U.S. Sues Apple Over iPhone Monopoly
David McCabe and Tripp Mickle (PDF, CourtListener, Hacker News, MacRumors):
The Justice Department joined 16 states and the District of Columbia to file an antitrust lawsuit against Apple on Thursday, the federal government’s most significant challenge to the reach and influence of the company that has put iPhones in the hands of more than a billion people.
In an 88-page lawsuit, the government argued that Apple had violated antitrust laws with practices that were intended to keep customers reliant on their iPhones and less likely to switch to a competing device.
The tech giant prevented other companies from offering applications that compete with Apple products like its digital wallet, which could diminish the value of the iPhone, and hurts consumers and smaller companies that compete with it, the government said.
The government points to several different ways that Apple has allegedly illegally maintained its monopoly:
- Disrupting “super apps” that encompass many different programs and could degrade “iOS stickiness” by making it easier for iPhone users to switch to competing devices
- Blocking cloud-streaming apps for things like video games that would lower the need for more expensive hardware
- Suppressing the quality of messaging between the iPhone and competing platforms like Android
- Limiting the functionality of third-party smartwatches with its iPhones and making it harder for Apple Watch users to switch from the iPhone due to compatibility issues
- Blocking third-party developers from creating competing digital wallets with tap-to-pay functionality for the iPhone
My high-level, non-lawyer-who-hasn’t-read-the-whole-filing take is that the DOJ’s case stretches existing law, but it may prove useful in revealing information and in shifting public opinion. I’m skeptical that this will amount to much more than a giant distraction. I wish Congress had passed better laws and that Apple hadn’t acted so badly.
Apple has maintained monopoly power in the smartphone market not simply by staying ahead of the competition on the merits, but by violating federal antitrust law.
[…]
We allege that Apple has employed a strategy that relies on exclusionary, anticompetitive conduct that hurts both consumers and developers.
For consumers, that has meant fewer choices; higher prices and fees; lower quality smartphones, apps, and accessories; and less innovation from Apple and its competitors.
For developers, that has meant being forced to play by rules that insulate Apple from competition.
Via John Gruber:
Defining the iPhone as a monopoly when it has somewhere around 55 percent market share in the U.S. is obviously the first thing the DOJ needs to prove.
The DoJ attempts to square this circle in a few different ways:
- It uses revenue instead of unit sales, pointing out that Apple and Samsung combined hold 90 percent of the U.S. smartphone market by revenue.
It creates a new sub-market, the “Performance Smartphone,” which pushes Apple up to about 70 percent of the market in terms of unit sales.
It accuses Apple of attempting to create a monopoly through its various business tactics, which is also illegal.
This is where I think existing law is lacking. iPhone is probably not a monopoly in the traditional sense. But it’s obviously not Nintendo, either. And I would argue that it’s much closer to the former than the latter. Apple thinks of itself as providing a highly differentiated product, which is true in a sense, but I see its hardware-software platform as approaching a utility. The smartphone revolution was so successful that the product has become table stakes for modern life. When everyone needs mobile Internet and app access, and the barriers to entry are astronomical, it makes more sense to think of iPhone/iOS as an electric company or an ISP than as a more powerful Nintendo Switch. We should be thinking in terms of common carriers and network neutrality. I don’t know whether there’s a good regulatory solution. Certainly, it could be a disaster if done heavy handedly.
I am supportive of good legislation in tech (especially for privacy and user rights) but this Apple DOJ complaint is everything that can be bad about government tech regulation: an ignorant, pointless exercise which will likely hamper making meaningful laws that help us as users.
Competition across iOS and Android platforms is important, but competition just within iOS is important too. My complaints have always been about Apple’s exclusive control over app distribution, regardless of Android.
[…]
Even though there is a smartphone duopoly with iOS and Android, iOS alone reaches so many hundreds of millions of people that it is effectively a market on its own. If you want to build and distribute for the most commercially viable smartphone platform, you have no choice but to follow Apple’s rules. Until Apple lets developers route around that monopoly through external payments and sideloading, there will be pushback.
This summary reeks of technical naivety. The DOJ is alleging that, for example, Apple Watch and iPhone work better together than third-party watches with iPhones not because of specific integration, but because Apple is locking third parties out. Same with Tile trackers vs. AirTags. The only alternative would be to allow third parties to install system software extensions on iOS, like on a Mac or PC.
I think both are true. As one would expect, the DOJ’s technical understanding is not great. I suppose you can argue as to why Apple did so, but it’s undeniable that it prevented third-party products in these categories from being competitive. Other companies innovated and got there first, Apple blocked them, privileged its own products, and took over the market.
So what surprised me is that they didn’t do the expected “Apple needs to make their watch work on other platforms”, they did the “Apple makes it impossible for other watches to work on their platform” -- which as someone who used to use a Pebble is 100% a better argument.
This is the worst history of the iPod I’ve ever seen.
If Microsoft had been able to charge 30% on all iTunes for Windows purchases, even without restricting its availability or functionality, history would have been very different. I don’t think it’s a stretch to believe that Apple’s policies could (or may already have) prevented the emergence of the next iPod. Imagine if the Web browser hadn’t already been invented. Or look at something like the Humane Ai Pin and how it seems like they had to contort the entire design and purpose of the product because they knew they would be locked out of really integrating with iOS. Apple would say that, not even knowing about what a product like this could have been, customers chose iOS because they wanted to be protected from its ilk. I find it hard to take this sort of argument seriously, even as I also see that somehow mandating the sort of integration you’d want would be a mess.
