Comment by Nifty3929
2 years ago
Apple has about 60% of the smartphone market in the US, and about 25% globally. That's a pretty big stretch to call it a monopoly. There are many non-apple phone options that many consumers easily avail themselves of. And at least one other OS choice as well. All of these are fully supported by the entire ecosystem of telcos.
Seems like bullying to score political points to me.
The FTC is perhaps a biased source, but they say [1]:
> Courts do not require a literal monopoly before applying rules for single firm conduct; that term is used as shorthand for a firm with significant and durable market power — that is, the long term ability to raise price or exclude competitors. That is how that term is used here: a "monopolist" is a firm with significant and durable market power. Courts look at the firm's market share, but typically do not find monopoly power if the firm (or a group of firms acting in concert) has less than 50 percent of the sales of a particular product or service within a certain geographic area. Some courts have required much higher percentages. In addition, that leading position must be sustainable over time: if competitive forces or the entry of new firms could discipline the conduct of the leading firm, courts are unlikely to find that the firm has lasting market power.
The US doesn't have antitrust authority for the world, only for the US. iPhone has had 60% market share (or similar) for a long time now, so it's fair to consider that Apple has significant and durable market power in mobile phones.
Is it a complete monopoly? No, but it doesn't need to be.
From a very brief skim of the claims, the clearest one that stands out to me is the one about smartwatches. If Apple does provide better integrations to Apple Watches than 3rd party watches, that's pretty clearly 'tying' which is prohibited when using a market dominant product to create market dominance in a new market (smartwatches). OTOH, it wouldn't have been a big deal if the Microsoft Band had better integrations than other watches on Windows Phone, because tying is allowed without market dominance.
[1] https://www.ftc.gov/advice-guidance/competition-guidance/gui...
People seem to miss the concept of "market power" vs sales numbers. Apple loyalists love to brag about the fact that Apple users spend something like 7x more on Apps and other services than Android users. They don't brag about that so much when anti-trust comes up - on a weighted basis that would suggest Apple has about 95% of market share and should be treated in the same category that late 1990's Microsoft was.
Serious question. Why is it though, despite forming over 40% of the smart phone market in the US, Android users only spends 5% of the money? It can’t simply be about control, otherwise Nokia or BlackBerry should’ve accomplished that in their hay day.
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>that is, the long term ability to raise price or exclude competitors.
Apple doesn't have this power though. If they raised prices they'd lose sales. And they haven't been able to exclude competitors, there is a robust ecosytem of Android manufacturers.
There's a reason the FTC has been losing almost all of their cases recently. They internalized the idea that a large successful company is inherently bad and focus on that rather than any objective legal standard.
> Apple doesn't have this power though. If they raised prices they'd lose sales.
Yes, that's true for every company. So monopolies don't exist?
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Apple does seem to have pricing power. They don't sell (new) phones under $400.
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> Apple doesn't have this power though. And they haven't been able to exclude competitors
Where does your mind drift off to when you read the phrase "walled garden"?
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> iPhone has had 60% market share (or similar) for a long time now, so it's fair to consider that Apple has significant and durable market power in mobile phones.
It has market power, but it's not significantly larger than its competition. It's not 60% for iPhone, and 10% split up amongst 4 other competitors. It's 60% vs 40%... and probably more like 58% vs 42% [1].
Does 8% truly make Apple "dominant" to the point that integrating their software with watches in a better manner is illegal? I find that wildly difficult to believe.
> that is, the long term ability to raise price or exclude competitors.
Apple has been able to raise its own prices, but it hasn't been wildly out of line with competitors.
And Apple both makes phones and the software on them. They might be excluding or making competitors to their software have a harder time, but excluding? Not really - they have only excluded other large companies who have distinctly decided to run afoul of their guidelines (specifically, Epic).
1. https://explodingtopics.com/blog/iphone-android-users
In a 60/40 market, probably both parties have significant market power and qualify to have their market powers checked.
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> It's not 60% for iPhone, and 10% split up amongst 4 other competitors
That is basically what it is though. Google is not the 40%, it's Google, Samsung, LG, Motorola, etc. Yes Google Play Store is on 40% of those devices, but they can ship with other stores and some do.
