You see something like this with gasoline pricing - major brands will have "competing" stations across the street from each other, but their prices moves in lock step without a race to the bottom.
Memory vendors have explicitly colluded in the past, but they really didn't need to - they just needed to copy their competitors' posted pricing. Presumably that is what they do now.
If there are high barriers to new competitors entering the market, then the situation is unlikely to change.
Having worked at one, we would check the prices of the two others on the same road once every hour. These numbers were reported into HQ, and a price adjustment would be made to be lower.
It’s very competitive and people are willing to drive or wait until a different time of day to get a lower price.
EDIT: Maybe I should have said: that’s at least not the case everywhere.
If a store knows that the other store will raise their price in response, they can collude without an explicit agreement.
[1] https://en.wikipedia.org/wiki/Price_signal#:~:text=A%20price....
Everyone acting in complete independence, simply copying everyone else, cannot lead to stability, let alone the durable, persistent lock-step stability that is seen.
The issue in the telecoms market, at least IMO, is the high entry price (spectrum access sometimes meaning there is no option aside from buying an existing operator), combined with scale of the operators (usually large and national-level) meaning there is little entrepreneurial spirit to drive costs down.
It can cost a large company 100x what it would cost a small company to do the same work, and that becomes a price everyone ends up paying for. But absent knocking down barriers to entry, it's a very hard market for a new entrant to get into, unless you are happy to just sell to the existing incumbents as clients.
Yeah because otherwise you make no money on gas. If I undercut the store across the street by a penny, they will then immediately match me or undercut by a penny. Pretty soon, we are at the break-even point and can't go lower without losing money. That's not tacit collusion, that's just a race to the bottom.
There's a big difference between all major app stores taking 30% every time money changes hands, and a race-to-the-bottom industry like milk or gasoline. Try starting a dairy farm - I think you'll find you won't be able to price your milk lower than your competition, and as a result your milk will be the same price everyone else's has been for the past 50 years - ~$2-3/gallon.
Black markets are useful in some circumstances, but when they grow too big they have to be regulated and taxed. A lot.
Good for Epic.
A black market requires illegality. You are conflating "rules" of contracts and "rules" of law.
I agree that Apple "even is party to transactions". I think that's the common problem with Google (eg. Froogle / Google Shopping), Amazon (eg. Amazon Basics), and Apple (apps that compete and undercut 3rd party apps or which don't have to adhere to the same App Store contract clauses).
Elizabeth Warren discussed this frequently.
> Google, Apple, and Amazon provide platforms that lots of other companies depend on for survival. But Google, Apple, and Amazon also, in many cases, compete with those same small companies, so that the platform can become a tool to snuff out competition.
[1] https://www.warren.senate.gov/files/documents/2016-6-29_Warr...
So I guess my point was this: past a certain size / power concentration a market/platform has to have regulations that are answerable to a democratic/political authority, not to a private party. That's regulation, isn't?
"Grey market" is taken, so how about "brown market"? :)
App stores don't create "laws"; they have contractually enforced rules.
Regulations are laws if the regulatory body was granted the power to make regulations.
Your use of legitimate confuses me; I can't grok your intention.
The FTC has the directive and authority to regulate commerce. If Apple is violating an US law or an FTC regulation, the FTC should prosecute. Otherwise this discussion should be focused on what laws (if any) you think need to be created.
Bloomberg/Warren 2020!
This is a poor analogy.
I am still waiting for a real argument on HN as to what Apple is doing that is anti-competitive or illegal. Still have not found one.
Also as a voter, I would hope that the legislature make these costs come down. In Canada, the government recently intervened to reduce credit card processing fees. I would hope next they direct their attention to app store fees.
https://globalnews.ca/news/4379884/canada-credit-card-fee-cu...
They provide a great service to devs - a store to get consumers to see and buy their products.
Why is 30% unfair?
A company charging a certain percentage for something is neither unfair or anti-competitive. You need to develop your argument further.
This is the same as with store owners who have to hand over part of their earnings as danegeld to some gangs controlling their neighborhood. They also pay happily for a great "protection" service. Would be a pity if something happens to your nice store (or app, in Apples case)!
