Why Andrew Ross Sorkin doesn't think Apple is a monopoly

Not that there's anything wrong with that.

From the transcript of Alex Kantrowitz's "Andrew Ross Sorkin on Meme Stocks, Bitcoin, SPACs, and Elon Musk" posted Sunday on CNBC's Big Technology podcast:

Kantrowitz: So Apple. You don’t think Apple is a monopoly.

Sorkin: I don’t think Apple is a monopoly in the way it’s being argued in the construct of the Epic case clearly. And probably more broadly I don’t think it’s a monopoly either yet. Remember that there’s two pieces. One is, the other thing I remember learning as a child is, being a monopoly unto itself is actually not illegal.

Kantrowitz: It’s the maintenance of a monopoly.

Sorkin: It’s what you did to either become a monopoly or to, quote unquote, maintain the monopoly, as you just said. And so, in the context of the Epic case, for example….

Kantrowitz: Just for context, Epic is the maker Fortnite. Epic sued Apple, because Apple was charging this 30% tax on payments in its App Store. Epic didn’t like it, got kicked off the App Store, and sued Apple.

Sorkin: To me the lesson I learned from my father many years ago is, when you think about any type of antitrust suit, you first have to think about the market. What is the market? In the context of Epic suing Apple, I’ve never thought that they had a great case. I thought that there were other companies that could probably bring a stronger case, because most of Epic’s market, if you will, doesn’t even exist on the phone, that’s not where the majority of the people that are even playing Fortnite. They’re playing it on console. They’re playing on computers. They are playing in other places. Arguing that Apple is somehow a monopoly, is doing some disservice to them. I think once you define the market and say that they’re not a monopoly in the context of Epic, everything else goes out the window.

Look, there are lots of things that came up during that trial, because I listened to it every day on YouTube. I was fascinated by it. There were some very unattractive facts that were brought forward for Apple’s purposes, not necessarily in relation to Epic, but about how they keep a walled garden and what they’re trying to do. All of that. I wouldn’t sit here to defend Apple in that regard. I would just say in the context of the Epic case, I think it’s a very tall hill to climb to win that case. I also think it’s very hard, even in a more broadly to claim that the App Store unto itself is monopolistic in so far as it’s very hard to say that Walmart is a monopoly.

My take: Sorkin's got a point about Walmart -- a point that is frequently made in this space. Doesn't necessarily get Walmart off the hook.

Fun fact: Sorkin's dad is a prominent New York City antitrust lawyer.

12 Comments

  1. David Emery said:
    WIthout that “fun fact”, Sorkin citing his father is merely here-say. Now it’s ‘citing an expert witness.’

    IANAL, but I think Apple does have vulnerability in the ‘maintenance of monopoly’ within the App Store on how it tends to favor its own apps over competitors. But that’s not an issue for Epic v Apple.

    3
    June 21, 2021
  2. Fred Stein said:
    Kantrowitz shows his bias by calling Apple’s fee a tax. He compounds the error by ignoring the 15% fee and zero charge for 85% of App. The free Apps provide 100’s of B$ for the App developers in aggregate and delightful convenience for us users. Every time I’m out of the house, iPhone and Apple Watch help me zero add-on cost.

    In the same sentence, Kantrowitz says, “Epic didn’t like it, got kicked off the App Store,..” More bias. He deliberately omitted Epic’s violation of their contract.

    6
    June 21, 2021
    • Steven Noyes said:
      I would say the statement: “ Kantrowitz: Just for context, Epic is the maker Fortnite. Epic sued Apple, because Apple was charging this 30% tax on payments in its App Store.”

      Is a lie. Let’s call it what it is and stop beating around the bush and hold journalists to at least a minimum standard.

      Calling a commission a “tax” is simply untruthful and an outright fabrication.

      6
      June 21, 2021
    • Kirk DeBernardi said:
      Maybe this misconstruing of the word “tax” plays into the hands of those who deem the App Store, and by extension Apple’s success, some kind of utility by fiat.

      If you can’t alter the player, start by altering the language.

      0
      June 22, 2021
  3. Michael Goldfeder said:
    No doubt Vestager and the Rhode Island Representative are of the opinion that Apple should not be allowed to have any Apps on their store at all.

    Favoring Apps is a theory that’s very hard to quantify. Just like store brands being on shelves inside every marketplace worldwide. But I’m certain the foregoing geniuses will come up with some arcane way to find fault with Apple.

    2
    June 21, 2021
    • David Emery said:
      I disagree that it is hard to quantify ‘favoring apps’. There are several clear measures: (1) search position; (2) pre-loading; (3) rules that prohibit competing alternatives (although most of those are gone); (4) rules that prohibit certain behaviors (so the ‘quantification’ is binary). Probably others that don’t come immediately to mind.

      2
      June 21, 2021
  4. Michael Goldfeder said:
    Favoring Apps in their own App Store is code for we want to impose baseless fines. No house brands allowed in any store? It’s an Antitrust violation? It’s very silly and at the end of the day, until a billion users stand up and say otherwise, it’s a very specious position.

    3
    June 21, 2021
  5. Daniel Epstein said:
    I probably don’t need to point out to this crowd but the use of the term tax in relation to Apple was a derogatory term in relation to the price of the products. A sum of the parts cost for components and the Apple profit in addition for design seemed to bother many people who complained about the upfront costs of Apple products. Why do they have to charge us more than the cost of the goods to them? The design should be free. Or lower cost. This was the “Apple Tax” So said the Apple critics. This usage has morphed in the App Store situation. This was done on purpose by the people who are fighting the fees. Propaganda works! Of course in actual court cases maybe not so much.

    2
    June 21, 2021

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