Here’s the most brutal sentence thus far:
“Rather, to protect its smartphone monopoly—and the extraordinary profits that monopoly generates—Apple repeatedly chooses to make its products worse for consumers to prevent competition from emerging.”
Mysk:
“In the end, Apple deploys privacy and security justifications as an elastic shield that can stretch or contract to serve Apple’s financial and business interests.”
“Rather than respond to competitive threats by offering lower smartphone prices to consumers or better monetization for developers, Apple would meet competitive threats by imposing a series of shapeshifting rules and restrictions in its App Store guidelines and developer agreements that would allow Apple to extract higher fees, thwart innovation, offer a less secure or degraded user experience, and throttle competitive alternatives.”
“…Apple would meet competitive threats by imposing a series of shapeshifting rules and restrictions in its App Store guidelines and developer agreements…”
“Shapeshifting” App Store rules and guidelines. Goddam, what a wonderful way to describe it.
The root of Apple’s recent success Apple to use dominance of the iPhone to push for dominance elsewhere (see Pay, Watch, AirPods). Even then it’s still shockingly bold that Apple told car manufacturers that the only way to keep CarPlay is if they let Apple take over the dash.
There’s no sourcing on these flyby quotes from unnamed Apple employees, but this is somewhat juicy: it sounds like an iPhone product manager explaining how they should differentiate Pro vs non-Pro models more aggressively.
An abstract way of looking at the DOJ’s antitrust action against Apple is that it’s like they’re zooming in on the very part that the district court and the appeals court said Epic had failed to prove: customer lock-in.
Epic’s sacrifice was not in vain, apart from the injunction.
It was really naïve to think Epic ‘lost’ its fight against Apple. Everything Epic fought for is going to come to pass, and Apple has trashed its reputation in the process while daring regulators the world over to start peeling the layers of its business apart with a crowbar.
I’m curious to see how long it’ll be before shareholders start questioning Apple about how they’re handling regulations.
Apple keeps getting fined for acting in bad faith and is risking more fines. They’ve wasted time and effort making 600 APIs instead of just opening iOS like macOS.
The costs are going to outweigh the benefits soon, which doesn’t make sense because they earn most of their money from hardware and they wouldn’t lose all services revenue either by opening up.
Apple still thinks it can control everything like the early days. It should’ve gradually let go, knowing this approach wasn’t going to last forever, reaping the benefits in the meantime.
See also: Gergely Orosz.
Previously:
- EU Approves Digital Markets Act and Digital Services Act
- Why Apple Should Compromise With Antitrust Regulators
Update (2024-03-22): Matt Stoller:
And in the U.S., retention rates are really high. According to one mobile carrier, 98% of iPhone owners buy a new iPhone. In China however, that number, at least a few years ago, was just 50%. The reason is simple. In America, it’s difficult to move out of the Apple ecosystem. In China, it’s easy.
[…]
According to the complaint, “as one Apple manager put it, allowing super apps to become ‘the main gateway where people play games, book a car, make payments, etc.’ would ‘let the barbarians in at the gate.’ Why? Because when a super app offers popular mini programs, ‘iOS stickiness goes down.’”
[…]
Like the rest of Big Tech, Apple is less a technology development firm than a middleman, standing in between the relationships of consumers and businesses, taking a piece from each. And it strong-arms anyone who tries to disrupt its role as that critical middleman, using coercive contractual terms, denial of access to key technologies, or outright deception via its impressive branding.
[…]
If you’re a consumer, sure there’s Samsung. But an app developer, or a messaging app maker, or automotive firm, or bank, or anyone who has to live in the Apple ecosystem, is operating inside a monopoly. If you make an email program, some of your customers are going to own iPhones, and they will expect an app from you, and thus Apple is your boss. It’s a bit like in the 19th century having one railroad to ship your products. There might be other railroads across the country, but the only one that matters is the one near you that can carry what you make. Similarly, an Android phone doesn’t help you if your customers demand you get your app, or your Toyota car, through the Apple approval process.
Case in point about Apple’s privacy “à géométrie variable”: their Shazam app, even on Android, asks for GPS authorization. Voluntary scanning of QR codes at restaurants was blocked when the UK government’s COVID tracking app wanted to offer it.
Apple music sales > human lives
The reality of the US smartphone market is that if you don’t do exactly as Apple wants then you’re shut out of 60% of smartphone users.
It’s technically not a monopoly but gives Apple an unreasonable amount of clout to even dictate the dashboard tech in your car. That sucks.
Despite my critiques of the DoJ suit, I think there are valid points in there. The cloud gaming section is one bit where it seems clear that Apple blocked a technology that it felt was a threat with an arbitrary ruling—clear because they subsequently backtracked that decision with no real technological change.
That’s also one place where it feels obvious that this suit is incredibly scattershot, in part because it’s so big and so long in the making. The strictures on cloud gaming have been relaxed (although perhaps too little and too late). I’m not a lawyer, obviously, but feels like what DoJ needed was maybe a much narrower suit that really focused on one or two high profile instances instead of throwing a bunch of stuff against the wall to see what will end up sticking.
My wife is technically adept, but it’s not a hobby for her, so I always find it interesting to hear her impressions on things that people in our corner of the internet feel very strongly about. Her overall impression is that it’s absurd Apple has absolute control over what people get to run on their iPhones. From that perspective, the cloud gaming ban seemed clearly malicious to her and the NFC restrictions seemed egregious. I did mention to her that some people think the iPhone is more like a Switch or PS5 than a computer so this absolute control is fine, and her exact response was, “people actually think that?”