I don't get how anyone who stands up for freedom of information, a free internet and a fair economy can still own an iPhone without developing schizophrenia..
They have Android, which dominates the market.
I get it, Apple Bad! Bad Keyboards! No Upgrades! Bad Bad Bad! And yet people time and time again want iPhones over Android - because they like the way the App Store is, they like iOS, they don't want malware on their phones that is rampant on Androids. Opening it up will be WORSE FOR DEVS.
> This is the same as with store owners who have to hand over part of their earnings as danegeld to some gangs controlling their neighborhood.
No, it's the same as store owners who have to pay higher rent to be on a busy street. Which isn't illegal.
> I don't get how anyone who stands up for freedom of information, a free internet and a fair economy can still own an iPhone without developing schizophrenia..
There are plenty of avenues for information - the iPhone controls apps - but the rules of engagement are clear and 2 million apps managed to get on the app store. If you can't, that's your problem.
Still waiting for a real argument on here.
They have obviously won their market position fair-and-square and their rules aren't illegal. But extracting taxes ('rent' in economist-speak) from other companies just because they were successful at some point in the past is uncompetitive behavior now.
Same goes for Amazon/Google: extracting rent from a market-dominant position should be illegal (it isn't) regardless of how that position was won.
> and are enforcing rules that do not have political (as in citizens') legitimacy.
This is basically saying to me "yea you're right, it isn't illegal, but I don't like it!!" They're charging for a service, there is nothing unfair about it. Frankly, it could be even higher.
> Same goes for Amazon/Google: extracting rent from a market-dominant position should be illegal (it isn't) regardless of how that position was won.
Google is a clear monopoly - they dominate the market. Amazon does not - Wal-Mart, Target, are all viable competitors. BestBuy, NewEgg, Ebay, etc.
Apple and Google are engaging in obvious tacit collusion. QED.
Apple offers a closed experience, which is what my parents want. They don't want to be tricked into downloading malware through some crappy facebook post.
This is depriving the market of a valid product, it's unfair to people who want this product, so that devs can make more money, and Epic can rip off more kids for a skin on a gun.
I think I'm on a 15€/100GB plan at the moment (plus a bunch a stuff like 25GB a month of international roaming).
Just look at the prices in Australia or Russia. There's no good technical reason Canada should just be massively more expensive than the rest.
Wait, how can what Apple does ever be okay even they legally don't have a monopoly.
Apple provides a marketplace (which they name store, but it's a marked place not a store) which is the only way to install software (on their phone) for millions of persons which means it's a marked and not just a marked place and they do both run the marked and provide products there but give their products an unfair competitive advantage (access to internal APIs, fast review, not applying app guidlines, subvention developent for the apps etc.) while haven basically rip-of pricing for (at least part of) the competition and intentionally preventing many business model and undermining how companies can freely present their products and company to users inside of their own products...
Not sure how anyone can call it ok, tbh.
Maybe legal due to a laws not yet having arrived in the 21st century but definitively not ok.
The only thing I can infer from this comment is that you aren't arguing within a legal framework (although I suspect you might be wrong because "unfair competitive advantage" is something that can be enforced under US and EU law).
Especially if we consider the difference between the intend behind a law and it's current legal interpretations.
Because of this I try to avoid arguing using the actual laws.
I also believe many of this laws need some degree of adaption to the modern world. Sometimes with changes in the law and sometimes with changes in the interpretation of the law.
So yes it's no accidentally vague.
More concrete would be : It should be illegal but might not be due to the law not being adapted to the dynamics of many modern markets.
But that's still pretty vague tbh.
And of course opinions differ on the good and bad aspects of their policies.
It’s not like all the competitors who are complaining are ‘fair’ in any particular way.
Also, your description fits a department store, or Amazon, or pretty much any other store for that matter.
All store owners get to stock what they want, charge what they want, and give their own products advantages.
If your argument is that no store should be able to do these things, then that seems like a reasonable position to hold.
Perhaps we do need to overhaul the notion of marketplaces and intermediaries in general. That seems like a relevant idea to explore.
