For one thing, the jury is probably more technically savvy than the judges that will ultimately decide this case.
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.
---
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.
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.
[0] The Korean for Zaibatsu[1]
[1] The Japanese for Chaebol[0]
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.
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.
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.
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.
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.
Some parts of that infrastructure seem to be having serious problems now:
Lol, what?
I'm from Northern Europe, where running a 3% deficit is seen as edgy and daring.
"In FY 2023, the federal government spent $6.13 trillion and collected $4.44 trillion in revenue"
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.
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.
Therefore, I support the Mexican drug cartels
Separately, that's kind of a gross choice of comparisons.
"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
It’s not illegal just because you don’t agree with the philosophy of a closed ecosystem
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.
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.
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.
They appear to have ruled that Google has a monopoly because they’ve been squashing everyone else who should have been able to make an App Store by Google’s policies.
Apple isn’t squashing anyone, they just don’t allow it in the first place.
So I don’t think this would apply to Apple because of the line of reasoning. I know most people on hacker news think Apple should be forced to allow alternate app stores, but I don’t think this ruling can be used for that. It appears you would need something else.
Rather think about this as Google lost, Android won. If this ruling goes trough, Android becomes an more open platform by default. Think about it: Steam, itch.io and GOG stores on Android.
The only thing that will be clear is that Apple got it right the first time by not allowing other app stores.
You might have a few stores but they will largely compete with each other, reduce prices, and offer freebies.
Fuck the App Store. I want to use steam.
Wildly different claim from “every game will have its own store”
It becomes an issue for the legislature to fix. Not the courts.
Two markets ARE at play for consumers: mobile phone hardware (with OS) and mobile app stores/apps. Apple is using it's monopoly in the former to create/enforce a monopoly in the latter.
You can tell there are two separate markets because you, the consumer, make (at least) two separate purchases to participate.
The whole argument is that Apple is leveraging the position in one market (hardware) to gain advantage in another market. Your answer is "competitors can always build their own hardware" don't you see that this is a nonsensical argument?
Apple decided where the boundary of competition lies by deciding to bundle their phone, their operating system, their app store, and their code signing policies into a package deal. A thicket of copyright laws forbid you from unbundling any combination of these. For example, I can't legally run iOS on my Pixel 8 Pro. It is legal to run Android on an iPhone, except the hardware boot ROM is designed to reject anything not signed by Apple, and Apple won't sign Android. You can circumvent that by taking advantage of security vulnerabilities in the boot ROM[0], and that's legal, too, but you can't legally tell anyone about those vulnerabilities because telling people how to break copy protection is a felony.
This same logic applies to application software. It's legal to jailbreak[1] your phone to install non-App-Store apps, but illegal to provide the jailbreak tool necessary to install those apps. If Epic had decided to release a jailbreak to install the Epic Games Store, instead of releasing a hotfix for third-party in-app billing and suing for antitrust, Tim Sweeney would have been thrown in jail for violating 17 USC 1201.
In copyright law, there's a concept of copyright misuse, which is what the courts call using copyright to break antitrust law. Copyright allows you monopoly control over your work, but you are not allowed to use that control to maintain an illegal monopoly that's outside of the copyright bargain. In other words, you don't get to opt-out of forms of competition you don't like. Congress decides those.
So no, "build your own phone and app store" is not enough. And letting Apple dictate the conduct of their competitors is effectively giving them antitrust immunity.
[0] Which are, BTW, once-in-a-decade. We've had a grand total of two bugs that can be used to install alternative operating systems on an iPhone.
[1] Jailbreak bugs aren't as scarce as boot ROM bugs, but they've been getting scarcer over time. This is not because Apple is doing a good security job, but because the NSA is hoarding all the good bugs for themselves.
I my opinion the two markets are: Providing apps on iPhone, and offering payment processing for apps on iPhone. Apple is using its absolute monopoly on providing apps to also entrenched itself in the market of providing payment for apps.
I mean, it's far more than that. Most importantly:
>Historically they have been held to include exclusive dealing, price discrimination, refusing to supply an essential facility, product tying and predatory pricing.
While IANAL - even as a plebe I can pretty easily tie refusing to allow third party app stores to both refusing to supply an essential facility, and product tying.
Why should my choice of hardware or OS dictate the apps I'm allowed to install? That's 100% product tying. It would be one thing if third parties just had no interest in supplying an alternative app store. It's another thing entirely to lock them out via your monopoly on the ecosystem.
