Apple just got slapped with a major antitrust suit alleging a 'pattern of anti-competitive behavior' across all its product lines. And it lost $114 billion in market cap in one day as a result.
I love what you write about the current FTC and antitrust division of DOJ. But why is the White House not broadcasting this to the American people? People here just do not know this kind of info and how it can benefit them.
How is society better off with large monopolies and oligopolies? It can’t just be that consumers pay less for a good, though that is the heart of many of the justifications for merger activities and a significant measurement of a market’s competitiveness.
We can and should do better if we expect better economic and political outcomes.
An excellent big picture piece that should be widely read. Anti-trust action against Amazon, Meta, and Google may be more obvious priorities but the DOJ's lawsuit against Apple matters to us all in a very fundamental way.
I found this fascinating - a company that is beloved and at the same time tyrannical. At my house I am the only microsoft/android user. My husband and my daughter both have ipads and iphones. My husband has two Mac desktops. One of them is no longer supported by apple, but my husband - who is generally not that computer literate - found protective software to give the old Mac a firewall. I am especially pleased because on that old computer is the last Adobe Creative Suite that you could purchase, and so despite Adobe and, probably, Apple, I have my cake and eat it too. Now about Android. I had a Motorola which I lost, so I bought another Motorola, in between the first and second Motorola, Google made the adroid environment more intrusive - and ANNOYING. It is so annoying that I hate to use the phone. Google Assistant jumps in all over the place - annoying little twit. It doesn't ping when texts come in, and it doesn't sound my ringtone, George Thorogood's "Bad to the Bone". What good is a phone if you can't get your ringtone?
So, while I applaud the government's actions, on my next birthday, I'm getting an Iphone. Neither my husband or my daughter get annoyed by their Apple equipment. I want the same.
Matt, I struggle to communicate the importance of antitrust issues - with friends, etc - because so much of what we do is "as consumers". But I think foregrounding the issue that it is for businesses, while acknowledging the consumer angle, as you do, is really important. Establishing a vocabulary that resonates, that is comprehensible - breaks through the obfuscation and marketing hype. "It’s all about the switching costs." - Great tag and you back it well. Yes, it's a one, thin hope, but I'll take it.
My tech nerd experience says Apple has always been what I would call a "niche monopolist". This is not just a niche player that happens to be the only player in its niche, and it's not a pure monopoly either; I can explain…
On the one hand, back in the day Apple never captured a majority of the broader PC market (Microsoft held that), but established themselves as very popular among people who wanted the slightly different Macintosh experience. (Pinning down exactly what was different about it, beyond quality, depends what timeframe we're looking at and which market segments. At various times Apple has courted schools, artists & musicians, and Unix nerds. Where they've never dominated head on, despite their reputation for quality, is standard white collar corporate office business software. Cubicles are full of Microsoft technology; Apple is cool because they're the opposite, in perception at least.) In the market as a whole, Apple was in the minority; in their own segments they dominated. This kind of niche competition, where you're not just trying to be the best in the market as a whole but trying to set yourself apart from the rest of the market, can be a great strategy for fostering innovation and quality, which probably explains why Apple has been a market leader for a whole series of novel technologies.
But, even back in the aughts or the nineties, Apple always applied vertical integration monopolistic practices to reinforce and protect its niche: specifically, vendor lock-in. Apple software runs on Apple hardware; you generally can't run Mac OS on an ordinary PC, nor run whatever you want on Mac hardware. Same deal for each of their other devices as they branched out. Until recently you couldn't even charge Apple devices like the iPod or iPad on universal cables/ports/docks, nor non-Apple devices on apple chargers!
The one kinda sorta exception to all this was MacOS X meeting the Unix standard, such that a lot of mid-level Unix/Linux software can be built on it; and that exception almost proves the rule because the stuff that most of us think of as making an operating system, the desktop and graphics and integration of apps into the rest of the computer at a user-visible level, was not only still different (Unix was just a text OS for servers and terminals, remember), but generally didn't do software developers any favors in creating applications for Mac unless they decided to adopt Apple's underlying technologies… Obviously lots of developers do build software for Mac, but there's a reason you don't see a lot of, "I use Mac, it can run Linux software!" – it isn't that simple except for the layer of software that runs above the OS (so, is not tightly integrated into Linux specifically) but below the graphics and user interfaces. Like, you can run a lot of Linux shell scripts on Mac, and a lot of the underlying programming language tools for building software, but unless you're a hacker that sort of thing isn't going to mean much to you. The biggest names like web browsers would take the trouble to build for Mac anyway but they also did the same for Windows and Linux (whichever they didn't start on), Mac's Unixhood doesn't mean it isn't still a walled Apple garden.