The people arguing about monopolies are saying that everyone else should be allowed to do these things, but not Apple because they have too much power.
People don't realize what's actually going on with the policies and practices of the app stores. They just buy the phone and use it. If they did know, they would probably be more opposed to it too. They don't realize how these practices actually impact them and their choices on the platform.
I think plenty of people might think on reflection "That's not cool but I still want that phone".
That pretty much sums up my continuing commercial relationship with Google as well.
And my feelings about most modern meat production practices.
We don't always vote with our wallets.
We do, it's just not 100% of the weight of the decision, but it's rarely 0%.
Indeed. It is a common misconception that antitrust only applies to monopolies. You can engage in anti-competitive behavior of various kinds, illegally, without actually having a monopoly in strict terms.
I suspect this is/was part of the push to get non-incumbents into the cell market.
But this was back when the best they offered was 3G, and their signal quality wasn't great. After a few incidents where I was downtown in Toronto, full bars of signal, yet couldn't open a single webpage or use my data, I decided it was time to ditch them. I loath the big-3, but I needed reliable service.
I've heard that after they installed their LTE/4G towers, most of those problems went away. Maybe I'll go back, eventually, but for now I'll be gouged like most Canadians.
Their Wikipedia article paints a pretty bleak and accurate picture of the "competitive" landscape:
> Freedom Mobile Inc. is a Canadian wireless telecommunications provider owned by Shaw Communications. With 1,767,155 active subscribers (as of the end of February 29, 2020) in urban areas of Ontario, British Columbia and Alberta, it is Canada's fourth largest mobile network operator with 5% market share.[3]
> Founded in 2008 as Wind Mobile by the telecommunications company Globalive, Freedom was one of several new mobile carriers launched in Canada in 2008 after a government initiative to encourage competition in the wireless sector alongside Mobilicity (later acquired by Rogers Communications) and Public Mobile (later acquired by Telus).
While that makes for nice rhetoric in your great comment, you don't actually know that this doesn't happen.
Wow. In France it's the reverse: during promotions, you can get 70GB for €10.
Out of promo, it's €15-€20 at low cost operators, and €35 at traditional brands.
Example: A few years ago it was legal in the UK to advertise the price of broadband excluding the fee for "landline rental". This recurring fee notionally covers the service cost of the actual copper (in most cases) last mile cable needed to deliver service. In principle you could use it to make voice telephone calls (remember those?) and needn't buy it from the same provider as Internet service piggybacked on the same physical infrastructure.
So e.g. Big ISP #1 advertises Internet is "£5 for first six months†" and then the small print explains "† Plus line rental of £11.50 per month". That's £16.50 customers will actually be paying, and a competitor Big ISP #2 won't get far advertising Internet as "£15 for first six months" because that sounds much more expensive even though it's less. So sure enough they'll do the same thing only more so "£3 for the first six months†" "† Plus line rental of £12 per month".
Still, ISPs argued this is fair because they don't actually provide the service "line rental" pays for, they don't have teams of engineers in vans ready to dig up cable and repair it, that's something a last mile owner does.
Except, since the last mile is a natural monopoly that provider is legally obliged to publish its pricing and rationale. Sure enough it does bill for "line rental". But is it charging £12 per month? £11.50 per month? Er, no, over the modern period its costs have reduced gradually and it's charging those ISPs about £8 per month. So that £12 "line rental" is actually £8 line rental plus £4 "Money we're hiding from our real prices so as to trick customers".
Even if they never met in a darkened room and agreed to fix these bogus prices, the effect was that all large UK ISPs inflated a fee so as to make their prices look cheaper, taking advantage of customers. Maybe no crime was committed, except in the sense that customers got ripped off.
This particular loophole was closed by requiring ISPs to advertise the price that includes all fees needed to deliver the actual service, and sure enough once they couldn't use it to hide the real price the ISPs stopped pretending "line rental" cost 50% more than it really did.
The MVNOs compete heavily on price, and drive prices down for savvy customers. You can get 3 GB/month with unlimited calls and SMS (with roaming to 50+ countries) for 6 GBP per month on a 30 day rolling deal, right now.