1. It is not Apple iPhone vs Samsung, LG, Pixel Android. But Apple iOS vs Android.
2. The 60% of Apple iPhone / iOS Market "usage" share ( incase people want to be pedantic and refer it as shipping market share ), commands over 70% if not 80% of purchasing power in Apps or other sub market sector. That is a huge difference in market power.
I've seen this quoted multiple times now and I do not think it is the slam dunk people think it is. A literal monopoly is 100% market share, of course that is not required for antitrust law to apply. But the people who quote this intend to imply that 60% market share is sufficient to declare Apple a monopolist in violation of antitrust law, and that does not actually follow from a careful reading of this quote.
I will reply with a separate quote from the DOJ discussing what thresholds of market share are likely to be considered monopoly power:
> In determining whether a competitor possesses monopoly power in a relevant market, courts typically begin by looking at the firm's market share.(18) Although the courts "have not yet identified a precise level at which monopoly power will be inferred,"(19) they have demanded a dominant market share. Discussions of the requisite market share for monopoly power commonly begin with Judge Hand's statement in United States v. Aluminum Co. of America that a market share of ninety percent "is enough to constitute a monopoly; it is doubtful whether sixty or sixty-four percent would be enough; and certainly thirty-three per cent is not."(20) The Supreme Court quickly endorsed Judge Hand's approach in American Tobacco Co. v. United States.(21) Following Alcoa and American Tobacco, courts typically have required a dominant market share before inferring the existence of monopoly power. The Fifth Circuit observed that "monopolization is rarely found when the defendant's share of the relevant market is below 70%."(22) Similarly, the Tenth Circuit noted that to establish "monopoly power, lower courts generally require a minimum market share of between 70% and 80%."(23) Likewise, the Third Circuit stated that "a share significantly larger than 55% has been required to establish prima facie market power"(24) and held that a market share between seventy-five percent and eighty percent of sales is "more than adequate to establish a prima facie case of power."(25)
https://www.justice.gov/archives/atr/competition-and-monopol...
My reading of this is that below 50% is very unlikely to be considered monopoly power while above 70-80% is very likely. 60% appears to sit somewhere in between where it is possible but not likely. Historically, I have not seen any major cases where monopoly power was found at the market share level that Apple currently holds.
It is worth noting that the DOJ in their filing does not seem very confident in being able to prove that Apple's 60% of the smartphone market constitutes monopoly power either. They have instead opted to define a narrower market of "performance smartphones" where Apple apparently holds 70% market share, putting it above the thresholds quoted above. Whether this artificially narrowed market definition will be accepted by the courts will likely determine the outcome of this case.
> That's a pretty big stretch to call it a monopoly
The word "monopoly" needs to be banned from these types of discussions because it always derails the conversation into pointless semantic bickering. There is no definition of that word that will make everyone happy. Even if Apple had 99.999% marketshare, as long as there's some hacker selling DIY linux phones under a bridge somehwere, someone's going to say Apple CAN'T be a monopoly because they have a competitor.
There are many reasons why antitrust laws exist, and these lawsuits tend to be really complex. There's not a simple `if(company.is_monopoly()) sue(company);` program that the FTC and DOJ use to decide when to sue.
Apple has about 60% of the smartphone market in the US, and about 25% globally.
This case is about the US marketplace, globally is irrelevant.
And it is about more than just marketshare. Apple's tactics restrict the entire marketplace --- not just Apple captives.
Whole classes of apps are simply not practically possible on Android without paying monetary tribute to Apple.
For example, universal messaging is not possible without paying the Apple gatekeeper. Few people will use a messaging app if it can't communicate with 60% of their friends. And the only to make this happen is to pay Apple.
Huh? Don’t WhatsApp, Signal, etc. work in the USA? Or does anybody pay for them?
In the US you can actually lose relationships if you don't have imessage. None of the other apps matter.
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Or does anybody pay for them?
Yes --- unless they've been anointed with a special "friends and family" exemption offered in select cases.
WhatsApp Business is a subscription product. The fruit deity demands 30% tribute for this from any ordinary developer.