[…]
She said green bubbles suck so much that it makes her never want to get an Android phone lest she be the green bubble person everyone else in the group thread is slightly angry at all the time. “It’s social suicide.”
[…]
I do think it’s notable that (a) the iPod is what really pushed Apple off the brink and into the mainstream, setting them on the path that got them to be the biggest tech company in the world and (b) the iPod really took off once Windows users could buy it, and Apple would not have been able to do this if Microsoft had the same rules in place that Apple has over the iPhone and iPad.
[…]
Do you want to be the next big smartwatch company? Go ahead, but you can hire the best developers and designers in the world, you’ll never be able to beat the Apple Watch because Apple doesn’t offer you the same access their product gets. See also cloud gaming services which were blocked for years pretty clearly because they competed with Apple Arcade and made it impossible for Apple to maintain the IAP revenue and control over what games get to run on people’s devices.
[…]
Without getting into details, I will say that there are absolutely cases in the payments industry where innovative ideas were proposed but scrapped because you couldn’t do it on iPhones[…]
See also: Accidental Tech Podcast, Steven Sinofsky, Six Colors Podcast, Mac Power Users, The Verge.
Update (2024-03-25): Jeff Johnson:
Look again at the 1982 US vs. AT&T case.
The issue wasn’t AT&T’s monopoly, which had been allowed for decades. And the issue wasn’t customer unhappiness with AT&T’s service. Rather, the issue was that AT&T abused its monopoly status by requiring customers to lease phones approved by A&T, arbitrarily restricting customers from using third-party phones that could be purchased outright.
Over on Threads, Walt Mossberg has commented on the Apple/DOJ case. First up, if you do not respect Walt’s opinions, you’re a fool. Walt is one of my tech journalism heroes. That said, I think he’s missing a couple of points here.
Walt is correct that the vertically integrated model has been Apple’s since the start. But what is permissible when you’re a small company or in a nascent market is no longer permissible when you are in a position of market power. And no one doubts that Apple is in a position of significant market power, not least Apple itself.
Second, like most people, Walt is being tripped up by the word “monopoly”. The DOJ definition makes absolutely no mention of a percentage: it talks only of “market power”. That’s why the DOJ’s filing is careful to refer to Apple having both market power AND significant market share.
Regarding the antitrust suit: I have been an Apple employee, supplier, and partner. As soon as I sold Big Nerd Ranch, I threw away my iPhone and bought a Pixel because I believe Apple’s power (and thuggish use of that power) is bad for our industry.
App developers, can you imagine how much better things would have been if the App Store had let users do free time-limited trials? Maybe, after trying a good app, a user would have been willing to pay more than $.99.
Negotiations with Apple (our biggest customer) end with “…because we are Apple (and will destroy you if we don’t get everything we want).” Most didn’t say the last part aloud, but Mike Fenger’s team shouted it while renegotiating our role in the Enterprise Partners Program.
Having worked closely with Google, Amazon, Microsoft, and Meta, none use their power as ruthlessly as Apple. I am grateful that the DOJ has stepped in. I’m certain there was a lot of political force trying to prevent the suit.
So, since we have plenty of time, I thought I’d kick off our coverage at MacStories with a look at the DOJ’s complaint and its legal underpinnings, along with some observations on what’s going on and what you can expect to happen next.
Apple decreed that 3rd-party apps could only be installed via the App Store, which would review every app; free apps wouldn’t have to pay anything, while Apple would take 30% of paid apps. This led to an absolute explosion in the market: consumers, who had been scarred by the 2000’s era of malware and viruses, shook off their reticence to install software and embraced the App Store, leading to an explosion of app-based businesses.
This is certainly Apple’s view, but I don’t see a lot of evidence for it. Sandboxing, not Apple’s review, is what should have given consumers confidence. iPhone apps might have been more popular if Apple had allowed Mac-style downloads instead. Certainly, we did not see that sort of explosion when adding the Mac App Store to a platform that already had downloadable apps. It’s not even clear the Mac App Store had an overall positive effect on the ecosystem. People also conflate the App Store with easy installation, updates, and uninstalls, but there’s no reason Apple couldn’t have enabled those to be smooth for non-store apps, too. It’s just that they see no reason to help Pebble now that they’re selling Apple Watches.
Tourist attractions are a poor analogy for owning a smartphone. A better one, if you want an analogy, is something like a really powerful company town compared to a normal city. Everything you can buy and do is filtered through a paternalistic owner, there are seemingly arbitrary rules, and despite all the bureaucracy, it is unwise for businesses to ignore setting up shop there because its residents seem to spend more money.
People make all kinds of trade-offs when they buy something as complex and convergent as a smartphone, and it is difficult to know how much of that is a fair vote with their wallet and how much of it is a side effect of the platform owner’s impositions.
We saw this play out before the iPhone 6 was introduced. Apple still sold plenty of iPhones even though its models had smaller displays than competing products, and it was unclear whether people were buying iPhones because they were small or in spite of their size. The still-unbeaten unit sales of the iPhone 6 models shows lots of people wanted a bigger iPhone.
[…]
That lots of people buy iPhones is not inherently a vote of confidence in each detail of the entire package. If some of those things changed a little bit — the U.S. government’s suit is not a massive overhaul of the way the iPhone works — I doubt people would stop liking or trusting the product.