Maybe it's a form of pride to have the "Canadian alternative"? Or they feel they couldn't really compete with the US/Europeans?
Population density in Canada is about 4 per square km, in the US about 36, and in the UK (pretty typical for western-europe) about 270.
I know that much of Canada is mostly uninhabited and typical population density is a lot higher, still, to hook up Canadian telecom infrastructure seems to be inherently to be a much more expensive endeavour.
I compared quickly (not very thorough) the profit margins and some ratios of US/Canadian telecoms, and they're really not much different.
It's an extreme outlier in terms of habitable land vs land area. 5% of it's land is arable, as compared to close to 17% for the United-States. I wouldn't be surprised if 90% of the land was simply not inhabited.
[0] https://geopoliticalfutures.com/population-density-of-canada...
Sources will state about 80% of Canada is uninhabited, and 47% of the US. In the UK it' 1-2%.
In other words, even assuming you apply the population density figures I mentioned in my previous post to only 20% of Canada or ±50% of the US, you'd still get a large discrepancy in 20 people per square km in Canada, vs 72 in the US, and still around 270 in the UK.
Hooking up the same coverage with 3-4 (US) or 13-14 (UK) times fewer people in that area should naturally drive much higher costs per person connected, which may explain prices.
And given profit margins of all the big telcos aren't exceptionally high for Canada despite much higher prices, that hypothesis seems quite plausible.
What I would really want to see is the density distribution of the parts of the country that actually have coverage. Eg how many square miles do I need to cover to serve 50% of the broadband users, 75%, 99%. That would give us a way better idea.
Lastly, I wouldn't discount the theory that the profit margins might be bad because the companies are inefficient. When there's no competitor or threat to the business it's easy to be inefficient and still end up with profits.
I use the 2ndLine app for (very rare) calls and SMS. It gives you a local number. Data-only is the most cost effective imo
Same for webdev
https://www.ftc.gov/tips-advice/competition-guidance/guide-a...
While 30% is steep I don’t think Apple is at fault here. You wanna be able to use their carefully constructed walled garden with security protections, servers, payment system and users? You have to pay to play.
I suppose the state could implement price controls and force Rogers et al to lower their prices. That worked well in the past!
Apple on the other hand has created an infrastructure to enable a billion interconnected devices, and they are now charging a fee to operate. They are not colluding or preventing competition, they are simply saying there's a price to play, and it's 30%.
It's natural that Fortnite doesn't want to share their profits, in the same way that Apple doesn't want to be the only ones taking the loses, but every time this question comes up, lots of comments assume Apple should bend over simply because it's bigger and wealthier.
In Canada, we have three major cell carriers. None of them has a monopoly, or anything close to it. None of them has even 50% market share.
You can have a 10 GB smartphone plan with Rogers for $75. If you don't like that, you can switch to Bell's 10 GB plan for $75. If you don't like Bell, of course you can switch to Telus's 10 GB plan for, wait for it, $75.
The Big 3 operate smaller brands with fewer bells and whistles and lower costs. You can get a 4 GB cell plan from Koodo (Telus subsidiary) for $50, or from Fido (Rogers subsidiary) for $50, or from Virgin Mobile (Bell subsidiary) for $50.
Sometimes one of them has promotional pricing, like $45 instead of $50 for 4GB. The other two offer the same pricing for the same duration. Sometimes one of them increases their prices by $5 a month citing reasons such as infrastructure investments, lower Canadian dollar value, or inflation. The other two increase their prices by the same amount a couple of days later.
And none of this is collusion in the legal sense. They don't gather in smoke-filled rooms and decide how to screw over their customers. There is not back-channel communication whatsoever. And it is not because the competition is so perfect the prices have been commoditized. In fact, Canada has some of the highest cell plan prices in the world, even adjusting for factors such as population density and GDP.
It's just that the big companies have decided to stop competing. If you live in, say Alberta or Ontario or BC, you have three options and they are all the same overpriced crap. Cell carriers in Canada are not a monopoly, but you don't have to be a monopoly to harm customers with anti-competitive behaviour. Apple and Google, Android and iOS do not have a monopoly or a collusion agreement. But they are harming the customers all the same.