In the vast chasm between pure monopoly (one supplier) and the perfectly competitive market (which is imaginary), is large room for firms which have competition but are still big enough to abuse their market position.
It's not useful to focus only on pure monopoly. From an economics perspective, there are plenty of other market structures which can be damaging for consumers.
It's not just the person you're responding to--the FTC looks only at relatively pure monopolies for anti-trust violations. There are lots of things that are legal as a player in a competitive market versus illegal as a monopoly. The US has a long history with pure monopolies, which are why the laws are the way they are.
You can argue until you're blue in the face that the FTC should look at other things, as well, but I'm not sure you'll get very far.
But from a legal perspective [IANAL, but I'm pretty confident on this one], they can engineer the system to give them an advantage as long as they don't have an monopoly. When a company is a monopoly, new rules do apply.
Is it possible to run Windows Phone or Android on iPhones now?
They may not have a monopoly on smartphones (they wished they did, and maybe they even think they deserve one), but that's not for lack of trying and as far as systems software on hardware supplied by Apple goes they do. You can't buy an iPhone without iOs and nobody makes an alternative.
Anti-trust law does not require a monopoly per-se, 'market power' is a well established concept and within the iPhone hardware segment Apple has 100% market power when it comes to systems software, on top of that they control (through their app store) 100% of all software that gets installed on those devices.
So if an apple supplied app out-competes a 3rd party supplied app by using api's only known to apple then that might lead to trouble. I have no illusion that that would be an extremely hard case to fight/win, especially given the fact that Apple is the largest company and has a nearly unlimited budget when it comes to hiring lawyers.
You can always define something as not a monopoly by asserting the truth that people spend their money on a variety of items so the monopolist is competing with manufacturers and purveyors of beer, diesel and kites for the sales. The existence of monopoly isn't actually the interesting test, the test is usually is there an abuse of market power to the detriment of competitors. Emphasis on "abuse"
The flip side is that you can always define any supplier as a monopoly too. Apple have a monopoly on the supply of IOS and devices running IOS. Semantic definitions of monopoly aren't terribly useful. Budweiser have a monopoly on bud light. Budweiser probably can't use their market power to make miller taste worse than it does.
I didn't much care for Microsoft's anti-competitive behavior, didn't care for the stories from the grey-beard's about IBM's before that. Maybe you've heard of standard oil. I don't care for apple's anti-competitive behavior either. Microsoft and IBM always had plenty of people who defended them too. I didn't need to give Microsoft 30% (is it?) of my sales revenue to sell software that is run by my customer on a microsoft operating system. I wonder if the general reaction would have been much different if microsoft had tried charging a significant percentage of sales revenue for all software vendors selling software that ran on windows in late 90s and early 00s
A monopoly is not always a negative, it is the behaviour of the monopolyquality determines whether it is good or bad.
I remember being taught about YKK, a monopoly producer of zips, they kept their monopoly by producing good quality cheap zips. The profit made was enough that they could stay in business but not enough that it was worth other companies expending capital to get into the market.
Monopoly is one state of the market on a spectrum in a capitalist economy, it is neither good or bad it just is.
Except you're not an antitrust law expert, you're a Random Guy On The Internet making up handwavey arguments that would never fly in court. Under this principle, you could say Nintendo has a monopoly on Nintendos and must therefore open secret APIs to developers, or that whatever cable box company has a monopoly on their particular brand of cable boxes, &c. Courts reject principles that lead to absurdity under simple substitutions.
I don't know what your comment about "anti-trust law being about more than monopolies" is supposed to mean. It says nothing, and furthermore says nothing with an authority to which you are not entitled, being not an antitrust law expert. So your unsupported and unreasonable claims should be discounted accordingly.
If the only people allowed to talk about anything are experts then we might as well shut down every forum on the internet including this one.
But have a read on the various pages written by experts and come up with arguments against what I said instead of just trying to attack my credibility.
My argument is, since you insist that I don't have any, that since Apple has total control of an ecosystem they themselves created that there might be an anti-trust issue there along the lines of Microsoft when they decided to include 'mediaplayer' with every windows install when and if an Apple app competes with a 3rd party supplied app.
Whether or not I'm a subject expert or not has no bearing on that. I suspect that the answer is 'probably not', but I have seen weirder lawsuits being won. The bar in anti-trust cases is very high but there are multiple standards of proof and multiple instances of potentially anti-competitive behaviour.
Microsoft including a media player, meant that >95% of desktop PCs had a Media Player from microsoft, thus there was no 3rd party market for Media Players. But microsoft did more than merely include a Media player with regards to IE. They embeded the media player into the operating system so you could not remove it. You had no option but to get it.
Lets say there was a device that allowed you to pay tolls from your car in bitcoin. GM including a version of that in their cars would not dominate the market. It would diminish it, but not devastate. But lets say GM sold 80% of the cars in the world. Even then, including the device wouldn't be a violation of anti-trust.
Through the early 90s, MS did this often, Media Players, Disk Compression, Defrag, the list goes on and on.
But, if GM had 95% of the car market, and included a device that only paid in fiat currency, and it was 'artificially' tied into the ignition computer, so removing it made the cars useless. Then had the device subtly interfere with any alternate device. Finally, there was evidence, (emails from CEOs, VPS) that GM did this with the sole purpose of preventing BitCoin as a currency. Then you'll understand the scope of M$'s efforts in the browser wars, and what it took to finally get them at antitrust.