Update (2024-03-27): Aaron Tilley and Kim Mackrael:
In its antitrust lawsuit against Apple filed Thursday, the Justice Department invoked its case against Microsoft filed in 1998 and noted that Jobs used to rail against what he viewed as Microsoft’s anticompetitive tactics to protect its dominance in the PC market. Bill Gates has since said the company’s legal fights were a distraction that contributed to Microsoft’s failure to gain a lasting foothold in the emerging world of mobile operating systems.
After so many years of fighting, Microsoft changed tack after settling the case in 2001, promoting Brad Smith to general counsel the following year. In Smith’s pitch to Microsoft’s board of directors to take the job, he presented them with a single slide that said: “It’s time to make peace.”
Such a detente is unlikely for Apple while Schiller remains at the company, said Phillip Shoemaker, who ran the store’s review group under Schiller until 2016. “He’s a brick wall when it comes to these matters,” Shoemaker said. “I just don’t think he’s ever going to leave.”
[…]
One thing Jobs insisted on in the App Review process is that the company should always have someone reviewing each app that made it into the store. Schiller continued that tradition, eschewing excessive use of artificial intelligence in favor of reviews and careful curation [sic].
Previously:
Update (2024-05-21): Juli Clover:
Apple today filed a pre-motion letter seeking to dismiss the antitrust case that the United States Department of Justice (DoJ) levied against Apple back in March.
In the pre-motion letter, Apple says that the government’s lawsuit is flawed in multiple ways, and has not successfully alleged that Apple is a monopoly power in the relevant market, proven anticompetitive conduct, or demonstrated consumer harm.
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> The smartphone revolution was so successful that the product has become table stakes for modern life. When everyone needs mobile Internet and app access, and the barriers to entry are astronomical, it makes more sense to think of iPhone/iOS as an electric company or an ISP than as a more powerful Nintendo Switch.
Well said.
While some elements of this suit seem to have merit, in terms of benefit to consumers/developers I think the intent and focus of the EU DMA was clearer.
> but it may prove useful in revealing information and in shifting public opinion
I think Jason Snell put it best (paraphrasing him) that the government is essentially attacking a product people actually really like. This isn't DOJ v Microsoft, where everyone used Windows because they had to at work and it was nearly the only thing OEMs sold, but meanwhile most people didn't really like it.
Especially given the lackluster filing and the odd choices they made on what to go after specifically, I don't think this ends up moving general consumer opinion that much. Which is problematic, as de With says:
> an ignorant, pointless exercise which will likely hamper making meaningful laws that help us as users.
The fact that this includes WatchOs, Home, and CarPlay makes me nervous that this is politically motivated more than it is well thought out. I do hope that this forces a compromise that makes iOS more like the Mac osX of a decade ago, which seems like it would be far better for the user long term. Unfortunately, stock growth is tied to services.
ProfessorPlasma:
If it's true that Apple required control of the dashboard to keep CarPlay that is behaviour that isn't just potentially monopolistic but it is potentially dangerous. I am not at all comfortable with the trend towards in-vehicle user interfaces moving away from safety towards entertainment. If we had competent governments they would have put a halt to touchscreen only UIs ages ago.
@Kevin Yeah, that’s a great point from Snell. I would say that Apple has arguably been more anti-competitive than Microsoft ever was, but its products are better; the latter matters a lot even though maybe it shouldn’t, legally. I think people should be more upset, but the nature of the harm is such nobody can really see the world that might have been.
Apple doesn't have a monopoly on the mobile smartphone market. Apple has a monopoly on the iOS software market by taking a cut of everyone else's work and forcing competitors to play at a disadvantage (see various streaming apps that compete with Apple). Currently that seems to be legally okay (I'm not a lawyer) as it is considered "their platform" but IMO if you sell a general purpose computing device not allowing *anyone* to make software without their approval doesn't feel right.
If Apple just doesn't like my app because they want to make it themselves they could just reject it from the App Store, or allow it on the App Store and shadow ban it from search, rip it off and then present a clone of it at the next WWDC (Apple's search is terrible but I think that's because they just suck at it but who knows?). I'm not saying they actively do this, but I am saying that they have too much power.
Like other have said, I suspect this lawsuit won't force meaningful change but I do think governments will do something, *eventually* though they are outgunned by Apple's legal team intellectually and I have no confidence in Merrick Garland.
It would be great if Apple would just stop being so greedy on their own because in the end I think we'll end up with some ridiculous laws that makes things worse for almost everyone involved including Apple (see EU's DMA for reference).
The argument that pro-Apple folks have always wheeled out, is that Android is the majority of the *Smartphone* market, so it's impossible for any form of Antitrust or Monopoly law to apply to Apple.
World-wide regulators are very consistent that they don't see Smartphones as a single market, rather that iOS is *a* market, and Android is *a* market, etc. Competitive regulation within those markets, especially when the platform vendor also competes with independent companies in utility applications, cloud storage services, content vending etc, is enough to bring regulatory action.
Always funny to see that coverage partisanship maps perfectly to the media folks who need to be on Apple's good side, with the access it provides, to meet their mortgage payments.
The crazy thing is that this all would’ve ended years ago if they had just let apps put buy buttons that charge 5%. Yes there’s lots of other stuff but half the energy is hung up about that one thing
From John:
"Completely backwards. Superiority is exactly what made the iPhone what it is — superior hardware, superior software, superior integration."
John Gruber Try-Not-To-Be-An-Apple-Stan Challenge [IMPOSSIBLE]
Would it be rude if I started calling him John Goober? Because he's Goobering for Apple in every quote I see on here.
