From “App-Store Bill Targeting Apple, Google Is Approved by Senate Panel” in Friday’s Wall Street Journal:
Sen. Richard Blumenthal (D., Conn.) likened Apple and Google to railroad monopolies who own the means for other companies to get their products to market.
“Consumers, if you are watching, you pay more because of the monopolist rent fee that is charged to you as a result of their monopolistic power,” he said.
Sen. John Cornyn (R., Tex.), who voted “no” Thursday, suggested the fees were fair compensation for the platform the companies provide.
“I hope we’re not, by focusing on these specific cases, suggesting that somehow there is something wrong with creating a new product that has value to consumers and making a profit and creating jobs,” Mr. Cornyn said.
My take: There’s the issue in a nutshell.
Why aren’t the Senators focused on the OPEC cartel fixing the price of oil, now above $90/barrel, and strangling the world economy while a huge surplus exists in Saudi sands?
Because the OPEC cartel is not under US jurisdiction, and they don’t appear to want to voluntarily follow our laws?
However the Saudi’s own Motiva, the operator of the Port Arthur refinery in Louisiana, the largest refinery in North America. At the same time they engage in price-fixing along with all OPEC+ members, by creating artificial supply constraints. WTO and GATT seem toothless when it comes to natural resources trade. But rich citizens of Western nations can afford high gas prices for their SUVs and we do love those billion dollar arms sales so like Roseanne Roseannadanna often said, “Never mind!”
Duopoly? The definition say’s “collision”. See wikipedia.
Did the railroads ever give 85% of their customers a free ride? Never? Apple let’s 85% of the Apps ride for free, including Apps that make tons of money, which happens to include Meta.
Plus web-Apps which do not leverage the 100’s of thousands of APIs designed for Apps are completely free from fees and curation.
Lesson: The railroad was held liable for harm caused by not taking safety measures for a cart on its property. If Apple and Google are railroads, they are obligated to take safety measures, which have costs.
I just have a hard time believing that there is a groundswell of aggrieved app consumers out there feeling like they are being ripped off by these stores. The more likely driver of this is uninformed elected officials lumping real frustration with privacy issues under the umbrella of “Big Tech Regulation.” They intend to get some scalps but aren’t exactly sure why.
How has Blumenthal determined what a “monopolist rent fee” is? Before Apple, app store fees charged by wireless carriers for Symbian apps were far higher.
If Blumenthal wants to look at “railroad monopolies who own the means for other companies to get their products to market.”, why isn’t he looking at the elephant in the room, Amazon?
Also, why ding the two delivery services equally, when one does a far better job of doing so than the other?
Have thes two seminal questions been asked and answered?
Finally, in what way does this impact the two bottom lines? Recall that one operation earns income from advertising and the other from direct fees, with all that entails.
(1) The comparison between app stores and railroads fails since goods are only subjected to rejection for transfer by Apple on the basis of harm. Is the government now saying it’s taking over the job of inspection?
(2) Why ding the two delivery services equally, when one does a far better job of protecting consumers than the other?
(3) Since one operation earns income from advertising (Google) and the other from direct fees (Apple), this legislation can be seen as favoring the advert-based system over the fee-based system by reducing the ability of a fee-based system to monetize,
(4) This appears to be an attempt to legalize jailbreaking iPhones. However, consumers can’t be forced to choose those other app stores. An app developer could choose to sell the app cheaper by selling directly, but that takes away the guarantee that it’s as safe as the iPhone version, since Apple won’t warranty any app sold elsewhere, nor can it be forced to do so. Note that Apple would be free to raise their rates to make up for any lost revenue.