Apple Could Soon Face 'Sweeping' U.S. Antitrust Lawsuit

[ozaz]

So is the proposal to outlaw all closed ecosystems? It’s too wide of a generalization to say that closed ecosystems negatively affect consumers, economies, and progress. There are trade offs as with anything including open ecosystems. Completely wiping away closed ecosystems and its benefits from off the table also undermines consumer choice in I argue an even more profound way.

Apple haven't got a completely closed ecosystem/platform though. They made a choice to create a platform which integrated 3rd party apps, services, and devices. They also chose to give their own apps and devices advantages on the platform. Given how big the smartphone app, services, and peripherals industries have grown and the dominance of Apple's platform (one of only two significant smartphone platforms in the world) its only right that they come under scrutiny, in particularly scrutiny into whether or not their practices are anticompetitive.

If Apple had indeed chosen to create a true closed ecosystem consisting of only Apple devices, apps, and services, they wouldn't be in a position of significant power over whole industries and there would be no need for any scrutiny.

 

[MacGizmo]

The b@st@rdz in Washington can't fix healthcare, can't fix immigration issues, can't even come close to balancing a budget, can't fight other world powers from fighting with each other, can't stop fighting with the other party across the isle... but oh boy, they sure do come together to "fix" the problem of a stupid watch and how it works (or doesn't work) with a phone.

Frustrating.

 

[mrochester]

Apple haven't got a completely closed ecosystem/platform though. They made a choice to create a platform which integrated 3rd party apps, services, and devices. They also chose to give their own apps and devices advantages on the platform. Given how big the smartphone app, services, and peripherals industries have grown and the dominance of Apple's platform (one of only two significant smartphone platforms in the world) its only right that they come under scrutiny, in particularly scrutiny into whether or not their practices are anticompetitive.

If Apple had indeed chosen to create a true closed ecosystem consisting of only Apple devices, apps, and services, they wouldn't be in a position of significant power over whole industries and there would be no need for any scrutiny.

I can’t think of any industry that Apple has any significant power over other than Apple hardware and software.

 

[ozaz]

So how do we break those network effects so that a new OS and ecosystem can enter the market? This is the problem no one seems to be addressing.

I think regulation around interoperability might partly address this. If big "gatekeeper" services are required to be interoperable then first party apps for those services wouldn't necessarily be needed for a new platform to be viable. Smaller 3rd parties could plug into those gatekeeper services instead.

I can’t think of any industry that Apple has any significant power over other than Apple hardware and software.

Ok then we think differently about this. In my view (and obviously in the view of regulators looking into Apple practices) Apple wields significant power over smartphone app makers and makers of devices that consumers would expect to be linked to smartphones (e.g. smart watches, earbuds, etc).

 

[mrochester]

I think regulation around interoperability might partly address this. If big "gatekeeper" services are required to be interoperable then first party apps for those services wouldn't necessarily be needed for a new platform to be viable. Smaller 3rd parties could plug into those gatekeeper services instead.



Ok then we think differently about this. In my view (and obviously in the view of regulators looking into Apple practices) Apple wields significant power over smartphone app makers and makers of devices that consumers would expect to be linked to smartphones (e.g. smart watches, earbuds, etc).

If interoperability is the answer then there needs to be a lot more things included; things like YouTube etc.

Apple only controls apps and devices within their own ecosystem; they have no power over Facebook, Sony, Motorola, etc, to stop them from entering the smartphone, mobile operating system or wearable market if they so choose.

 

[ozaz]

If interoperability is the answer then there needs to be a lot more things included; things like YouTube etc.

Not sure what US regulators are doing in relation to YouTube, but YouTube as well as several other non-Apple platforms are being treated as gatekeeper platforms by the EU, and as such are coming under scrutiny with potential interoperability implications. Not saying you're doing this, but a lot of comments on here give the impression that Apple is being singled out, which is not the case.