Good take full of good stuff: https://www.thebignewsletter.com/p/why-the-apple-antitrust-suit-matters
"to look at the Apple suit in isolation and ask, as many are, why go after the iPhone, which most people like, instead of addressing more important things, is to miss the bigger picture. Enforcers are dealing with food, medicine, housing, and travel. But they are also going after the titans of industry, which includes Apple."
"Apple’s own materials revealed in the complaint make the point even clearer. In one presentation to the board of directors, Apple highlighted the “[u]ndifferentiated user experience on [a] super platform” as a “major headwind” to growing iPhone sales in countries with popular super apps due to the “[l]ow stickiness” and “[l]ow switching cost.” It’s all about the switching costs."
[..]
"The result is that Apple has monopoly power over not just how much we pay for smartphones, but over virtually every use of our smartphone and by extension everything that smartphone comes to touch, whether that’s business software applications, digital wallets, cars, or games. In China, Apple has to compete on price and quality, because switching to different phones is easy. In the U.S., Apple sets the price, because switching is hard. The complaint by the Antitrust Division lays out the tactics Apple uses to do so."
@Sigh Gruber and the DOJ are kind of talking about different things there: what made iPhone vs. what maintained its status. And I think Gruber does have a point: the anti-competitive behavior wouldn’t have worked if Apple didn’t start out with a good product, nor would it work if iPhone suddenly became really terrible. If the DOJ has to prove that the determining factor in iPhone’s continual success was the exclusionary behavior that is a really tall order.
I am an Apple customer and, while I have a long list of complaints against Apple and their products and services, I don’t see any competing products or services that I am remotely tempted to switch to.
What keeps me from switching is the dramatically lower quality of competing products and services, and or their associated business models revolving around surveillance capitalism, not any “lock in” on the part of Apple.
While competitors and third-party developers may be harmed by some of Apple’s business practices and might benefit from these government legal actions, I don’t see anything good coming out of this from the consumers’ perspective.
@Freediverx Good points. And you have to be careful reading what some of the pundits post, many of whom write as if they are presenting an "everyman" perspective. I still maintain that iPhone users (who are not 3rd-party developers for iOS) care very little about any of this.
@MichaelTsai Bearing in mind that Apple was already convicted of violating antitrust law in 2013, so this is a repeat offender being accused of failing to reform its ways after a prior conviction. Whether or not Apple's behaviour was the contributing factor in the iPhone's sucess (and the Appe Watch's success, and Apple Pay's success, and the success of every product and service Apple makes which has a privileged integration with any of their other products) may be less important than the behaviour itself being illegal.
Apple were still convicted of breaching antitrust law for conspiring to fix the price of eBooks, even though the plan failed in its goal, and Amazon remained the dominant player in eBooks.
No. You can't declare that a single product (iOS) is its own market and then accuse the product maker of having a monopoly.
@DJ That's literally what is happening around the world, because Apple is using its ownership of the market (iOS) as a whole to create or maintain a monopoly in something that exists *within* the market - Storefronts for selling and distributing applications, biometrically secured NFC wallet applications, web browser engines, etc.
Ironically, if Apple had not spent so much effort on breaching competition law, as revealed by the emails they were forced to divulge in discovery during the iBooks case, and had allowed the iPhone to have less or no platform lockin from apps like iMessage being iPhone-exclusive, the smartphone market might have actually been a single fluid market from the regulators' perspective.
But you know, that whole "evil containing the seeds of its own destruction" thing - Apple acted to keep iOS segregated from Android with potentially illegal tactics, and now they have to wear the consequences of iOS being considered a separate self-contained market.
That only leads to a least-common-denominator market. I want an iPhone because it is better, not because it is the same, or better at being the same.
iOS is not a "product". It's a platform.
If Apple treated it like a product, they'd sell it, and not tell anyone else what to do with it.
If I buy a truck, "a product", I don't have to ask permission from the manufacturer to "add a trailer" to it.
>No. You can't declare that a single product (iOS) is its own market and then accuse the product maker of having a monopoly.
iOS software is not a single product. Software written for iOS cannot deployed on any other device (except Mac which Apple also controls). Apple has the only iOS store and you can't just deploy your iOS app somewhere else. There is only one App Store for iOS apps. It literally is a single market.
@DJ why would a choice of app stores on iOS mean you didn't have the same experience you have now, if you chose to keep getting your apps from Apple's store... unless of course Apple refuses to make its store price and service competitive with other distribution channels, and developers abandon it.
Which makes it even weirder that apple are resorting to abusing their control over the phone to create lock in and switching costs. I'm 100% certain that they could compete on fair terms with other smartwatch makers, app stores etc. Instead they cling on to outdated cables and crappy interoperability for basic things like sending images. It's as if they don't have confidence in their own product.
Just now I sent a screenshot to my dad who has an iPhone. Then I remembered that apple will turn it into a mushy mess just because they can, so I had to transcribe the information and send it as text.
At the office we discussed how to best prevent children from downloading all the crappy scam games that are pushed through ads in all the other crappy scam games. An app-store with child-friendly games, maybe by Disney as someone suggested, would definitely have a market but apple are blocking it. And it's not like people would ditch the apple app store just because there were some niche alternatives. Most people wouldn't care. But apple do. Very much.
You don't need to have single majority to wield abusive power in a marketplace and that's what this is about.
I think RCS will solve a lot of those interoperability problems with messaging. Right now, it's limited by SMS.