>>universal messaging is not possible without paying the Apple gatekeeper
There is in fact universal messaging - it's called SMS. You don't need to pay Apple to use it. If you would have added secure to your example then yes that would be correct.
Standard oil was at 64% when it was broken up in 1911. Absolute market share isn't the only factor that goes into determining monopoly. You also get different numbers from different definitions. Apple controls 100% of the iOS market, or ~80% of the mobile subscription market, etc.
>> Standard oil was at 64% when it was broken up in 1911. [...] Apple controls 100% of the iOS market [...]
I find it maddening that a lot of people replying to your fair point have chosen to ignore the first half and decided to exclusively focus on the latter, when that part was clearly meant as an example of how market definitions can have an impact.
A fairly recent example of the latter being a commonly mischaracterized or (by members of the public) outright dismissed concern was MSFTs dominance in the Cloud Gaming market, which was often met either with "but MSFTs share of the gaming market overall is less" or the even less applicable "but nobody uses Cloud Gaming anyway", even though neither should count towards whether something rises to anti-competitive behavior in a given market.
It's bikeshedding. People respond to the parts that they can, and ignore the parts they can't. Even if everyone else has already responded with the same thing.
> Apple controls 100% of the iOS market…
This is like saying Y Combinator controls 100% of the Hacker News market, or that Amazon controls 100% of the AWS market. It's a non-sensical argument.
Of course it's non-sensical, right up until that thing grows to be a large part of the US economy.
I have no idea what the numbers are, but if 80% of all commerce on mobile is going through Apple's devices then yes, it's likely that the Government will want to ensure there is "fairness" in that eco-system.
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Perhaps the more sensical version is "Apple controls 100% of the iOS app store market". Because no other app stores are allowed.
On the contrary, it's exactly on the spot. EU used the term "gatekeeper" for such a market position, where you can dictate the terms of the market (and have oversized influence over other participant's behviour), while dodging classification of "monopolist" on technicality. It's exactly the point.
Yeah! Microsoft owns 100% of the Windows market, so users shouldn't be able to install software on their Windows devices unless they use the Microsoft store. Installing your own software from the internet or writing your own code would be non-sensical because Microsoft owns that.
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“Apple controls 100% of the iOS market” as an argument sounds like satire lol. What point does this make?
Is the implication that Apple should allow iOS on non-Apple devices? There is not a single hardware company in the world that would integrate iOS to the degree that Apple does. A requirement like this would immediately enshittify Apple’s brand.
I wasn't implying anything of the sort. I was simply trying to illustrate that market share is relative to the definition of "market" you use with extreme examples. Frankly, I'm not even saying that defining iOS/the app store as a market unto itself is a good definition.
They're using emotional arguments, not rationale ones. Like calling Apple's cut of app sales a "tax", as it is literally not a tax but a normal part of doing business. Similarly the lawsuit claims that iPhone users somehow are "undermined" from messaging other phones, when in reality there are zero restrictions on messaging to and from any phone. None of these arguments are based on the reality of the situation, but some emotional response to it.
> Apple controls 100% of the iOS market
“AlotOfReading” controls 100% of your HN posts.
The call is coming from inside the house.
The smartphone market is irrelevant.
If my water provider said "We're the only water provider so we're raising rates 1000%, take it or leave it", you would still say that's a monopoly even though i could move house to an area with another water provider.
Apple has a 100% monopoly though it's AppStore on 2 billion devices though which $90,000,000,000 in trade is conducted. If that's not a market big enough to be considered for Anti-Competitive practices and illegally maintaining a monopoly then i don't know what is.
That's more trade than the entire GDP of Luxembourg!
You realize the world market is irrelevant. If some company has a monopoly in France, they don't care whether or not that company has less market in other countries. Apple has a monopoly in the USA and so the USA is going to try to break that monopoly. Google has already been sued and lost on it's app store market share. Apple's is larger.
60% sounds good enough for DoJ to sue, as a US government agency. Why do you even bother to quote "25% globally", it's meaningless here.
> There are many non-apple phone options
One non-apple phone option. Or you're somehow deluded into thinking the hardware matters any more?