If a platform is a railroad, as the House antitrust subcommittee argues, the App Store may be a goner.
From Mike Peterson’s “US House approves report accusing Big Tech of monopolistic behavior” posted Thursday on AppleInsider:
The U.S. House Judiciary Committee has formally approved its report that accuses Big Tech companies of engaging in anticompetitive practices to maintain market power.
After a monthslong investigation into market power in the technology industry, the House Judiciary antitrust subcommittee released its report in October 2020. The report called the power of Big Tech “monopolistic” and recommended sweeping changes.
On Thursday, the House Judiciary Committee voted 24-17 along party lines to formally approve the report, according to Reuters. As a result, the more than 400 pages will become an official committee report and a blueprint for legislative action.
From that report (as quoted last October by AppleInsider):
It concluded that “although these four corporations differ in important ways, studying their business practices has revealed common problems.”
First, each platform now serves as a gatekeeper over a key channel of distribution. By controlling access to markets, these giants can pick winners and losers throughout our economy. They not only wield tremendous power, but they also abuse it by charging exorbitant fees, imposing oppressive contract terms, and extracting valuable data from the people and businesses that rely on them. Second, each platform uses its gatekeeper position to maintain its market power. By controlling the infrastructure of the digital age, they have surveilled other businesses to identify potential rivals, and have ultimately bought out, copied, or cut off their competitive threats. And, finally, these firms have abused their role as intermediaries to further entrench and expand their dominance. Whether through self-preferencing, predatory pricing, or exclusionary conduct, the dominant platforms have exploited their power in order to become even more dominant…
Apple and Amazon were examined for their marketplace dominance. The subcommittee found that both exerted monopoly power in their respective online marketplaces — Amazon’s retail site, and Apple’s App Store— and introduced rules meant to squash competition in those marketplaces.
“To put it simply, companies that once were scrappy, underdog startups that challenged the status quo have become the kinds of monopolies we last saw in the era of oil barons and railroad tycoons,” the panel said. “Although these firms have delivered clear benefits to society, the dominance of Amazon, Apple, Facebook, and Google has come at a price.”
My take: Saw this one coming.
CORRECTION: An earlier version of this item presented the AppleInsider report from last October as if it were today’s.
On your photo tag line. Shouldn’t the apologies be going to TIm Cook?
1. A lot of the trustbusting was not against a single railroad, but rather against coalitions of railroads to divide traffic between them and/or to set rates for traffic. This was the specific mechanism that Rockefeller used. First he captured the refineries. Then he tied up the shippers (railroads, pipelines), a lot of that with secret rebates. THEN he went to the individual producers and said, “Sell out to me, or you’ll have no way to get your product to refineries, and no refineries that will accept your product.”
2. But ICC did get legal authority to look at what each railroad (in isolation) charged shippers on that line. The key part of that regulation was not price fixing, but price -transparency- (no hidden rebates.)
The House report assertion of ‘picking winners and losers’ has some serious problems. But Apple’s behavior for its own apps vs others does show some validity for those claims -where Apple competes-. Of course, Apple could be placed under additional restrictions, or even prohibited from competing. (It’s a bit tough to make that argument from a consumer savings perspective if the Apple apps cost $0.)
As they say here… nothing to look at.
If Apple had only 10% of the smartphone market, would Congress be making anti-trust noise with the app store? Of course not.
Congress has much, much bigger targets with Facebook, Google and Amazon.
If Apple’s business practices are wrong, then they were wrong when Apple established the App Store more than 10 years ago, especially as it relates to Apple’s pricing.
Apple’s App Store is dominant not because of its practices, but because of the consumers it targeted. The CONSUMER made the choice to buy an iPhone, a product priced significantly higher than the competing smartphones that came AFTER it. They bought, not because of the price, but because of the benefits competing smartphones could not duplicate.
Apple’s business and business model is vastly different from the businesses and business models Congress has lumped together with Apple.
If, and I say IF a Congressional ruling results in an anti-trust complaint against Apple, this will go to the Supreme Court.
Now Congress can make a patently -unfair law-, but that doesn’t make it Unconstitutional. And the Supreme Court’s basis for invalidating laws is Unconstitutionality (not “fairness”.)
That article is dated “By Mike Peterson | Oct 06, 2020”.
Which begs the question:
Why is it being regurgitated by AppleInsider’s crack team of naysayers and Apple haters now?
Let me guess, the pandemic made ’em do it.
I see this as an outright lie by the sub committee. They have some points but software has never been cheaper to consumers especially when adjusted for inflation.
1) They like purple prose.
2) They think that iOS and Android are public commons.
3) They view App Stores as being like credit card processor who charge 3% not as platforms / market places.
4) They see iOS and Android much like old (long ago) regulated telephone monopolies.
The last point is laughable if one recalls their prices for messaging, ringtones, etc.
In 1987, QB was $100, MS Macro Assembler was $500 and MS C was $700. In 1990, I bought Watcom C for the Amiga for $300. Borland brought some much needed competition but the price of XCode (free), Visual C (free), gcc (free) simply can’t be beat.
I think people forget Apple uses AppStore proceeds to develop things like XCode, LLVM, Clang and dozens of amazing tools.
I just checked ride sharing:
“Overall, Uber took a 35% cut of rides, and Lyft took 38%. Studying only the receipts sent in by drivers who kept records of all their rides over given time periods, the average takes were 29.6% for Uber and 34.5% for Lyft.”
No driver will reach $1M annually. Apple takes 15% for revenue under $1M annually.
The path from recommendations to actually writing and then passing new laws and then tests in courts is long.
First: How to write sweeping changes that are NOT specific to one company or another?
Unless you were trying for a Monty Python look….
Also, they’re still ignoring the elephant in the room; personal privacy. NOBODY does that better than Apple, and whatever they come up with had better not threaten that or they’ll have a mass mutiny on their hands.
Continue…
What I described above is similar to Bill Clinton’s Labor-management Partnership Council in the federal government where Union representatives worked in “partnership” with federal senior management leaders to address workers’ concerns & issues. It was Congress who established the Labor-management Partnership Councils (LMPC), so I believe a similar arrangement by Apple emulating the federal process may be well received on the Hill.
Rockefeller used to offer the owners of pipelines, derricks and refineries 2 payment options: stock shares or cash. Those who took the shares (and the risk) became immensely wealthy over time. That’s why I always signed up for ESOPs, even while earning a low salary. My mother taught me that owning even 1 share makes you one of the owners of any public firm. When I started acting like an owner in meetings management loved my perspective and quickly promoted me.