Monopolies are not illegal. It’s leveraging the monopoly to exert force on adjacent markets that is. In the case here googles foul play is making side deals for preferential treatment against other app stores given their control over the handset operating system. Apple doesn’t offer an App Store market and never has nor ever represented otherwise, the app store is and always has been part of the operating system. This isn’t true for Google. Maybe for you and I this is splitting hairs, but splitting hairs is 99% of the law.
Blocking all other means of distributing apps in a reasonable way absolutely should have been enough to get Apple sanctioned. Blocking alternatives with economic incentives is now forbidden, but blocking the access using code is allowed. This is stupid.
But sure, jury trial. And also US judges in this area are especially broken, with their warped understanding of when a monopoly is harmful.
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Of course the other part of this is stupid as well. It should be illegal to have a monopoly, and it's the job of the government to break monopolies to enable competition. The US has it completely backwards here, and this is a big reason why that country is failing in key areas of economic development and infrastructure.
The US actually had it right when the antitrust laws were written. The Libertarian Party and Austrian Economists fucked it up for the rest of us by convincing everyone that "no, actually, antitrust is just about prices and consumer welfare, not control". This interpretation was ahistorical and illiberal, but it became history regardless, like to the point where Originalism as applied to antitrust law is derided as "hipster antitrust".
America's failings in economic development and infrastructure are not strictly caused by monopolization of the economy. South Korea's economy is run by like three chaebols[0] but they have working infrastructure. The problem with America is that we have a government that doesn't like to spend money, plus a group of illiberal, antidemocratic NIMBYs who make budgeting impossible by jacking up the cost of projects after they've already been estimated and committed to.
Since I already shat on the Libertarian Party, let me shit on the Democratic Party next. California and New York have legal climates that are unusually hospitable to NIMBYism. They figured out how to weaponize environmental review laws, to the point where actual reports about environmental infrastructure necessary for mitigating or surviving climate change say that we can't build the infrastructure because it'll get tied down in NIMBY red tape. In California this manifests as delays, cancellations, and massive wind farms in Wyoming; in New York it's cost overruns as bribes are paid to whoever can look the other way to get things passed through. Either way we can't build shit in our most populated states.
If there's a root cause for all of this, it's "vetocracy". In a democracy, when a decision is made, the people on the losing end of this decision agree to lose. However, since at least the 1970s, there has been several parallel movements to roll back decisions already made and form new mechanisms to prevent new decisions from being implemented. Antitrust was a rollback, NIMBYism was a new mechanism, but in either case, we're being dragged out of our brief experiment with liberal democracy by people who stand to gain from it.
>> we're being dragged out of our brief experiment with liberal democracy by people who stand to gain from it.
There's a name for that condition: corruption
It is a societal disease that is vicious and hard to get rid of. It makes bad situations worse even when everyone says that they agree on a solution and want to make it happen.
Antitrust laws are one way to prevent and maybe even remove corruption, but they only work if the people writing the laws and enforcing the laws are not corrupt.
> The Libertarian Party and Austrian Economists fucked it up for the rest of us by convincing everyone that "no, actually, antitrust is just about prices and consumer welfare, not control".
This is not really what the courts said (and to my knowledge the people who said it weren't members of the Libertarian Party or Austrian Economists).
The actual quote from the Supreme Court is, "It is competition, not competitors, which the Act protects."
The idea here is that, for example, if Walmart can undercut you on price and you go out of business, that's harm to competitors but not competition, because Walmart is only able to do that by offering the same product for a lower price. They can only do it by competing, and only for as long as they continue to outcompete the alternatives. As soon as they tried to raise prices or reduce quality, competitors could spring up to take the market from them.
That isn't what Apple is doing. If you want to offer an app store for iOS that only takes a 5% cut, Apple will actively interfere with you -- and then they take a larger cut despite the existence of prospective competitors willing to take less. That's not consumers choosing the incumbent because they're the most competitive, it's the incumbent preventing consumers from having a choice. It's harm to competition.
> They can only do it by competing, and only for as long as they continue to outcompete the alternatives. As soon as they tried to raise prices or reduce quality, competitors could spring up to take the market from them.
But once four or five different competitors have tried, had Walmart drop prices again to undercut them, and gone out of business, no one else is going to try because they'll know they're doomed to fail.
Competitors are required in order to have competition. The Chicago School interpretation of antitrust is as intellectually bankrupt as it is morally.
> But once four or five different competitors have tried, had Walmart drop prices again to undercut them, and gone out of business, no one else is going to try because they'll know they're doomed to fail.
Suppose Walmart has the lowest price for batteries. The local hardware store goes out of business. Now Walmart doubles the price of batteries.