So even before the iPhone existed, we had this company that does a great job competing by setting itself apart in a niche market, but also defines that niche in part by saying "The Apple niche is where you run Apple and only Apple, for as much of the technology stack as we can get control of," rather than by being better at doing any one niche thing in particular. A competitor against the broader tech market, thus driving innovation and quality for a time, but pursuing a strategy of vendor lock in as a vertically integrated monopolist. It was always a weird and ambiguous beast, with some critics avoiding it even though they thought Apple really had the better quality simply because they'd have to sacrifice broader compatibility in the computing world.
It's pretty scary that Apple controls banks and car companies. You've made the case that it is a dangerous monopoly. But what I still don't understand, is why innovation is at odds with their control of iPhone users. It's already too hard to escape Apple's ecosystem, and so Apple doesn't have to innovate. But slacking off is not the same thing as being opposed to something. I still don't see why innovation would be at odds, here.
There's another thing. I feel betrayed by Apple selling out on users' privacy and security. But it's hard to get worked up about Apple having to pay worst privacy offender Google, a bunch of money, to harvest data. I'm more concerned that the Big Tech firms are crushing the companies that try to solve these problems.
Right now, I see both Apple and Android, as equally guilty of being monopolies. As a member of the public, I'd like a thousand choices; not just tweedle dum and tweedle dee.
I'm not sure how I feel about this one. I hate Apple as a company and as a monopoly but even I remember the times the Obama DOJ tried to get backdoor access to their phones (even though Apple is a major privacy violator themselves). It looks to me like the Biden administration has some security state ulterior motives to both Apple and Tic Tok (unrelated to the Chinese). While I may despise both corporations with a passion, this is really souring me on these latest antitrust efforts and might just self sabotage them.
We should note that super apps have their own lock in and anticompetitive schemes. If we go after Apple but fail to prevent super apps, or allow super apps to build their own measures of control, we will have not fixed any of the problems Apple currently poses
I’m very grateful for your work on these monopoly issues. They need breaking down for us average folk who don’t have the training and tools to reveal that the our little would-be corporate emperors are bu**-naked and ripping us off for the high price of fabulous clothes they know they aren’t wearing, and don’t even bother wearing anymore.
Americans need to grasp the realities of China, that industrial and commercial competition in the US does not exist for the titans and their hangers-on, but there it does.
Just one question: does using superapps lock someone into that superapp's environment?Or is it straightforward to switch superapps, if one's so inclined?
Would thje solution to that be to prevent superapp creators' signing exclusionary deals with subapp makers in order to allow users to choose the subapps they want?
I a dedicated subscriber, an iPhone user, and I can relate to everything in this article, especially difficulty tin switching to Android. Two question: 1) What phone do you have? 2) Have you ever switched?
In 2019 apple decided we needed to be able to sign in with our Apple account whenever we could sign in with google, Facebook or another service to allow an app to be submitted to the App Store.
Now this is not a big problem if you’re a big app since adding any of these sign in options is trivial, but it was a problem for smaller apps who could no longer submit updates to their app before setting up an Apple sign in option.
I was working on an app for a client and this shifted the goal posts such that we ended up dropping the app. Had this update not happened we could have kept the app in the App Store, taken a look at what kind of traction it could have gotten among friends and made a decision based on market demand rather than arbitrary App Store rules.
This has happened a few times to apps I’ve used. There was a game that was dropped when Apple dropped support for 32-bit bundles and there was a work cafe finding app that was dropped where I suspect the Apple sign in was the reason (I’ve emailed them to see if they would let me resurrect the app to no avail).
As a consumer I’m pretty excited about this. Even just opening up the NFC chip will bring new capabilities but this can make it exciting to get a new phone again.
Apple could choose to do common sense things, like making text bubbles not green and allowing better quality pictures to be shared via text between iOS and Android.
But they don't, so they deserve any and every consequence that comes to them through this trial.
I love what you write about the current FTC and antitrust division of DOJ. But why is the White House not broadcasting this to the American people? People here just do not know this kind of info and how it can benefit them.
Just the simple fact that all Apps have to be purchased through Apple's app store was enough reason for an antitrust action from day 1.
Apple has over $1 billion in their legal department budget for a reason, to reduce higher cost “risks” not to innovate or compete (both are high risk activities!) - https://venturebeat.com/mobile/apples-former-top-lawyer-1-billion-budget-enabled-high-risk-strategies/.
