> So tell me again when an “antitrust” ruling has ever been applied to a company with less than 50%?

50% of what is the issue, though. Some arbitrary descriptive market the target company preferred to be used for the antitrust analysis, or the actual market in which substitution, and thus actual competition, occurs as found by the court hearing the case?

Because defining the relevant market is not infrequently a contentious point in antitrust.

So can I define Epic having a monopoly on being able to buy things in Fortnite? What if I want to sell my cool “Scarface dance” next to the “Carlton dance” within Fortnite without paying the “Epic Tax”?

I upvoted your comments based on a good faith belief that you're open to learning more about how antitrust law works. It has little to do with market share, and everything to do with a concept called "market power."

Market power is the ability to coerce people into paying more for something via a mechanism other than actually offering a better product or service. A textbook example which most people would agree is bad is a trust/cartel situation where a few players artificially limit supply, and then can raise the price on consumers because there are no competitors. But if a firm is able to drive up prices with impunity for any reason, it's likely they possess market power.

When a firm possesses excess market power it's good for that firm, but bad for the market, consumers, and society. By definition a firm with a lot of market power has very little competition, so even as their margins grow, product quality will decline and price will increase. (Sound like Apple in 2020?) And new firms will find it difficult to compete in that market even as the firm with market power grows very rich, which exacerbates the problem of wealth inequality. (Sound like America in 2020?)

A society which doesn't place some sort of checks on a firm's ability to acquire market power ends up being a place where the way to get ahead is to find an unfair advantage, abuse it, and screw everyone else. (Again, sound familiar?)

At this point it's almost certain that Google is violating antitrust regulation by abusing its market power (proven in the EU, and the US looks poised to start filing lawsuits this year). Apple, Amazon and a few others are up for debate and it's also fair to say that antitrust regulations should evolve to address the tech industry more effectively. The antitrust problem isn't limited to tech however, anti-competitive behaviors of questionable legality have proliferated all over the US since the 80s due to a lax regulatory environment.

If you want to learn more about this topic, Matt Stoller's newsletter "BIG" on Substack is a phenomenal place to start.

> Market power is the ability to coerce people into paying more for something via a mechanism other than actually offering a better product or service.

How exactly does Apple "coerce people into paying more for their phones via a mechanism other than actually offering a better product or service", and what is that mechanism?

> But if a firm is able to drive up prices with impunity for any reason, it's likely they possess market power.

How is Apple actually able to "drive up prices with impunity for any reason"? It seems to me, the more Apple raises iPhone prices, the more people are priced out and decide to switch to a cheaper phone instead.

The matter under contention is the pricing of in-app purchases, not the pricing of phones. By disallowing app stores other than Apple's App Store, Apple is coercing users to pay an inflated price for in-app purchases, since it takes a 42.8% price hike to negate Apple's 30% fee.

Both are relevant, because in order to successfully win an antitrust tying claim under US law you need to prove the seller had sufficient market power in a tying product in order to coerce buyers into buying the tied product.

In this case, once you buy an iPhone, you're forced to use Apple's system to make in-app purchases. The tying product is the phone, and the tied product is the in-app purchase.

So you need to show that Apple has sufficient market power in the smartphone market, and that is where the question of the ability to control prices of phones comes in.

Epic's lawsuit does not accuse Apple of tying App Store sales to phone sales. Two of the nine counts are about allegedly tying in-app purchases to app sales, and the rest don't involve tying.

(Neither does Apple v. Pepper.)

I wasn't actually talking about Epic's lawsuit.

But since you mentioned it, I'm not really sure that Epic will succeed with their argument that the "iOS App Distribution" market is the relevant tying product market absent an analysis of the overall smartphone market.

So what’s the true value of those cool Carlton dance moves I can get on Fortnite? How much less would the coins and loot boxes cost? Just imagine the overhead that Epic has to charge to reproduce the $18 billion of virtual goods it sales.

This article is about WordPress, not Fortnite. For WordPress.com to cancel out Apple's 30% fee, its monthly prices for its paid plans would need to increase from $4 to $5.71, from $8 to $11.43, from $25 to $35.71, and from $45 to $64.29.

https://wordpress.com/pricing/

I'm not sure that they are. I did say that something smells rotten (products getting worse and prices going up), but this alone is not justification for punitive measures.

The government playbook in this sort of situation is normally to start subpoena'ing emails, execs etc. and look for hard evidence of actual anti-competitive practices. They're not only interested in a business model as it's described in the media, they want to know what company execs actually did. If they find something they file a suit.