Apple only controls apps and devices within their own ecosystem

Yes, that is what I was referring to in post #553. But Apple's ecosystem is dominant enough that the control it exerts over 3rd party apps and devices within this sphere should come under scrutiny.

 

[mrochester]

Not sure what US regulators are doing in relation to YouTube, but YouTube as well as several other non-Apple platforms are being treated as gatekeeper platforms by the EU, and as such are coming under scrutiny with potential interoperability implications. Not saying you're doing this, but a lot of comments on here give the impression that Apple is being singled out, which is not the case.



Yes, that is what I was referring to in post #553. But Apple's ecosystem is dominant enough that the control it exerts over 3rd party apps and devices within this sphere should come under scrutiny.

Apple’s ecosystem is only ‘dominant’ because there are so few competitors. The solution is to create more competing ecosystems.

 

[MrNomNoms]

It appears that people didn't read the article other than jump straight to this list and concluding the DOJ has already made a decision:

Apple officials have met with the DoJ several times during the investigation, which has covered everything from iMessage to the Apple Watch. Some of the topics looked at:

• How the Apple Watch works better with iPhone than other smart watches do.
• How Apple locks competitors out of iMessage.
• How Apple blocks other financial firms from offering tap-to-pay services similar to Apple Pay on the iPhone.
• Whether Apple favors its own apps and services over those provided by third-party developers.
• How Apple has blocked cloud gaming apps from the App Store.
• How Apple restricts the iPhone's location services from devices that compete with AirTag.
• How App Tracking Transparency impacted the collection of advertising data.
• In-app purchase fees collected by Apple.

Apple competitors like Tile, Beeper, Basecamp, Meta, and Spotify have talked with antitrust investigators, as have banks that have wanted access to the iPhone's NFC capabilities.

The Department of Justice has not yet made a final decision about whether a lawsuit should be filed, and Apple has not yet had a chance to have a final meeting to plead its case before a lawsuit is filed.

Long story short, DOJ is investigating Apple (along with other large technology companies), competitors are putting forward their own complaints regarding how they feel that they've been hard done by and then it is up to DOJ to see whether those complaints hold any merit then DOJ then have further discussions where those issues are raised with Apple. When those issues are raised with Apple any number of things could happen, some of the complaints the DOJ could dismiss because it is just competitors having a grizzle and a whinge while others complaints may result in the DOJ asking Apple if such concerns can be addressed with Apple voluntarily addressing those concerns - for example, Apple adding support for Google's RCS implementation so when a customer adds their google account to their phone that iMessage will support Google's RCS implementation, allow side loading but protect customers through the notarisation service that is used for macOS, allow NFC access to a wider variety of use cases, allowing alternative web engines to run rather than forcing developers to use Webkit etc. keeping in mind that this might end up going nowhere.

 

[1129846]

If people don't like Apple ecosystem then don't use it, it is that simple.

That is a ******** argument here.

That is the same as saying you don't like the state, city or country you are in move. Never mind the cost and logistics of that. Never mind if it is even possible.

It is that level of a ******** argument.

 

[d686546s]

Apple’s ecosystem is only ‘dominant’ because there are so few competitors. The solution is to create more competing ecosystems.

In some respects, yes, but also not really. If you're a financial services firm, or a local payments network, should you really be expected to create your own handheld devices and accompanying operating system to compete with Apple Pay?

Competition to Android and iOS would be healthy, absolutely, but not every digital service needs its own ecosystem, that's neither desirable nor feasible.

 

[HarryPot]

Maybe yes and maybe no.

Yes. Who is the determinant of the line in the sand? And what is that line? There are wealthy people in very many countries, including disadvantaged nations,

And the government has programs to help people. Robin Hood is not the answer.

Some people are bright and lucky. Not everybody can be that.

Apple was in the right place at the right time. And by producing a product people wanted it grew. The smartphone market, unlike the cellular company market has no artificial barriers or monopolies.

Well. The government already does by taxing more depending on you income.

The government also control the “free market” in many ways. I’m not saying they should go and take the money from the bank account of rich people. But that they should control how big companies can get. By doing this, you indirectly control how rich people can get.