I've never felt "locked in" with Apple. If Android's ad-based ecosystem offered a superior experience, I would switch. It doesn't, so I don't.
No doubt there needs to be better control over what can go into a children's app. I don't think separate app stores should be required for that, though admittedly I haven't put much thought how that could be solved.
>I've never felt "locked in" with Apple. If Android's ad-based ecosystem offered a superior experience, I would switch. It doesn't, so I don't. No doubt there needs to be better control over what can go into a children's app. I don't think separate app stores should be required for that, though admittedly I haven't put much thought how that could be solved.
Right but you're only one person. Does Apple have a monopoly on the iOS software market and does that hinder competition and hurt customers? Of course it does.
Can Amazon compete with Apple fairly when it comes to ebooks on iOS? The answer is no. I don't think the answer to that question is no on virtually any other computing platform.
The whole idea that iOS (platform, product, whatever) is its own market is just wrong. The market for iPhones is 'smart phones', just as the market for Macs is 'desktop computers' and not 'macOS computers', and the market for Porsches is 'cars', not 'Porsche cars'. If I buy a Porsche, I don't expect to be able to swap in the front quarters from a Buick.
@DJ: Platforms are their own market, whether you like it or not.
That's what literally what the App Store is: a market, a place where the exchange of services and goods occurs.
If I build an App on iOS, my competitors are not applications running on Windows or Blackberries. Those are different incompatible platforms which have different customers, and I cannot offer them anything of value because the app I wrote only works on iOS. Since I am not providing them with anything of value, no exchange of services and goods will occur. Since no market transactions will occur, they are not part of the same market.
A platform is an environment in which software executes. Software only runs within a compatible platform because software is only a very long number. The platform knows how to decode that very long number into the behaviors that were intended by the software's author. The same very long number would result in very different behaviors on a different platform. (It would crash).
In the case of Porsche, you are in the same market as Buick: customers who might buy a Porsche might also buy a Buick. If, on the other hand, you wanted to sell a train locomotive, you'd not be in the same market. People who want to drive on roads don't buy train locomotives because those need rails. Just as roads and rails are different, and result in different markets, so it is with iOS and Android, as far as apps are concerned. Just as trains and cars constitute different markets, so do iOS and Android. And it doesn't matter how much you scream "but they are just different means of transportation".
Nope, iPhones and Android phones are 'smart phones'. They are both 'brands', and they compete in the 'smart phone market'. Porsche and Buick are automobiles. They are both 'brands', and they compete in the 'automobile market'. I don't know how much simpler it can be.
I put off switching to Android because of all the stories. Android is slow, Android has terrible battery life, Android is full of malware and Ads.
I got so frustrated waiting for Apple to fix bugs that affected me on a daily basis, upgrading every year, only to find more things that no longer work. So I did it, and I'm glad I did.
At first I wasn't sure about it at all, I mean it does everything the same, it even kinda looks similar in places, but it wasn't iOS.
Performance. If you watch enough comparative reviews, you'll see Snapdragon chips trade blows with Apple's A series, A series better here, while SD better there.
Battery life... I have a two year Zenfone 9 and I charge it every 3 days. I had to use it extensively yesterday, and got home with 50% battery (it stated at 90%).
Malware. I've not encountered any in the 3 years I've been using Android. I'm not saying there isn't any as Google regularly reports how much crap they remove from their Play Store.
Ads. I'm pretty certain that if you buy a $100 Android phone, you're going to get Ads to subsidize the cost, but I've never seen an Ad in the last 3 years (both of my phones have been Asus).
I would recommend anyone who's slightly interested in switching, to try it themselves. Manufacturers sell refurbished devices, so you can score a 2 or 3 year old model for cheaper and still get a warranty.
@DJ It doesn't really matter what your logic is for why iOS should, or should not be a market unto itself, or should be part of a larger meta-market of "smartphones", the fact is multiple competition regulatory jurisdictions world wide have ruled that iOS *is* a market unto itself, and that Apple's behaviour is going to be judged in that context.
> The whole idea that iOS (platform, product, whatever) is its own market is just wrong. The market for iPhones is 'smart phones', just as the market for Macs is 'desktop computers' and not 'macOS computers', and the market for Porsches is 'cars', not 'Porsche cars'. If I buy a Porsche, I don't expect to be able to swap in the front quarters from a Buick.
A market is a place where goods and services are sold (like the App Store where software is sold for real money). A porsche is a car and as far as I know there isn’t an App Store built into the dashboard so I don’t really understand your analogy at all? Software created by third party devs are not car parts so I don’t get your point about swapping parts from a Buick in a Porsche. If you create a marketplace you have a market. As far as I know Porsche doesn’t have a developer program or App Store but you can get new tires from anywhere you want.
No other general purpose computing platform is as locked down as iOS. Apple has 100% control of app distribution on iOS and demands revenue sharing for every install. Whether the existence of Android is enough for this to not be considered a monopoly is something for courts to determine. IMO if it is not considered a monopoly i think our laws need to be updated for the digital age.
@DJ what do you men by Android ad based echo system?
I see more ads on my MacBook, the constant Hey, get iCooud, nagging mostly, but also Get, turn on time machine!
There are some ads in the Google news feed I guess. It's that what you meant?
Either way, of Apple shared your confidence in their superiority they wouldn't be so he'll bent on increasing switching costs and lick in.