Wouldn't an antitrust claim against Apple likely fail if the plaintiff cannot establish they actually have market power in the smartphone market?

> Wouldn't an antitrust claim against Apple likely fail if the plaintiff cannot establish they actually have market power in the smartphone market?

Well, assuming it is one based on abuse of market power and not the other kinds of antitrust violations (e.g., combination in restraint of trade, etc.), it would fail if the plaintiff couldn't establish that Apple had market power in the market for the product for which they allegedly abused market power. If that was iPhones, for instance, that would be the market for iPhones plus whatever products empirically people substitute for iPhones in response to pricing changes. (Of course, if Apple has market power, there is some range in which the “plus...” part is “none”, since market or pricing power is the ability to raise prices without driving sales to a competing good.)

IANAL, but if the lawsuit was about selling smartphones, then yes I think so.

If the lawsuit was about selling some popular class of app in which Apple leveraged its monopoly over app distribution, I think the plaintiff could have a pretty strong case.

Do you think that a court will permit a plaintiff to claim Apple has a "monopoly" over app distribution without an examination of its market power in the greater smartphone market?

Keep in mind that even if Apple only had 1% market share in the smartphone market they would still have a "monopoly" over app distribution on their own phones.

> So can I define Epic having a monopoly on being able to buy things in Fortnite?

If price increases for Fortnite IAP don't, empirically, drive people to stop buying them in favor of alternatives of some kind, yes. Or, rather, you can't define the market that way, but if there is no substitution effect a US court considering an anti-trust claim is likely to see that as the relevant market, not some broader, say, battle royale game IAP market in which price-driven substitution does not occur.

I guess that’s the value of evaluating on a case by case basis. Depends on what you define as a market worth pursuing antitrust issues for. I would also argue this informally happens when people start to talk about antitrust as it’s usually applied to markets that are general enough that more or less everyone participates in (or feels consequences from) them.

So the government should make decisions on a case by case basis? Isn’t that what everyone is whining about Apple doing - treating small developers and large developers differently?

I’m much more worried about the government deciding what happens to people randomly than a corporation. I don’t have to buy Apple products. It’s a lot harder for me not to have to deal with a capricious government.

I’m with you, I’m simply stating the upside. My further point was that it is already treated somewhat case by case by the selection of antitrust cases to pursue.

You might be able to do just that after this Apple/Epic ruling. That's kind of why NFTs/digital ownership is so exciting. You might be able to buy or sell your dances on any store you want to and use them in the game.

I wish I could be on the other side of a bet against most of HN, betting against all of the wannabe lawyers who don’t understand what a “monopoly” is and posting examples of market collusion showing how Apple/Google could be charged based on the App stores.

You can. Buy Apple stock.

A lot, actually. It's called a "per se" ruling.

https://www.justice.gov/atr/antitrust-case-filings-alpha

Most antitrust cases are for things like price fixing, bid rigging, and mergers.

So “a lot” was a very specific example....

The below took me about a minute to find through Google.

U.S. v Socony-Vacuum Oil Co., 310 U.S 150 (1940); United States v. Sealy, Inc., 388 U.S. 350 (1967); United States v. Topco Associates, Inc., 405 U.S. 596 (1972); Craftsmen Limousine, Inc. v. Ford Motor Co., 363 F.3d 761 (8th Cir. 2004), Northern Pac. Ry. Co. v. US 356 US (1940); Agnew v. National Collegiate Athletic Ass’n, 683 F.3d 328 (7th Circ. 2012); or In re Flat Glass Antitrust Litigation 385 F.3d 350 (3rd Cir. 2004), National Soc. of Professional Engineers v. U.S. 435 U.S. (1878); In re Insurance Brokerage Antitrust Litigation, 618 F 3d 300 (2010); or In re Southeastern Milk Antitrust Litigation, 739 F.3d 262 (2014).

And this is why HN users make bad lawyers.

I picked one at random.

“Topco, a cooperative association of about 25 small and medium-sized independent regional supermarket chains operating in 33 States.”

I also looked up one about Ford vs a limo company that you deleted.

They all involve multiple companies colluding. It has nothing to do with one company setting prices in their own store.

Your argument, if you can call it that, is completely incoherent.

You seem to be under the impression that anti-trust is isolated to monopolies, when clearly it is not. Apple and Google do not need to have a monopoly for the government to decide that their app store business model is anti-competitive, and there doesn't need to be precedence.

Is that how the law works?Apple is not a monopoly because you can choose Android. This is an awesome loophole. Visa is not a monopoly because there is also MasterCard. At&t is not a monopoly because you can choose Comcast.