This exceeded their R&D budget as early as 2012(!) https://gizmodo.com/apple-and-google-spent-more-money-on-legal-fees-than-r-5949909.
They also routinely use their ecosystem in a manner similar to Microsoft and its Windows monopoly.
Though APIs are not protected by copyrights - Google managed to beat Oracle at SCOTUS on the copyright question, in a very controversial case, https://en.m.wikipedia.org/wiki/Google_LLC_v._Oracle_America,_Inc. - the case started as a patent case https://news.ycombinator.com/item?id=39346343
How is society better off with large monopolies and oligopolies? It can’t just be that consumers pay less for a good, though that is the heart of many of the justifications for merger activities and a significant measurement of a market’s competitiveness.
We can and should do better if we expect better economic and political outcomes.
An excellent big picture piece that should be widely read. Anti-trust action against Amazon, Meta, and Google may be more obvious priorities but the DOJ's lawsuit against Apple matters to us all in a very fundamental way.
I found this fascinating - a company that is beloved and at the same time tyrannical. At my house I am the only microsoft/android user. My husband and my daughter both have ipads and iphones. My husband has two Mac desktops. One of them is no longer supported by apple, but my husband - who is generally not that computer literate - found protective software to give the old Mac a firewall. I am especially pleased because on that old computer is the last Adobe Creative Suite that you could purchase, and so despite Adobe and, probably, Apple, I have my cake and eat it too. Now about Android. I had a Motorola which I lost, so I bought another Motorola, in between the first and second Motorola, Google made the adroid environment more intrusive - and ANNOYING. It is so annoying that I hate to use the phone. Google Assistant jumps in all over the place - annoying little twit. It doesn't ping when texts come in, and it doesn't sound my ringtone, George Thorogood's "Bad to the Bone". What good is a phone if you can't get your ringtone?
So, while I applaud the government's actions, on my next birthday, I'm getting an Iphone. Neither my husband or my daughter get annoyed by their Apple equipment. I want the same.
Matt, I struggle to communicate the importance of antitrust issues - with friends, etc - because so much of what we do is "as consumers". But I think foregrounding the issue that it is for businesses, while acknowledging the consumer angle, as you do, is really important. Establishing a vocabulary that resonates, that is comprehensible - breaks through the obfuscation and marketing hype. "It’s all about the switching costs." - Great tag and you back it well. Yes, it's a one, thin hope, but I'll take it.
My tech nerd experience says Apple has always been what I would call a "niche monopolist". This is not just a niche player that happens to be the only player in its niche, and it's not a pure monopoly either; I can explain…
On the one hand, back in the day Apple never captured a majority of the broader PC market (Microsoft held that), but established themselves as very popular among people who wanted the slightly different Macintosh experience. (Pinning down exactly what was different about it, beyond quality, depends what timeframe we're looking at and which market segments. At various times Apple has courted schools, artists & musicians, and Unix nerds. Where they've never dominated head on, despite their reputation for quality, is standard white collar corporate office business software. Cubicles are full of Microsoft technology; Apple is cool because they're the opposite, in perception at least.) In the market as a whole, Apple was in the minority; in their own segments they dominated. This kind of niche competition, where you're not just trying to be the best in the market as a whole but trying to set yourself apart from the rest of the market, can be a great strategy for fostering innovation and quality, which probably explains why Apple has been a market leader for a whole series of novel technologies.
But, even back in the aughts or the nineties, Apple always applied vertical integration monopolistic practices to reinforce and protect its niche: specifically, vendor lock-in. Apple software runs on Apple hardware; you generally can't run Mac OS on an ordinary PC, nor run whatever you want on Mac hardware. Same deal for each of their other devices as they branched out. Until recently you couldn't even charge Apple devices like the iPod or iPad on universal cables/ports/docks, nor non-Apple devices on apple chargers!
The one kinda sorta exception to all this was MacOS X meeting the Unix standard, such that a lot of mid-level Unix/Linux software can be built on it; and that exception almost proves the rule because the stuff that most of us think of as making an operating system, the desktop and graphics and integration of apps into the rest of the computer at a user-visible level, was not only still different (Unix was just a text OS for servers and terminals, remember), but generally didn't do software developers any favors in creating applications for Mac unless they decided to adopt Apple's underlying technologies… Obviously lots of developers do build software for Mac, but there's a reason you don't see a lot of, "I use Mac, it can run Linux software!" – it isn't that simple except for the layer of software that runs above the OS (so, is not tightly integrated into Linux specifically) but below the graphics and user interfaces. Like, you can run a lot of Linux shell scripts on Mac, and a lot of the underlying programming language tools for building software, but unless you're a hacker that sort of thing isn't going to mean much to you. The biggest names like web browsers would take the trouble to build for Mac anyway but they also did the same for Windows and Linux (whichever they didn't start on), Mac's Unixhood doesn't mean it isn't still a walled Apple garden.
