The Apple-Google hearings through Stratechery’s filter

“First off, this was one of the best and most entertaining tech-related Congressional hearings I’ve ever watched.” — Ben Thompson

From “App Stores in Congress, Apple’s Arguments, Meta Points” posted Thursday to Stratechery subscribers:

First off, this was one of the best and most entertaining tech-related Congressional hearings I’ve ever watched. If you have any interest in App Stores it is well worth your time to watch the entire thing; a link on YouTube is here.

Two things made this hearing so informative. First, lawmakers were by-and-large very well informed; consider Chairwoman Amy Klobuchar’s opening statement…

I know there isn’t necessarily anything new here to most of you, but it’s important — and heartening — to see Congress get some important realities about the App Stores right: that there are some things you can do with apps that you can’t easily do on the web, that the iOS App Store is not competitive with the Android App Store, because it is unrealistic to expect consumers to switch phones, and even what side-loading is and how Apple and Google differ in this regard…

The biggest takeaway, though, was the complete unanimity on the subcommittee that Google and especially Apple were in the wrong. Senator Richard Blumenthal spoke for both sides of the aisle with this observation (transcript mine):

I’m tempted to say that Google and Apple are here to defend the patently indefensible. If you presented this fact-pattern in a law school antitrust exam, the students would laugh the professor out of the classroom. Because it’s such an obvious violation of our antitrust laws.

My take: A smart, well-curated tour through a three-hour hearing.

See also: Apple in the hot seat

22 Comments

  1. Gregg Thurman said:
    See my post regarding third grade graduates, substituting politicians for journalists.

    Congress can do better than this, unfortunately they are blinded by the opportunity to get before a camera.

    5
    April 22, 2021
  2. Fred Stein said:
    Ben Thompson lost all respect.

    He asserts legal expertise without a law background.

    11
    April 22, 2021
    • Alan Birnbaum said:
      Those who can, do. Those who can’t, teach. Those who can’t do or teach opine or run for Congress.

      1
      April 22, 2021
  3. Thomas Larkin said:
    I studied Antitrust law and I call BS. Mr. Thurman is right. Mr Wyden is wrong, and that sort of blanket, knee jerk declaration is just more political theatre.

    10
    April 22, 2021
    • Thomas Larkin said:
      Oops, meant to say Blumenthal.

      1
      April 22, 2021
  4. David Emery said:
    IT ALL DEPENDS ON THE LEGAL DEFINITION OF THE MARKET. If Thompson didn’t start with, or end with, that principle, he missed the boat.

    4
    April 22, 2021
  5. Nonsense and ill-informed comments throughout a Senate hearing with no clear agenda other than raiding the tills of successful firms. Google Rep advised them ‘not to damage app ecosystems that have brought so many benefits to so many people.’
    Senator Klobuchar mentions that a major furniture store chose not to have a presence in the App Store because they did not want to pay the fees. Unheard, 85% of all furniture is sold in show rooms like Ikea.
    I don’t set up my bee products at one particular festival because I think $250 + a percentage of my till is too much. The festival does not allow vendors to sell whiskey or adult toys to minors. Vendors who violate a long list of rules can have their displays removed without notice. Many vendors sell more at this huge festival than at any other event all year. Most years the couple that runs the festival net $350,000 after charitable donations are doled out. Should the vendors join together and sue the festival’s management for their onerous rules and vendor fee structure? I can hear one judge thinking how quickly she would toss that case out of her court room.

    10
    April 22, 2021
  6. Gregg Thurman said:
    “And I hope the Justice Department is [listening] too,” Klobuchar replied.

    Could it be that Justice has a different slant on Klobuchar’s “investigation”?

    1
    April 22, 2021
    • Thomas Larkin said:
      Another excellent observation IMHO (and I voted for Klobuchar).

      1
      April 22, 2021
    • David Emery said:
      It’s a funny thing about the Justice Department. Unlike Congressional investigations and speeches, they’re obligated to actually follow the law (as written by Congress) and in their trials, to follow the rules of evidence. A lot of what passes at Congressional hearings would be thrown out by any judge as hearsay or ‘not a finding of law.’

      4
      April 22, 2021
      • Remember, it was the DOJ’s antitrust division that successfully prosecuted Apple in the Amazon Books case. If I learned anything from covering that trial it’s that analogies are a dime a dozen and that the history of antitrust precedents is rich with contradictions and open to multiple interpretations.

        Also, as David Emery reminds us, it all depends on how the relevant market is defined.

        0
        April 23, 2021
  7. Greg Lippert said:
    What is going on here? I’m no lawyer but have played one on TV….
    – App makers set their own prices (even free)
    – The fee is in line with industry standards
    – As long as you play within the store rules, anyone can sell
    – There are ways around the fee, (see Netflix, Amazon)
    – They are not a true monopoly (android alternative, small market share)

    Breaking up monopolies are designed to protect consumers but opening the App Store hurts consumers (privacy, ease of use).

    Is the App Store hurting consumers? Are they paying more? I think the answer is no.

    1
    April 23, 2021
  8. On April 13 Chinese regulators summoned reps from 34 of their largest Internet firms to a hearing. They were told they have 30 days to self-inspect and curb anticompetitive behavior. Apple was not called to that meeting. Alibaba was hit with a $2.8 billion fine. I may be premature or China is simply letting US regulators/Congress have a go at Apple. Apple vendors do employ 500,000 people in China, maybe more.

    0
    April 23, 2021
  9. Wyatt Counts said:
    I wonder, if as a country we want to kill our golden goose, or geese. You could perhaps make the argument that Apple or Google have attained a market monopoly. But these are world markets and they’re our monopolies laying golden eggs. Careful what you wish for.

    0
    April 23, 2021
  10. Steven Noyes said:
    Amy Klobuchar’s opening statement was an embarrassment and is proof ideas possess her rather than her having ideas. In an interview a couple days ago she stated:

    “ The 15% to 30% tax is such a whopping amount of money that the companies are charged for advertising on the app store,”

    Tax? Tax? Tax? This is mindless rhetoric from an ideologically possessed individual. She blatantly lied by use the word “tax” and not “commission”. And it is NOT for simply “advertising” on the AppStore. Two blatant lies.

    She is very uninformed about this issue but so was every Senator from both sides of the isle.

    0
    April 23, 2021

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