The local grocery store is going to start selling batteries. Walmart has to lower their price again or people will buy them there instead. If they do, the grocery store will still eventually sell their stock to customers who value convenience over the lowest possible price. They may not restock them unless Walmart raises the price again, but as soon as they do, batteries are back at the grocery store.
If Walmart never raises their prices the grocery store may never start carrying batteries, but then Walmart can never raise their prices.
If you define a market small enough literally everyone is a monopoly and preventing competition. Apple has competition from other Android manufacturers. This is like complaining that Walmart has a monopoly on who can put shelves up in their stores. If Apple and/or Google were preventing other Smartphone OSs from getting developed or used, by abusing a monopoly position, then this could be considered a monopoly. But that is not what these cases are about. It's almost literally the shelves in walmart example
The way you define the market is by considering whether there are viable substitutes.
For example, two parking garages across the street from each other are strong substitutes. You can easily pick either one based on e.g. which has the best price. But a parking garage in New York and a parking garage in Boston aren't in the same market, because you can't reasonably park your car in New York and get out and walk to your destination in Boston.
You can easily have viable substitutes for app distribution on any given platform. Windows has a first party store but you can also install apps with Steam or download them from the developer's website. The Windows store and Steam are in the same market, so neither of them has a monopoly on distributing Windows apps. The same as two parking garages across the street from each other, or a Walmart and Target in the same mall.
If the operating system prevents competing app distribution methods, there is no longer any viable substitute for the official one. This is what the OEM wanted, right? No competition for their app store -- no substitutes, a monopoly. But then that's just what it is. You don't have to monopolize markets ancillary to your primary one, but if you do, you have.
I would say that Android is a viable substitute for Apple and vice versa when it comes to phones though. So I think there actually is a viable substitute. Customers can absolutely choose the one they want. But again if you redefine the market to Apps you can install on IOS then certainly that's a monopoly. I just question if that's a reasonable way to define the market.
> I would say that Android is a viable substitute for Apple and vice versa when it comes to phones though. So I think there actually is a viable substitute.
We're talking about the market for app stores, not the market for phones.
> But again if you redefine the market to Apps you can install on IOS then certainly that's a monopoly. I just question if that's a reasonable way to define the market.
But why? You haven't provided any reasoning.
Apple's store and Google Play aren't in the same market because they aren't substitutes -- you can only use one or the other depending on which type of device you want to install the app on. That isn't a law of nature -- Apple could offer Android apps in their store and stop preventing Google Play from distributing iOS apps. But they don't, and because of that they're not in the same market.
Just to defend the libertarians briefly, no legal bullying tactics means trusts have a significantly harder time forming and maintaining their monopolies.
> Blocking alternatives with economic incentives is now forbidden, but blocking the access using code is allowed. This is stupid.
I don't think that's stupid. Blocking access using code is an honest act. Everyone knows the rules and can build their business accordingly. Blocking alternatives with economic incentives is manipulative. It gives the impression that the platform is open to competition, when it isn't.
> Apple doesn’t offer an App Store market and never has nor ever represented otherwise, the app store is and always has been part of the operating system.
"Apple doesn't offer an App Store market" is just assuming the conclusion. Nobody expects you to get competing app stores from Apple -- you get them from Apple's competitors. What Apple ought to be in trouble for is interfering with their operating system customers' ability to patronize competing app stores.
> This isn’t illegal. Equivalent to a “No outside food and drink” sign or not letting randos sell things in your own storefront
In that case, someone else owns the storefront. I own my phone, not Apple.
If Apple would like to claim that I merely lease my phone, they need to update all their marketing so it isn't misleading. They should also be on the hook for repairs (without AppleCare), and all the other responsibilities that typically accompany a leased product.
> Equivalent to a “No outside food and drink” sign or not letting randos sell things in your own storefront
Your phone isn't Apple's storefront. Their storefront is. Prohibiting their customers from patronizing any other store is clearly anti-competitive.
> It’s not illegal just because you don’t agree with the philosophy of a closed ecosystem
It's not legal just because you agree with the philosophy of a closed ecosystem. "A closed ecosystem" is inherently anti-competitive and should be illegal.
> Equivalent to a “No outside food and drink” sign
Really?
When you buy food from the grocery store, the grocery store goes to your home and physically prevents you from also eating food from a different store at the same time, in your own home?
When people buy a phone, they own it. They are using it in their own home.
No, a grocery store does not force you to only eat food from them, in your own home.
They do not prevent you from mixing milk from their store with cookies from a different store.
What does thad mean "part of the OS"? It is not built into the kernel, and is therefore no part of the OS. I do not see why the same would not apply to Apple.
But maybe the US legal system is just totally broken ...