It’s a “loophole” that it isn’t a monopoly because you have a choice? That’s kind of a the definition of a monopoly. It’s even in the first two syllables of the word....

I love my choice of AT&T over Comcast. $70 all fees included gigabit up and down.

Your argument is based on a lay-definition and not a legal definition. It's good to know your etymology, but that doesn't get far in court. From the wikipedia article on us antitrust law:

> When enterprises are not under public ownership, and where regulation does not foreclose the application of antitrust law, two requirements must be shown for the offense of monopolization. First, the alleged monopolist must possess sufficient power in an accurately defined market for its products or services. Second, the monopolist must have used its power in a prohibited way. The categories of prohibited conduct are not closed, and are contested in theory. Historically they have been held to include exclusive dealing, price discrimination, refusing to supply an essential facility, product tying and predatory pricing.

Apple is exercising exclusive control over the market of apps made for the phones they make, so it looks to me like they satisfy the first requirement. The second requirement is murkier, but several of the examples listed sound quite similar to how apple operates its store. IANAL but the more I read about their behavior, the more I become convinced of their monopoly status. Having a monopoly is not a crime. Abusing monopoly power is.

>Your argument is based on a lay definition and not a legal definition..,From the wikipedia article on us antitrust law:

I’m going to let that sit right there.

The article literally spells out the legal definition, summarizes numerous actual antitrust rulings, with plentiful citations to relevant laws and case law, many with full and well researched articles. Maybe give it a read. You might even find an example where 4 tobacco companies, each with less than 50% market share, were found to be abusing market dominance.

https://en.m.wikipedia.org/wiki/United_States_antitrust_law

Or, keep on using the definition from your imagination. Whatever works.

You see the part about “collusion”? That’s why random HN posters make horrible lawyers.

As far as IBM (the case was dropped after 13 years and nothing came of it) and MS, they clearly had more than 50%.

You're conveniently ducking that they 100% control the market of software for their phones. And anyway, I didn't say that case was equivalent. You asked for a case where a company with less than 50% was subject to an antitrust ruling and I provided one.

And I'll remind you, I'm not a lawyer. Technically, zero lawyers is a good number of lawyers, so I must insist that makes me a good lawyer. Just, I'd suck in court.

A company that was subject to antitrust because it colluded with other companies in the market has nothing to do with what’s going on in the app market. Collusion is always illegal -except for the sports leagues.

Yes and consoles makers have control of their consoles, Roku has control of their platform, as does LG with their WebOS based TVs.

Yet and still when you were challenged to come up with an analogous example, the best you could come up with is multiple companies colluding.

I can't speak for what other people have posted, but there's, to my mind, a quite analogous case for this situation: Kodak v. Image Technical Services.

The case involved Kodak refusing to sell parts for its copiers to outside repair shops, and they were sued by the shops who claimed this was anticompetitive behavior.

Kodak made a claim that since there was robust competition in the market for copiers, they couldn't have market power in the aftermarkets for "Kodak copier parts and service." The Supreme Court rejected that argument, holding it was possible to show that there was market power (and therefore antitrust liability) in a secondary market even if the primary market is competitive.

The key point in the Kodak case was that Kodak changed their policy on selling repair parts after people bought the original product, and the change in policy is what led the Supreme Court to decide that the market for repair parts was a separate and relevant aftermarket, because the people that bought Kodak copiers lacked information at the time of purchase about Kodak's repair policy and therefore were locked-in to buying repair services from Kodak after the fact.

Subsequent cases since Kodak have continually narrowed the scope in which Kodak is applied, and it likely would not apply here because people who buy iPhones have known since the App Store launched in 2008 that the App Store is the only place they'll be able to install apps from.

Yes, the specifics of the case don't match up perfectly, but the context of the question was "show me a case where a single company had antitrust liability without a majority of the market," not "prove with a single citation that Apple will lose."

Fair enough, my comment was intended for people who were unfamiliar with the case and might misinterpret it to apply here.

Do you realize that I said "if apple gets hit with an antitrust ruling"? I'm not certain of the outcome; I see room for argument on both sides of this. You've apparently picked this 50% hill to die on. I wish that you were taking a curious approach to this conversation, because we might both learn something. Instead, I regret responding to you in the first place.

I recognize your username and I recall seeing good and thoughtful comments from you. I hope to meet you again in a more productive conversation.

i think apple has more than 50% of the US market now actually

46% https://www.counterpointresearch.com/us-market-smartphone-sh...