You're missing the key point that Microsoft makes an OS designed to run on hardware they don't make. Apple makes the iP* hardware and the entwined OS to run on it, much like PlayStation, Xbox, etc. Apple isn't trying to elbow other people off someone else's hardware - but Microsoft did, and got slapped down for it.
Yes, somebody does "make an alternative". There are hundreds of smartphones which are, at base specs, little different from an iPhone and run a variety of viable competing operating systems.
A monopoly occurs when nobody else can compete via resources the monopoly company doesn't ever own, either because the monopoly buys out every option (usually at a loss) for the sole purpose of denying access, or by conspiring to otherwise block fair competition. MS was in violation because (to at least a significant degree) they made everyone buy Windows (or, in a somewhat misguided case, mediaplayer), even if the hardware manufacturer was deliberately not installing Windows on a machine which the customer did not want Windows on; MS was interfering in a transaction they had no right to. Apple, on the other hand, makes the hardware and OS, and has every right to not sell one without the other - and if you don't want one or the other, there are plenty of fairly competing alternatives.
> Apple makes the iP* hardware and the entwined OS to run on it, much like PlayStation, Xbox, etc.
Tying software to hardware is not some magic immunity to antitrust. If you have a monopoly on either of them then the tying itself is illegal! If Microsoft did the same thing in the 90s all it would have done for them is to have Dell and HP filing complaints with the FTC alongside Sun and Netscape.
What about first-party console games that sell better than some third-party games? Should Nintendo/Microsoft Games/Sony all be investigated for antitrust?
"Nobody makes an alternative" is demonstrably, empirically false. Android, BlackBerry, Windows, Tizen, etc.
In fact, my entire household uses Android phones, as do all my family and with the exception of three individuals (2 Apple, 1 Windows), all my friends.
Did you purposefully misunderstand that sentence or was it simply not clear? To complete the sentence in an unambiguous way 'alternative os for apple mobile hardware'.
Right, but so what? If there's alternative hardware, then there's an alternative OS; nobody is forced to use Apple mobile hardware, nobody is forced to use iOS. The fact that you can't use arbitrary operating systems on arbitrary hardware doesn't mean that Apple has a monopoly.
I begin to question whether you understand what "alternative" means in the context of the interaction between hardware and software. It's a somewhat gray area, sure, but it's not that gray. There are many, many, many different mobile devices which one can use non-Apple software and non-Apple OSes on. Real, actual, genuine alternatives to Apple mobile devices exist in literally every sense of the word "alternative". In that context, that one cannot install an alternative OS on an Apple product is irrelevant and doesn't mean, at all, by any rational measure, that therefore "alternatives don't exist." It's simply facile to suggest otherwise.
What you're failing to understand is that there is more than one market in question. Nobody is saying that Apple has a monopoly on smartphones. The issue is that Apple has a monopoly on iOS app distribution. It's a completely different market, and there is no substitute product in that market. You can't get iPhone apps from Google Play and you can't run Android apps on your iPhone.
No, the market is "consumers of mobile devices, upon which apps can be distributed or installed." What you're identifying as it's own market is actually a brand; a segment of a larger market. A market in which there is plenty of competition, I'd add.
What you're proposing could easily be said about any supply of any good or service owned by anybody or any company. If each company's product distribution constitutes a monopoly of "Product X Market", then "monopoly" has been redefined.
I'm not arguing that what Apple has done in the mobile space is good, or even ethical or appropriate. I'm simply arguing that they do not own a monopoly, in any sense of the word that is reasonable in this context.
> No, the market is "consumers of mobile devices, upon which apps can be distributed or installed."
Let me see if I can explain why that's wrong.
> What you're proposing could easily be said about any supply of any good or service owned by anybody or any company. If each company's product distribution constitutes a monopoly of "Product X Market", then "monopoly" has been redefined.
Technically a trademark is a monopoly, albeit a legally granted one. But that's not what I'm talking about.
For example, Exxon 87 unleaded gasoline is completely fungible with BP 87 unleaded gasoline. They're for all practical purposes the same product, so they're in the same market even though they're different brands. An iPhone is less fungible with, say, a Samsung phone. They're still close enough substitutes to be plausibly considered the same market (although, for example, in the Microsoft case Windows and MacOS were found not to be in the same market). But that's still not the market I'm talking about. I'm talking about distribution of apps for these devices.
Let's start with a preliminary issue. Are iPhone apps in the same market as Android apps? Can they be used as substitutes for one another? The answer is clearly no. You can't run an Android app on an iPhone. This is substantially why Windows and MacOS were found not to be in the same market, but again that's not the market I'm interested in here. The point is that iOS apps and Android apps are not substitutes. And that doesn't even necessarily separate the markets for the devices -- because even though Angry Birds for iOS is a different product sold to different customers than Angry Birds for Android, the fact that the quantity and quality of apps available for each platform is comparable means that the platforms themselves are still reasonable substitutes for one another. But you can imagine how that could change if app developers stopped developing for one platform or the other, which reinforces the point.
So back to the apps. Is there competition for the production of iOS apps? Of course there is. There are thousands of developers; that's not at issue. But distribution is different than production. General Electric is not Walmart. Is there competition for distribution? No. No one is allowed to distribute iOS apps but Apple. There are no substitutes, Apple has a distribution monopoly in that market.
That is not how most "brands" work. You don't have to buy cars through Exxon. You don't have to buy gasoline through Ford. You don't even have to buy Android apps through Google Play. Apple is doing something unusual which results in the monopoly.
