the people' to every decision in society
I don't disagree with you that antitrust is nuanced and complicated and we should have smart, dedicated professionals handling the day-to-day enforcement.
But the dominant position for decades on antitrust, from academics, judges, and bureaucrats -- regardless of party -- has been that antitrust is not a big deal, and they've rubber-stamped a massive consolidation of American enterprise across vast swaths of the economy.
It's not out-of-place for 'we the people' to express that something's wrong here. Farmers can feel it when John Deere prohibits them from repairing their own tractors, and there's not a good alternative they can buy. Homeowners can feel it when the price of 2 by 4s spikes because a few companies run all the sawmills and would rather charge higher prices than increase capacity to meet demand. Flyers feel it when all the major airlines decide to charge extra for checked bags within a few months of each other. Everyone feels it when they see how wealth is more concentrated at the top and how it feels harder for the average young person to have the same standard of living as their parents and grandparents.
It's also not complicated to understand the root of the issue. That companies with monopoly power will charge more and produce less is a bedrock of economics taught in high school. It's also well understood that an industry dominated by a small number of firms will act somewhat like a monopoly because there's less competitive pressure.
So yes, it's better to have experts enforce antitrust. But it's also incumbent upon "the people" to demand accountability and reform when the status quo is failing them.
You're conflating a bunch of different phenomena together there (right to repair has no particular connection to monopoly, that's a non-sequitur). You're calling everything you don't like 'monopoly'. Also, if we want cheaper 2x4s, I think lowering our tariffs on foreign and in particular Canadian lumber might be a better start. US timber is a highly protected industry!
I don't see that 'the people' are demanding the things that you're rhetorically arguing against, based on the evidence of actual US elections. Worth noting that all of the alleged tech 'monopolies' have very high public approval in most surveys- Amazon is consistently the highest rated! This is a big chunk of the problem with basing everything off 'the people'- they are fickle, with a shallow understanding of policy and a very short attention span.
If 'the people' really want more antitrust, they should consistently vote for politicians who run on a platform advocating that. A quick look at US electoral history suggests their alleged antitrust desires are not very strong?
People have such short memories. It wasn't so long ago that mainframes were rented at exorbitant prices and all the users connected through dumb terminals so they could run bottom of the barrel user-hostile software (which was often also rented). Now it's called "cloud computing", and you connect through a similarly dumbed down device that fits in your pocket and spies on you.
From the text of the American Choice and Innovation Online Act:
COVERED PLATFORM.—The term “covered platform” means an online platform—
(A) that has been designated as a “covered platform” under section 2(d); or
(B) that—
(i) at the time of the Commission’s or the Department of Justice’s designation under section 2(d), or any of the twelve months preceding that time, or in any of the 12 months preceding the filing of a complaint for an alleged violation of this Act—
(I) has at least 50,000,000 United States-based monthly active users on the online platform; or
(II) has at least 100,000 United States-based monthly active business users on the platform;
(ii) is owned or controlled by a person with net annual sales, or a market capitalization greater than $600,000,000,000, adjusted for inflation on the basis of the Consumer Price Index, at the time of the Commission’s or the Department of Justice’s designation under section 2(d) or any of the two years preceding that time, or at any time in the 2 years preceding the filing of a complaint for an alleged violation of this Act; and
(iii) is a critical trading partner for the sale or provision of any product or service offered on or directly related to the online platform.
--------------------
I like almost all of the provisions specified in this bill, but these "covered platform" conditions are totally absurd and in my view make this bill fatally flawed. These laws should apply to everyone, otherwise they simply incentivize the very behavior the bill is penalizing for every other company in the market. This is because exploiting the targeted behaviors will create a massive competitive advantage next to the handful of larger players that cannot engage in them.
Further, metrics like MAUs are arbitrarily defined and arbitrarily measured even without getting into the question of bots, shared accounts, and users with multiple accounts.
