You don't need to have a monopoly to engage in anti-competitive behavior. Of course it makes it easier, but it isn't required. Consider obvious examples like dumping or tying.
I'm not an expert, but I believe one benchmark the EU uses in competition law is a "dominant position" which from memory can exist at > ~40% market share.
Clearly Apple has a dominant position in online music sales, so it is likely that they could be subject to oversight at least as far as music goes. As they have built all of their other services into their music store (still literally, iTunes) it seems possible to me that review might extend further into the iTunes ecosystem.
Given that by all appearances they have just lost Symbian despite efforts to promote an EU produced competitor in the smartphone market they are probably watching it all quite closely.
It isn't clear to me that you can discount any action here even if traditional benchmarks aren't being met. Technological rate of change may be out pacing traditional regulatory adaptations.
Computing platforms are becoming intimately involved in everything we do. It isn't much of a stretch to imagine a world where one device wakes you up, gets you to work, pays for your lunch, opens your locks, handles all communications, proves your identity, and saves all your mementos.
It seems unlikely to me that Euro or US regulators will want to let a mobile computing platform become so vertically integrated that it controls all content, payments and communications arbitrarily with the only remedy being switching to a competing totally integrated platform.
> You don't need to have a monopoly to engage in anti-competitive behavior.
"Anti-competitive" behaviour is a much broader brush than antitrust, which has a reasonably specific meaning. Antitrust--in the US at least--relates to the Sherman Act [1] and the Clayton Antitrust Act [2].
Example applications:
> - price discrimination between different purchasers, if such discrimination tends to create a monopoly
> - exclusive dealing agreements
> - tying arrangements
> - mergers and acquisitions that substantially reduce market competition.
While such things are always open to interpretation by courts, it's important to consider their historical application [3]. Standard Oil and AT&T aren't anywhere in the same league as Apple.
It's worth noting that the intent of antitrust law and enforcement is to protect competition itself. AT&T is a good example because the barrier to entry for creating a telecommunications company was (and still is) so high.
Of course the solution was ludicrous and one that the US seems to have not learned its lessons about yet: it swapped one large monopoly for 7 regional monopolies. But I digress...
The Microsoft case is often brought up. It was a controversial case. At the time it virtually wasn't possible to have a (useful) PC (which accounted for >95% of the computer market at the time) without Windows. What's more, the nascent Web posed a strategic threat to Microsoft, one it sought to subvert by giving away IE for free and making it non-standards-compliant in an effort to tie users to IE and thus to Windows.
Now compare this to Apple. Apple holds no monopoly on phones. It doesn't require carriers to only sell its phones. Anyone content you sell choose to sell through the iTunes ecosystem you can sell elsewhere.
What people typically mean when they say "Apple should be investigated for antitrust" is "I really want an iPhone but I don't want one with Apple's restrictions so surely this should violate some kind of antitrust law right?"
No.
> Clearly Apple has a dominant position in online music sales
26.7% of music sales in 2010 [4]. Higher for online music sales I'm sure but is that a meaningful restriction? Antitrust isn't there to protect companies from competition. Any company can sell music. Amazon proves this. Apple doesn't require exclusivity.
The fact that to date any competition has been completely ineffective does not signal an antitrust violation in and of itself.
> Technological rate of change may be out pacing traditional regulatory adaptations.
There's no "may be" about it. And for this reason alone the DoJ will be reluctant to intervene (IMHO). For example, the Microsoft case was settled years after it had ceased to be relevant.
The market has a way of sorting these things out, at least as far as high-tech goes.
> It seems unlikely to me that Euro or US regulators will want to let a mobile computing platform become so vertically integrated that it controls all content, payments and communications arbitrarily with the only remedy being switching to a competing totally integrated platform.
No mobile platform has the sort of market share you're talking about to be relevant from an antitrust point of view.
I consider these vertical platforms to be a transitory problem and one that exists largely because the market is so new. These things will (IMHO) surprisingly quickly become commoditized.