For tying, while not a firm ‘rule’ the most common application of tying is limited to the ‘tied’ product being from another market when compared to the ‘tying’ product. Also, the current appellate court standard (worded semi-informally) is that a tying of products raises antitrust concerns when it restricts competition AND provides no benefit to consumers.
As to essential facility, the most impactful factor for the plaintiff (as in the hardest burden for the government to overcome to establish monopolistic abuse) is as follows: the plaintiff is REQUIRED to prove that the compelled permission to competitors to utilize the “facility” does not interfere or allow for detrimental effects of the dominant firm’s ability to serve its own customers.
Apple’s historic marketing speak and other ‘on the record’ statements about the app store’s exclusivity ensuring tight control for the security of Apple’s customers is directly written to advance defenses to these two claims.
You can certainly argue that Apple’s conduct is characterized as abuse of monopoly, but there arguments against that can also be compelling.
The above IS NOT and should not be considered legal advice.
Do you own an iPhone? I suspect that the vast majority of people complaining about Apple's "lock down" are people who don't even use an iPhone.
If you do own an iPhone ... why the heck did you buy one knowing its limitations. It's like buying a pink shirt when you hate pink, despite the availability of shirts of other colors, then going to the manufacturer to complain about the color.
> why the heck did you buy one knowing its limitations.
Because:
• Almost everyone I know uses iMessage exclusively.
• I very strongly dislike Android's UI design.
• I strongly prefer iPhone hardware.
Any two of these would be insufficient to offset how furious I am that I can't decide what code runs on my own damn phone! But taken together, Android just doesn't make sense.
I jailbroke my iPhone for years, despite the many inconveniences of running an outdated version of iOS, but Apple's security has just become too good.
So for example, if you had a dominant market position for a particular category of phone operating systems, and you wanted to advance your interest in the market for app distribution...
Paying off gamedevs would be analogous to paying off dough-makers (or doughnut bakers?) to only supply your store, and not your competitor, which would be super illegal. AMD sued Intel for very similar activity, and won.
Epic as a game store is very much not a monopoly by any means. Game consoles are certainly an argument, but thus far none are dominant over the other. It would mostly be a problem if a new console jumped in and Sony/Microsoft teamed up to hardball it out.
Isn't the resolution the same in each case? If you have an iPhone and you want to install an app from another store, you have to buy another phone. It's the same with these deals with Android, just overt.
Apple prevents that I bring an outside donut from competitor's, while Android allows it. That is basically the difference.
I only know of the concept of Corkage, where you pay the restaurant a fee if you bring your own wine to drink:
https://www.webstaurantstore.com/blog/2626/corkage-fee-guide...
> A corkage fee is the price charged to guests who choose to bring their own bottle of wine to a restaurant. Corkage fees usually exist at restaurants that already serve wine. The practice of allowing guests to bring their own wine is considered a courtesy to guests. … The average corkage fee ranges from $10 to $40 per bottle but may be as high as $100 or more.
Or you know, they don't care as long you're a paid customer.
BTW, I didn't say anything about restaurants. Coffee shop in general have much more of a lax atmosphere, so they generally don't care too much.
Some do, some don't. In my experience, Starbucks couldn't care less as long as you buy a coffee (and even then couldn't care less. maybe a restaurant would care more but it's on bar logic: they don't mind lending seats until paying customers come in). Smaller shops tend to be more strict about doing that kind of thing.
Seems to me the analogy holds.
What percentage of people do you suppose carry two different phones in their pockets? Is this something you reasonably expect the majority of people to do?
> Apple preventing other app stores on iOS is more like Starbucks preventing Peet's from coming into its stores to sell its coffee.
Just look at your own words. Preventing other stores is like preventing competitors from selling in your store?
Preventing other stores is preventing other stores. You can put whatever you want in your store, they put what they want in theirs, and the customer gets to choose where to get their app.
Preventing the customer from using the other store is the anti-competitive thing being objected to. It doesn't need an analogy, that's literally what it is.
It is anti-competitive to prevent competing stores. How you do it is irrelevant.
and their OS. I don't care if they allow whatever on their store. I would like the option to go to other stores or even sideload my own apps without the store intervention. That's right now impossible without a) hacking the device or b) being a dev working on an app.
So IOS may one day not be considered a starbucks, but a park. And you can't hog a park to yourself
People that are not employees of the company that holds dominant market position.
Except the App Store was added to the iPhone before it reached its current level of ubiquity.