Finally, the idea that the legality of a business strategy should be determined by how much an owner of the company is worth is ridiculous on its face; if a practice is deemed illegal it shouldn't be excepted just because the owner of the businesses loses some net worth. The Open App Markets Act also has a similar provision for 50 million users. Why? Stop trying to carve out special cases for particular businesses, this is a fragile and disingenuous approach to legislation.
> This is because exploiting the targeted behaviors will create a massive competitive advantage next to the handful of larger players that cannot engage in them.
But then they'd either get large enough to have the rules apply, or there would be a large number of smaller players competing with each other -- which is also pretty great.
> Finally, the idea that the legality of a business strategy should be determined by how much an owner of the company is worth is ridiculous on its face
Corporations are "people." That's there to prevent companies from pretending their operations don't meet the total by using subsidiaries.
If you broke Comcast up into smaller companies, I don't think you'd suddenly have multiple different companies competing to dig ditches and lay fiber in each tiny town across America. You'd have Comcast North, Comcast West, Comcast South, and Comcast East, and the situation is literally still the exact same except that the owners of Comcast become a little richer due to the conglomerate discount.
There's a good argument that cable/internet providers are a "natural monopoly" in which case governmental ownership, or strict regulation is warranted. I.e. make them utilities.
The physical last mile cable is a natural monopoly. Internet service, i.e. connectivity to the rest of the world, isn't. So it makes sense to separate them.
Some countries have local loop unbundling or similar and it works pretty well.
Well, there are two specific bills on the table that address big tech, and this campaign is coming from a group with an Internet-focused mission. Recognizing we have a big tech problem doesn't mean we become blind to problems elsewhere.
Big tech is a lightning rod for more than culture war conservatives, the whole liberal establishment blamed tech for getting Trump elected b/c they didn't do enough to combat "misinformation".
Luckily this has now been fixed by Fact Checkers (tm), who are able to remain impartial and free of bias to prevent the proliferation of misinformation online.
I think both the bills "The Open App Markets Act" and "The American Innovation and Choice Online Act" are amazing but I don't expect them to get anywhere in the US because of how much collusion tech companies and US politicians have... but I don't understand why other jurisductions like India, China, EU etc. haven't enforced something like these, just from security perspective if not anything else.
I am writing to express my concerns with the tech industry, and to urge you to vote for the Open App Markets Act and American Innovation and Choice Act.
I am a software engineer at a Silicon Valley startup company, and a lifelong member of Silicon Valley startup culture. Nearly every job I have ever had has been at some type of startup, and have worked on projects in health care, renewable energy, and artificial intelligence. I am no crank or Luddite.
Over my life I have watched Silicon Valley become less and less about genuine innovation and more about cynical plays for money and power, with the aesthetics of innovation providing a fig leaf - carpet baggers in black turtle necks. For many, the goal is no longer to create winning products that create new industries. The goal is to lure people and businesses into walled gardens, and to trap them there.
We see this in the rise of so-called Platform Capitalism. Platform Capitalism is a threat to consumer choice and freedom, and a threat to small businesses; it is a new form of monopolizing tactic. Under the guise of creating a space for innovation and competition, individual users and businesses alike are lured on to the platform, where they are subject to all manner of abuses.
App stores charge exorbitant rates (as much as 30%) to process transactions; many feel credit card transaction fees are too rich at 1 to 3%.
These companies often compete on their own platforms, creating stupefying conflicts of interest. Amazon is particularly egregious, illegally using market data to select their Amazon Basics products. This is a betrayal of the small business owners who entrusted Amazon with their livelihood.
I once again urge you to vote for the Open App Markets Act and American Innovation and Choice Act.
That is what is happening here. The FTC and DOJ are going to bat for some of the worst scammers out there. Match.com / Zynga / Fornite etc with their scam subscriptions, lootboxes and more.
Apple gatekeeps these scammers (who have free reign on the internet at large) and they flip out. And then, of all the scams online, DOJ to the rescue.