It's for this same reason that I just don't really care about Facebook's apparent dominance of their space. Or at least I don't have the same sense of urgency about it that some seem to.
How is Apple's app store requirement not straight-forward tying under the plain language of 15USC§14?
The language there is:
"It shall be unlawful for any person engaged in commerce, in the course of such commerce, to lease or make a sale or contract for sale of goods, wares, merchandise, machinery, supplies, or other commodities, whether patented or unpatented, for use, consumption, or resale within the United States or any Territory thereof or the District of Columbia or any insular possession or other place under the jurisdiction of the United States, or fix a price charged therefor, or discount from, or rebate upon, such price, on the condition, agreement, or understanding that the lessee or purchaser thereof shall not use or deal in the goods, wares, merchandise, machinery, supplies, or other commodities of a competitor or competitors of the lessor or seller, where the effect of such lease, sale, or contract for sale or such condition, agreement, or understanding may be to substantially lessen competition or tend to create a monopoly in any line of commerce".
All the requirements under the plain language are there:
1) Apple is selling a commodity, access to the Apple App Store, to providers.
2) The commodity is used within the United States.
3) The sale will be on the condition or understanding that the app manufacturer does not purchase payment processing for the iPhone application from any competitors of Apple.
4) The condition may substantially lesson competition in a line of commerce, namely payment processing for iPhone applications, because most iPhone developers will be unable to use one of Apple's competitors.
It seems that Apple's behaviour is exactly what the Clayton Act anticipated and prohibited.
This applies to anything if you define your market tightly enough and "payment processing for iPhone applications" is about as tight a definition as you can get.
If you can define things that tightly how is it different to my going into a shop (for the sake of argument let's make it a shop which sells goods the owner makes and therefore can't be bought elsewhere) which only accepts cash and claiming that they're anti-competitive because they don't accept alternate payment mechanisms?
Unless the iPhone obtained a dominant position in the smartphone market choice exists - you can go elsewhere, as can developers and you can buy (and they can sell) apps from other places and pay or bill in other ways.
That's the market working and that's why anti-trust laws are unlikely to apply under the current circumstances - they're designed to ensure competition and smartphones is a market as competitive as pretty much any on the planet right now.
Except that "payment processing for iPhone applications" is a very artificial category. It seems the language would be more appropriate for a situation where, say, Apple was financially discouraging developers from porting their apps to Android; in this case, they're forcing developers to accept less money on their platform, which, if anything, encourages the competition.
Apple was financially discouraging developers from porting their apps to Android
This is an interesting statement because if you remove the word 'financially,' they have done that by disallowing development with cross-platform tools.
I'm sure somebody will try to sue, but I actually think that it opens a big hole for someone like Google to gain an edge. It's even possible that Google could put out a device that has far more content available than would be available on the i* because content providers won't want to play with Apple any more.
I'm not an expert, but I believe one benchmark the EU uses in competition law is a "dominant position" which from memory can exist at > ~40% market share.
Clearly Apple has a dominant position in online music sales, so it is likely that they could be subject to oversight at least as far as music goes. As they have built all of their other services into their music store (still literally, iTunes) it seems possible to me that review might extend further into the iTunes ecosystem.
Given that by all appearances they have just lost Symbian despite efforts to promote an EU produced competitor in the smartphone market they are probably watching it all quite closely.
It isn't clear to me that you can discount any action here even if traditional benchmarks aren't being met. Technological rate of change may be out pacing traditional regulatory adaptations.
Computing platforms are becoming intimately involved in everything we do. It isn't much of a stretch to imagine a world where one device wakes you up, gets you to work, pays for your lunch, opens your locks, handles all communications, proves your identity, and saves all your mementos.
It seems unlikely to me that Euro or US regulators will want to let a mobile computing platform become so vertically integrated that it controls all content, payments and communications arbitrarily with the only remedy being switching to a competing totally integrated platform.