It has taken a lot of pressure(outside of China naturally, in China Apple complied in the blink of an eye) to get Apple to consider RCS
A feature that will improve the experience for their own users. But, as Gruber put it "Apple puts themselves first, and their users second"
>I wish Congress had passed better laws
Yep. (Well, from a EU perspective, more like: I wish we’d learnt more lessons from the ca-2000 Microsoft legislation on how to regulate platform companies.)
>and that Apple hadn’t acted so badly.
Indeed.
But also:
>Defining the iPhone as a monopoly when it has somewhere around 55 percent market share in the U.S. is obviously the first thing the DOJ needs to prove.
I’m with Gruber here. The market is “pocket computers that can also make phone calls”, not “computers that run iOS apps”.
But I also, not being a lawyer and certainly not a US lawyer, I find this focus on “monopoly” silly. It’s about _market dominance_, and Apple and Google form a _duopoly_ that essentially controls the market and dictates the terms, much like Windows formed a quasi-monopoly and did twenty-five years ago.
And _that_, coupled with _this_:
>The smartphone revolution was so successful that the product has become table stakes for modern life.
Is where the problem lies. Squibbling over “is it a monopoly” is besides the point; “does Apple wield a significant amount of control over our lives” and “should the state, therefore, exert some regulation” are the questions, and I think it’s fair to answer them with “yes”. (Leaving aside for a second that the US Congress seems institutionally incapable of passing laws.)
I’ve started listening to ATP’s take, and it’s funny how I go from nodding in agreement to rolling my eyes in disagreement, back and forth.
For example!
They argue about the Watch thing. If I were the DoJ, personally, I’d have picked AirPods as the better example, but Watch works as well. I own an Apple Watch and AirPods Pro 2, and am reasonably satisfied with them.
Now, some of that satisfaction comes from tight system integration, which on the _one_ hand is a sign of Apple’s software+hardware engineering success, something they get to be proud of, and something that’s classic Apple “it just works” (except when it doesn’t). Yet on the _other_ hand, they don’t _just_ integrate the pieces of hardware. They don’t _just_ make private APIs to make that possible for themselves. They then _also_ lock down the system so that third parties _cannot_ make equivalent APIs for themselves, except for on the Mac, and even there, decreasingly so.
A company like Samsung or whatever _can’t_ decide “let’s make the Gear Watch Whatever and Gear Beats Boomboom and make them integrate just as well or even better on iOS as the Apple Watch and AirPods do”. Apple argues this — Samsung being unable to make a GearBackgroundService that does things like detecting when your device comes near, offering to pair, switching music to it, all those things — is in part for privacy and security, and that’s not entirely wrong, but it _also_, insidiously, reinforces Apple’s market position by creating platform lock-in, and providing a free flow of additional mutual revenue. AirPods go old? Time for new headphones. Oops, can’t shop elsewhere because you have an iPhone. iPhone goes old? Time for a new phone. Oops, no alternative unless you also want to give up on the same level of headphone experience, or replace them as well.
I’m a bit frustrated that the ATP folks can’t see this problem. Is it a huge problem in the grand scheme of things? Perhaps not. Is it one where requiring Apple to provide APIs that are at the same level as their own integration, and/or requiring them to offer an opt-in entitlement where a third party could make such a service would help? I think so!
And I’d probably _still_ buy AirPods, because I think they’re quite good. But I’d do so more happily, as I’d feel less compelled to.
@DJ "iPhones and Android phones are 'smart phones'. They are both 'brands', and they compete in the 'smart phone market'. I don't know how much simpler it can be."
Right, but I don't sell "smart phones", I sell "smart phone apps". I don't compete with Apple, Samsung, ... which sell similar hand-held mini-computers.
To customers using an iPhone I can only sell iOS apps. And I would need to learn a new programming language and write code for different APIs to be able to develop an app that I could sell to customers using an Android phone. Even you should see that those are not the same customers - thus these are different markets which do not overlap.
@Sören > I’m with Gruber here. The market is “pocket computers that can also make phone calls”, not “computers that run iOS apps”.
If you are a hardware manufacturer that creates pocket computers, yes. You can sell a compelling phone to all people world-wide.
If you are a software developer, no. The markets for iOS apps and Android apps do not overlap - you cannot sell 1 product to the same customers. iPhone owners will not buy Android apps, and Android owners will not buy iOS apps. And while neither Google nor Samsung or any other company has a monopoly for Android app sales (you can offer your app e.g. in the F-Droid or Amazon store), Apple clearly has a monopoly in the iOS app market, since you can only offer your software to iPhone users in the AppStore. Apple is the gatekeeper everyone must pay who wants to sell software and digital goods to people that bought an iPhone.
>If you are a hardware manufacturer that creates pocket computers, yes. You can sell a compelling phone to all people world-wide.
If you are a software developer, no. The markets for iOS apps and Android apps do not overlap
This suggests to me "operating systems are bad, actually". Who knew the developers of FreeBSD are monopolists?
Apple's behavior isn't problematic because iPhones don't run Android apps. It's problematic because people rely on effectively one of just two choices. Not owning a phone is impractical.
This would all be less of a problem if more smartphone platforms existed. Firefox OS, Maemo, whatever. But they don't, because software developers would rather that consumers have even _fewer_ choices to run software on. Regulators _could_ flip that entire logic around and mandate that commercial software exist on at least three platforms. Then, companies like Apple and Google would've had less market power.
Instead, they've learnt bupkis from 2000.
>The markets for iOS apps and Android apps do not overlap - you cannot sell 1 product to the same customers. iPhone owners will not buy Android apps, and Android owners will not buy iOS apps.