As for some people being bright and lucky. Sure, not everyone has the capabilities or intelligence to do what Steve Jobs did, or to invest like Warren Buffet does. And they will without a doubt live in the great house, have many cars, travel to all their houses around the world. But there is a point where having $1B dollars and having $100B does not really limits you.

So creating a new bracket where those people pay more taxes, I think is completely OK. The government already does this.

As for companies, yes Apple was in the goth time and the right place. But they are so big now, Apple, Samsung, Google. And have so much control on the market, that new players need ridiculous amount of money to enter the market.

By allowing this, you indirectly promote that the average citizen stays average, and the rich citizen becomes richer, because now new markets in the tech industry will also belong to these big companies. Even old markets, little by little Apple enters new markets and easily destroys competition.

And yes. We are talking about one of the most “ethical” companies. It gets much worse when you enter and analyze the situation in more traditional industries. Like food, medicine, energy…

 

[I7guy]

Well. The government already does by taxing more depending on you income.

The government also control the “free market” in many ways. I’m not saying they should go and take the money from the bank account of rich people. But that they should control how big companies can get. By doing this, you indirectly control how rich people can get.

As for some people being bright and lucky. Sure, not everyone has the capabilities or intelligence to do what Steve Jobs did, or to invest like Warren Buffet does. And they will without a doubt live in the great house, have many cars, travel to all their houses around the world. But there is a point where having $1B dollars and having $100B does not really limits you.

So creating a new bracket where those people pay more taxes, I think is completely OK. The government already does this.

As for companies, yes Apple was in the goth time and the right place. But they are so big now, Apple, Samsung, Google. And have so much control on the market, that new players need ridiculous amount of money to enter the market.

By allowing this, you indirectly promote that the average citizen stays average, and the rich citizen becomes richer, because now new markets in the tech industry will also belong to these big companies. Even old markets, little by little Apple enters new markets and easily destroys competition.

And yes. We are talking about one of the most “ethical” companies. It gets much worse when you enter and analyze the situation in more traditional industries. Like food, medicine, energy…

Okay. I agree. The ceiling for individual wealth should be $750B and the ceiling for corporations should be $3T. Now how is this going work?

How does this help? Apple is bigger than the sum of it's parts, just like AT&T was bigger than the sum of it's parts. It's true there were some minor benefits to the AT&T breakup. But today we have an oligopoly and there is no way for newcomer to enter become a cell provider because it's about being able to buy airwaves of which the government has a monopoly.

So rather than having anti-trust investigations against Apple, how about disassembling the government so it works "for the people., which is the part that has been lacking for quite a while.

 

[HarryPot]

I can’t think of any industry that Apple has any significant power over other than Apple hardware and software.

Because of how big Apple is, and the huge amount of customers they already have. It could be said that any market they enter, they have a very significant power.

In the music streaming industry they have a huge power. There are basically two big players, and the one you can certainly bet will never go out of business is Apple.

The same could be said of any other market they enter. Speakers. Earbuds. Smartwatches.

Yes, they make great products. But what will happen when they stop doing this? When the next CEO is no longer of the Steve Jobs era and some new CEO that only thinks about profits takes control.

Apple is in a market where if they wanted, they could really use their power for bad things. Give it 10-20 more years and technology will be even more important in our daily lives.

Should the government wait for this to ever happen? Or start acting since the very beginning and prevent things from happening.

Look into traditional industries, where they joy or dream of innovation is completely broken, and everything is about profits for stakeholders.

 

[H2SO4]

I prefer a walled garden approach. If I didn’t like a walled garden approach, I would switch to Android.

Can you not still have it by sticking to the App Store?

 

[harriska2]

The only one I care about is the ability to side load, and that isn’t even one of the complaints 🙄

 

[HarryPot]

Okay. I agree. The ceiling for individual wealth should be $750B and the ceiling for corporations should be $3T. Now how is this going work?

