Monopoly law needs to be reinterpreted in light of network effects.
It's not merely the integration which is a problem, it's how that + network effects gives apple undue market power to dictate terms to its users, devs, etc.
Being a middleman between users and devs, say, takes on a different character when you're a 2-3T biz at the heart of the economy.
Exactly. From my point of view, nobody needs to be a lawyer to see that this can't stand as it is. There are two major operating systems for each form factor. In the last ten years, no other vendor has been able to successfully place a new OS on the market. If there wasn't a monopoly (or duopoly or oligarchy or whatever you wanna call it), then this would have happened. And this appears mainly to be due to network effects and the high complexity of the underlying systems.
You don’t need to be a lawyer to see that there’s a duopoly, but duopolies aren’t illegal. The DOJ has to prove illegal conduct, which is harder than just showing a lack of widespread competition.
So if there are 3 competitors and one drops out, the other two are now guilty of something? In all my years studying economics and law, I never heard anyone suggest anything remotely this draconian.
Considering in the Google antitrust case it came out that the companies were working hand in glove for years, what were have is a duopoly where the participants collude. This is also the case in broadband where ISPs carved up neighborhoods between themselves to reduce competition.
So sure, duopoly of real competitors is one thing, but that’s rarely the case once players realize they can set prices and divide the spoils.
> Considering in the Google antitrust case it came out that the companies were working hand in glove for years, what were have is a duopoly where the participants collude.
But then, the problem is that you have a cartel, not a duopoly. That’s the thing: you can only punish companies for their actions. A duopoly is a fact, in itself it does not imply any particular behaviour from either company. If there is collusion, then it’s anti-competitive behaviour, abuse of their dominant positions in the market, etc. Things that are already illegal and should be enforced.
> This is also the case in broadband where ISPs carved up neighborhoods between themselves to reduce competition.
The reason there is only 1 broadband ISP is because people are not willing to pay sufficiently more for fiber to offset the costs to install fiber to the home, especially in places with buried utilities.
Therefore, the existing coaxial connection is the only economically viable option.
Also, it rarely makes sense for 1 home to have multiple physical infrastructure connections, so they lend themselves to natural monopolies. If a house has access to fiber, it makes no sense to spend resources to run another fiber to the house.
Which is also why ISPs should be utilities, but that is not comparable to personal devices.
> is because people are not willing to pay sufficiently more for fiber to offset the costs to install fiber to the home
Which might be the case if, through taxes, we hadn't collectively paid for a lot of that in the way of subsidies and grants to those ISPs to do exactly that, subsidies and grants which resulted in, generally, more dividends, bonuses and stock buybacks than they did miles of fiber being laid.
> So if there are 3 competitors and one drops out, the other two are now guilty of something?
Well, Microsoft eventually got all but forced to port Office and, for a time, Internet Explorer to macOS to evade getting sanctioned by the EU.
In a similar vein, if the market is not healthy any more, the duopolists may be forced by regulatory authorities to make life easier for potential startup competitors: open up file format specifications, port popular applications with network effects (iMessage, Facetime, Find My in the case of Apple) to other platforms or open up specifications to allow others access/federation.
> Well, Microsoft eventually got all but forced to port Office and, for a time, Internet Explorer to macOS to evade getting sanctioned by the EU.
I have seen some people assert this a few times in the last couple of weeks and I don’t know where this comes from. This is not at all what happened.
This was part of an agreement between Apple and Microsoft in 1997, long before any EU decision. Microsoft bought some Apple shares and agreed to support office on MacOS for a few years, and Apple made IE their default browser.
One can argue whether they did it to improve the optics in their (American) antitrust lawsuit (and there are several details that do not make sense if it were the case), but it certainly was not forced on them by any court.
Ugh, this entire thread will be a frustrating exercise in folks insisting their feel-feels are the law of the land because they hate Apple and that takes precedence over facts and reality.
> So if there are 2 competitors and one drops out, then it's hardcore illegal, but otherwise it's a-okay?
No, it is absolutely not. There is nothing illegal about having a monopoly in the US. The government even explicitly and purposefully creates and grants monopolies pretty often. Natural monopolies are not illegal. Abusing your government-granted or natural monopoly is the illegal behavior.
I'm curious to see how they even construe a duopoly as a monopoly under current law, because this will have some profound impacts to the entire economy if they succeed.
> Ugh, this entire thread will be a frustrating exercise in folks insisting their feel-feels are the law of the land because they hate Apple and that takes precedence over facts and reality.
Typing this on one of many Apple devices I own. I don't hate Apple. But, you're right, comments like yours make this a frustrating exercise indeed.
> No, it is absolutely not. There is nothing illegal about having a monopoly in the US.
Yes yes, it may technically not be illegal per se, but then again, it's a problem. I am not a lawyer and I don't care about the details of the law. That's for other people. I am looking at this from a perspective of a consumer who feels actively harmed by what the tech industry has become. And as a member of society who cares for other people. If one company accrues that much by making it hard for others to compete, then they will rightfully be forced to give back if they don't do it out of their own free will.