Does compatibility a market make? Is "cupboards that happen to fit in the space in the corner of your living room" a market? Because by your argument, they should be, since you aren't going to buy a cupboard that's too large to fit.
Segments aren't the same thing as markets.
As cupboard manufacturer, it's easy to create smaller and larger cupboards - same material, same tools, same knowledge. But you wouldn't start building car seats - different materials (APIs), different tools (IDEs), different knowledge.
Of course, almost all market segmentations are artificial, but when you have hundreds of millions of customers clearly divided into two camps then it's inevitable these are different markets, not only segments.
Now Apple itself argues, that iPadOS is a different market than iOS, and requested the EU not to treat them as gatekeeper for iPadOS. IMHO that would make a perfect case for a segment, since here developers use the same APIs, the same tools, the same knowledge to build apps for pretty similar devices where the most significant difference is just the screen size. We'll see how this plays out...
@Mark +1
IMO if you have a platform with a store that sells software that can only run on your platform you have a software market and a monopoly on that market. Having a monopoly is only problematic *if* you control every aspect of distribution and use it to disadvantage competitors and harm customers (I think size of the platform matters so I don’t think whatever is happening on FreeBSD or some obscure Linux distro with a few dozen developers really matters). Software platforms really aren’t comparable to cupboards. There are plenty of woodworkers out there that can build a cupboard of any size. Not really the same thing as spending years writing a complex iOS app that you just can’t take with you if you don’t like how Apple is treating you as a partner.
It is not clear to me whether DJ does not understand how smartphones are unlike cars or has deliberately chosen a bad analogy in order to provide a folksy justification for a defense of Apple in the same way that orthodox neoclassical economists use the fallacious “household budget analogy” to gull the groundlings into believing that fiat currency issuers face a solvency constraint with respect to debts denominated in their own currency of issue.
>IMO if you have a platform with a store that sells software that can only run on your platform you have a software market and a monopoly on that market. Having a monopoly is only problematic *if* you control every aspect of distribution and use it to disadvantage competitors and harm customers (I think size of the platform matters so I don’t think whatever is happening on FreeBSD or some obscure Linux distro with a few dozen developers really matters).
And the reason "size of the platform" matters is because _platforms_ are the real market there. It's when few vendors control the platform landscape that this becomes a problem. That's why, even though some people argued even back to the 1990s that the Mac is a monopoly, it doesn't really matter if you feel that way or not, because the Mac was never the dominant choice. Windows was. Whereas, with Android and iOS, iOS has enough clout that you pretty much _have_ to serve those customers if you're doing a smartphone app.
So I don't disagree with that part; I just think "a software platform is a market" is too facile an argument. The problem is that Apple and Google together control basically the entire smartphone ecosystem. If they didn't, Apple could be as restrictive as they wanted to be.
>It is not clear to me whether DJ does not understand how smartphones are unlike cars or has deliberately chosen a bad analogy
The problem is that there _aren't_ a lot of good analogies out there.
If we're gonna stick to cars (which I'm not sure we should), then this is more like Ford only approves certain roads and gas stations, and GM approves _other_ roads and gas stations, and if the roads and gas stations want to operate at a profit, they have to pay Ford a cut. Maybe. Something like that. Meaning: it's not really about car _accessories_, which are largely optional, so much as it is about _near-essential_ portions of owning a car. You _could_ buy an iPhone and never install an app, but almost nobody does that.
There is no need to use analogies at all. We all know what Apple are, how an app marketplace works etc. This is not complicated at all.
Dump all the failed analogies and just write plainly about things we're all familiar with.
Like how Apple won't approve Spotifys latest update, or tell them why.
Like how Apple sometimes let things through, and sometimes don't.
Like where the expression Sherlocked came from and why.
Like how no one is talking about forcing happy Apple users to change to a third party app store.
Or how Aple can force you to update a perfectly fine app to follow some new graphical guidelines. Etc etc.
Or how they want to charge a fee, and get acces to your book keeping, for things you sell on your own marketplace with your own payment system.
And it's not about dragging Apple down to the same level as everyone else (the latest in a line of stupid arguments). It's about apple letting others build at the same level as they are. Which is perfectly possible
ANYONE can make headphones that integrate well with a system that they have access to. Same for tap to pay etc. Apples magic sauce is the fact that they've put up an artificaila barrier that no-one is allowed to cross.
>There is no need to use analogies at all.
I disagree, especially for the US. I'm with Siracusa on that — they don't _quite_ have the right law to fit this behavior.
>This is not complicated at all.
Oh, I think it's _very_ complicated, and as evidence, I'll bring
- that Michael's article has 2,500 (mostly quoted) words
- that the EU wrote a big piece of new legislation
>Like how Apple won't approve Spotifys latest update, or tell them why.
Right, but there's no all-encompassing "a corporation may not act capriciously" law. It's only once you factor in the amount of power Apple wields that this even becomes legally relevant; take that away, and all you have is "some Apple customers are unhappy with Apple's behavior".
I meant that the reason why the DOJ opened the case, and why Eu has created the DMA/DSA is not complicated at all. The suit and the law are complicated, but why we need them isn't.
It's enough to list the number of abusive things apple are routinely doing, and like you say, point to the power apple have.
Funilly enough I haven't seen any mention of the draconian contracts they make network operators that want to sell iPhones sign.
Anyway, I find the reaching for ever weirder analogies to explain apples power and abusive use of said power completely unnecessary.