I believe Apple views the App Store as a feature of the iPhone that contributes to its value - the huge variety of apps available definitely contributed to the iPhone’s success; see the Windows phone for an example of a phone without a good App Store.
fwiw I completely agree, but isn't this the inverse of the argument people make for why Apple deserves 30% of app revenue? Do app devs deserve a huge chunk of iPhone revenue since they contributed to its success?
Why should that matter?
> I believe Apple views the App Store as a feature of the iPhone that contributes to its value
If people prefer to install apps from Apple's store they're free to do so. That doesn't require them to prohibit other stores -- let the customer choose.
> the huge variety of apps available definitely contributed to the iPhone’s success; see the Windows phone for an example of a phone without a good App Store.
You're referring to the platform's selection of available apps. That is something different than the method of distributing them or whether it has competitors.
They all have closed application ecosystems and don’t allow third party stores.
they can, but they don't. Part of their argument seems to be that mobile is now a general purpose computer like Windows so it should open up. The big 3 consoles don't try to pretend that you can make host much more than games and movies on their devices, and the consoles operate on much thinner margins than the mobile market.
You can say it's cynically about money and that Google/Apple are the biggest targets. You can optimistically say it's that Epic knows consoles do more to deserve their 30% and aren't just gatekeepers (there is a LOT more support for AAA devs from the big 3 consoles than anything Google/Apple offers. Including direct help in porting if you strike deals).
We're seeing more handheld PC's, but the days of the Vita or 3DS as dedicated handheld consoles seem to be past us. There's a non-zero chance PC far in the future does the same to regular consoles too.
It's one thing to say "this is how the law should be, so that Apple should have to open their platform"; it's quite another to say "as the law is right now, Apple should have to open their platform."
If the courts get it wrong then you have to go to Congress, sure. But then you're in the same place -- convince Congress that it's bad.
Either way we're having a debate about whether it should be allowed. And the answer is no -- this business model is anti-competitive, for any business, and if existing interpretations of the anti-trust laws don't currently prohibit it, they should.
And still Apple is the one being sued.
The way that anti-trust law works is that if you have more market power, like Apple clearly does, then you are even more subject to the law and required to do certain things.
But also, if you disagree, then feel free to sue those other groups.
Being charitable, these are two different juries. It's a little annoying that, in a country where iOS is the dominant OS, the iOS monopolist is exonerated and the non-iOS monopolist is recognized- nonetheless this is still a big win for consumer rights.
Just this part alone would applies to Apple the same way
It should be though. Unchecked monopolies, duopolies and oligopolies are antithetical to a free market economy - they stifle competition and make the market un-free as well:
- for employees, they're bad because monopolies (or cartels) suppress their freedom to go to a better employer. The best case to look at is actually the tech sector, where large corporations colluded to keep compensation down [1], but there's also more evil cases like WalMart that go as far as underpay their employees so badly that they can only survive on food stamps [6].
- for suppliers, they're bad (in the correct term of a monopsony) because having only a few (or only one) buyer depresses their ability to get fair prices for products, e.g. in agriculture [2], or in WalMart [3][4]
- for customers, they're bad because they can't (realistically) go to alternatives, especially if the monopoly in question has extinguished competitors by advantages of scale - again, WalMart is a nasty example [5].
- for society as a whole, they're bad because, again, large actors like WalMart can devastate vibrant community centers like malls, leading to dereliction of entire neighborhoods in a domino effect [7], and eventually the erosion of local tax bases, leading to funding issues for basic government services.
[1] https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...
[2] https://usceconreview.com/2022/07/06/america-where-even-sust...
[3] https://www.businessinsider.com/wal-marts-suppliers-feel-pre...
[4] https://www.wsj.com/articles/wal-mart-ratchets-up-pressure-o...
[5] https://www.investopedia.com/terms/w/walmart-effect.asp
[6] https://www.cnbc.com/2020/11/19/walmart-and-mcdonalds-among-...
[7] https://www.cnbc.com/2020/06/20/how-mall-closings-in-america...
Some markets only support a natural monopoly though. If you forcefully break up every monopoly you'll always be in court, because after winning the case and breaking up a company, the next natural monopoly will form within a few years.
The best compromise is to only go after them if they're abusing their position. I agree the standards for that are too low though.
I think there are a lot of laws about this. Guys get nicknames like "The Trust Buster" for going after them.
Monopolies aren’t illegal. Only the abuse of a monopoly position to advance your interest in other markets is illegal.
E.g. It’s not illegal to be the only seller of gasoline in the country. It is illegal though to bundle laundry powder with gasoline sales to corner the laundry powder market.