Your point is not based on laws though, you're just wishing the laws were different. Which is fine, but the process here should be to change the laws first instead of warping the current laws' definition to punish Apple first, collateral damage be damned.
>then it's hardcore illegal
You aren't a lawyer, you don't care about the laws as written, yet make false statements about what the law says according to how you feel anyways then back pedal when called out that it's not actually illegal. I think you've said everything you can.
> Monopoly law needs to be reinterpreted in light of network effects.
This is the context of this discussion. If you think dragging me into details of the current law will distract me, sorry, no it won't. This thread is not about that.
> yet make false statements about what the law says
Now you are making false statements. I didn't say that the law says that. What's more, you dragged that piece of a sentence out of its context to make it appear as if it wasn't part of a question. But it was. So it's not a statement. It's a question. Is it a false question, maybe? Sounds a bit laughable to me.
The term “HHI” means the Herfindahl–Hirschman Index, a commonly accepted measure of market concentration. The HHI is calculated by squaring the market share of each firm competing in the market and then summing the resulting numbers. For example, for a market consisting of four firms with shares of 30, 30, 20, and 20 percent, the HHI is 2,600 (302 + 302 + 202 + 202 = 2,600).
The HHI takes into account the relative size distribution of the firms in a market. It approaches zero when a market is occupied by a large number of firms of relatively equal size and reaches its maximum of 10,000 points when a market is controlled by a single firm. The HHI increases both as the number of firms in the market decreases and as the disparity in size between those firms increases.
The agencies generally consider markets in which the HHI is between 1,000 and 1,800 points to be moderately concentrated, and consider markets in which the HHI is in excess of 1,800 points to be highly concentrated. See U.S. Department of Justice & FTC, Merger Guidelines § 2.1 (2023). Transactions that increase the HHI by more than 100 points in highly concentrated markets are presumed likely to enhance market power under the Horizontal Merger Guidelines issued by the Department of Justice and the Federal Trade Commission. See id.
>In the last ten years, no other vendor has been able to successfully place a new OS on the market.
How much of this is because of evil monopoly forces, and how much of it is because users prefer iOS and Android? It's not like the mobile device market snapped into existence overnight, both Android and iOS beat out Blackberry and managed to fend off Microsoft.
Most of it was because of the channels. People buy a phone from their carrier. They don't buy from an OS manufacturer. They don't even buy from a phone manufacturer. They get a plan and it comes with a phone. Carriers only distribute phones from a few proven vendors, and that decision involves a lot of games of golf and karaoke nights on company tabs.
Turns out the phone cartel is the phone company cartel in a trench coat.
Before either iOS or Android existed, you could get phones running Windows CE from carriers. Why didn't that stick around? Especially since those primitive smartphones gave carriers a lot more control over their app stores.
> If there wasn't a monopoly (or duopoly or oligarchy or whatever you wanna call it), then this would have happened.
I...don't think that's sufficiently self-evident to stand on its own.
Fundamentally, it's hard to have a world with more than a very small number of operating systems for the major form factors of device—unless those operating systems are mandated to interoperate in significant ways.
Creating a new operating system for phones also requires some things that are not at all easy to get:
1) You need hardware. This means that either you're creating an OS for an existing hardware platform (in this case, Android or iOS) or you're building your own phones. Given the legal frameworks that existed over the past decade and a half (as distinct from the particular dominance of one platform or another), that basically means you're building your own phones. Some people have tried to do that, but it adds hugely to the up-front cost of getting an OS going.
2) You need to get a critical mass of people using it. Until and unless this happens, what you've created has to live or die based on the apps and services that you build for the phone. No one's going to dedicate their own time, effort, and money to creating software for a phone that only 10,000 people have ever bought.
Now, I can see a pretty strong argument for a new legal framework that would make #1 much easier—specifically, requiring all hardware platforms (possible "all hardware platforms over X sales") to provide a fully-open specification for third-party OS makers to use (with appropriate clauses about dogfooding the open API to prevent the hardware maker from just using a bunch of private APIs to preference their OS). This would allow people to create their own OS for the iPhone without Apple's interference.
But that's not what we've had since 2007, so your bold but unsupported statement that the lack of third choices for mobile OSes in and of itself proves that Apple is a monopoly (or at least that Apple/Google together make up an abusive duopoly) does not hold up to scrutiny.
Since market cap is a determinant in behavior (the speculative value of a secondary market) where's the case for forcing nVidia to open up CUDA or for Microsoft to let Nintendo open a store on the Xbox?
We need proactive antitrust laws that break up companies beyond a certain size criteria. There are many markets beyond the tech sector that need a breakup. But no, lets wait until there is enough outrage before the DoJ laggardly assembles a case against them.
It's not merely the integration which is a problem, it's how that + network effects gives apple undue market power to dictate terms to its users, devs, etc.
Being a middleman between users and devs, say, takes on a different character when you're a 2-3T biz at the heart of the economy.