So even before the iPhone existed, we had this company that does a great job competing by setting itself apart in a niche market, but also defines that niche in part by saying "The Apple niche is where you run Apple and only Apple, for as much of the technology stack as we can get control of," rather than by being better at doing any one niche thing in particular. A competitor against the broader tech market, thus driving innovation and quality for a time, but pursuing a strategy of vendor lock in as a vertically integrated monopolist. It was always a weird and ambiguous beast, with some critics avoiding it even though they thought Apple really had the better quality simply because they'd have to sacrifice broader compatibility in the computing world.
It's pretty scary that Apple controls banks and car companies. You've made the case that it is a dangerous monopoly. But what I still don't understand, is why innovation is at odds with their control of iPhone users. It's already too hard to escape Apple's ecosystem, and so Apple doesn't have to innovate. But slacking off is not the same thing as being opposed to something. I still don't see why innovation would be at odds, here.
There's another thing. I feel betrayed by Apple selling out on users' privacy and security. But it's hard to get worked up about Apple having to pay worst privacy offender Google, a bunch of money, to harvest data. I'm more concerned that the Big Tech firms are crushing the companies that try to solve these problems.
Right now, I see both Apple and Android, as equally guilty of being monopolies. As a member of the public, I'd like a thousand choices; not just tweedle dum and tweedle dee.
I'm not sure how I feel about this one. I hate Apple as a company and as a monopoly but even I remember the times the Obama DOJ tried to get backdoor access to their phones (even though Apple is a major privacy violator themselves). It looks to me like the Biden administration has some security state ulterior motives to both Apple and Tic Tok (unrelated to the Chinese). While I may despise both corporations with a passion, this is really souring me on these latest antitrust efforts and might just self sabotage them.
We should note that super apps have their own lock in and anticompetitive schemes. If we go after Apple but fail to prevent super apps, or allow super apps to build their own measures of control, we will have not fixed any of the problems Apple currently poses
I’m very grateful for your work on these monopoly issues. They need breaking down for us average folk who don’t have the training and tools to reveal that the our little would-be corporate emperors are bu**-naked and ripping us off for the high price of fabulous clothes they know they aren’t wearing, and don’t even bother wearing anymore.
Americans need to grasp the realities of China, that industrial and commercial competition in the US does not exist for the titans and their hangers-on, but there it does.
Just one question: does using superapps lock someone into that superapp's environment?Or is it straightforward to switch superapps, if one's so inclined?
Would thje solution to that be to prevent superapp creators' signing exclusionary deals with subapp makers in order to allow users to choose the subapps they want?
Another positive of this lawsuit is that we will get top notch content like this piece:
https://www.techradar.com/phones/iphone/apple-iphone-is-not-a-monopoly-and-you-really-dont-want-the-us-government-to-win
It will be entertaining, if nothing else.
I a dedicated subscriber, an iPhone user, and I can relate to everything in this article, especially difficulty tin switching to Android. Two question: 1) What phone do you have? 2) Have you ever switched?
In 2019 apple decided we needed to be able to sign in with our Apple account whenever we could sign in with google, Facebook or another service to allow an app to be submitted to the App Store.
Now this is not a big problem if you’re a big app since adding any of these sign in options is trivial, but it was a problem for smaller apps who could no longer submit updates to their app before setting up an Apple sign in option.
I was working on an app for a client and this shifted the goal posts such that we ended up dropping the app. Had this update not happened we could have kept the app in the App Store, taken a look at what kind of traction it could have gotten among friends and made a decision based on market demand rather than arbitrary App Store rules.
This has happened a few times to apps I’ve used. There was a game that was dropped when Apple dropped support for 32-bit bundles and there was a work cafe finding app that was dropped where I suspect the Apple sign in was the reason (I’ve emailed them to see if they would let me resurrect the app to no avail).
As a consumer I’m pretty excited about this. Even just opening up the NFC chip will bring new capabilities but this can make it exciting to get a new phone again.
Apple could choose to do common sense things, like making text bubbles not green and allowing better quality pictures to be shared via text between iOS and Android.
But they don't, so they deserve any and every consequence that comes to them through this trial.