How does this help? Apple is bigger than the sum of it's parts, just like AT&T was bigger than the sum of it's parts. It's true there were some minor benefits to the AT&T breakup. But today we have an oligopoly and there is no way for newcomer to enter become a cell provider because it's about being able to buy airwaves of which the government has a monopoly.

So rather than having anti-trust investigations against Apple, how about disassembling the government so it works "for the people., which is the part that has been lacking for quite a while.

That the government works or not I agree, but is a whole different situation to be fixed.

I agree with the AT&T example you give. But should we just wait and see what happens 30 years down the road in the tech market?

I for one don’t believe the market will fix itself. It crrrainly is not doing so in many other industries. If the government just takes a step back, many people with power and money will just abuse the system. And how can the free market fix it? No longer buying their products? Essential markets like the food, energy and transportation industry are controlled by very few players.

I believe something must be done to control how big a single company can get. Not sure there is a $ number. A business market cap is not necessarily a relation with how big they are. Just how big people believe that can get.

As for people. I also don’t believe there should be a limit. But yes to more taxes after a certain amount. And yes to controlling how big companies can get. This last point automatically limits many billionaires out there. Most of them become rich because the companies where they invested, or that they created, have become huge.

 

[I7guy]

That the government works or not I agree, but is a whole different situation to be fixed.

I agree with the AT&T example you give. But should we just wait and see what happens 30 years down the road in the tech market?

Yes and no. If you want to end tech innovation and put the US at the bottom of every list then start regulating the free market.

I for one don’t believe the market will fix itself.

The market really isn't broken. Some people may not like it, but it is, for the most part, working as intended.

It crrrainly is not doing so in many other industries. If the government just takes a step back, many people with power and money will just abuse the system.

Nobody is saying that. But regulate that which is important: air, food and water. Keep our finances safe. Keep you hands out of digital market places and let that market regulate itself.

And how can the free market fix it? No longer buying their products? Essential markets like the food, energy and transportation industry are controlled by very few players.

But highly regulated.

I believe something must be done to control how big a single company can get.

I don't. A company should comply with existing laws. And of course none of us are clean as a whistle. But the punishment should fit the crime.

Not sure there is a $ number. A business market cap is not necessarily a relation with how big they are. Just how big people believe that can get.

That's the end to capitalism. Just break up companies after they get to a certain size.

As for people. I also don’t believe there should be a limit. But yes to more taxes after a certain amount. And yes to controlling how big companies can get. This last point automatically limits many billionaires out there. Most of them become rich because the companies where they invested, or that they created, have become huge.

And that is what capitalism is about. Get an idea. Innovate on it. Sell it and get rich. I'm good with that. Make 'em pay taxes but I'm good with that.

As far as this thread topic, Apple will fight the DoJ and I'm sure there will be some changes. But if the DoJ thinks it has a case, then let them take Apple to court.

 

[lartola]

Apple reportedly charges issuers 0.15% of the transaction. Considering the issuers typically charge merchants ~3%, I don’t think Apple’s cut (5%) even approaches “hefty.” It’s also unclear (and likely unknowable by anyone on the outside) whether the issuing bank or the payment processor—i.e. Visa, MC, Discover, Amex—pays Apple.

Perhaps hefty wasn’t right, but the banks/card issuers certainly don’t like to pay apple a fee. And there is no doubt that the card issuers are the ones who pay Apple to be able to let their customers add their cards to the iOS wallet app. It certainly isn’t the payment processors who pay apple, and the proof is that merchants in countries where apple pay is otherwise unsupported are still able to accept it just as long as they support contactless payments and honor the network of the card selected by the user. If payment processors were the ones paying apple then it would be impossible to use apple pay outside the officially supported countries, which is NOT the case.

 

[lartola]

Sounds like regulators should take some action to increase competition at the operating and ecosystem level then.

Exactly.

 

[Unregistered 4U]

Yeah. But there isn’t really an alternative to Siri on Apple devices. And future versions of Siri will hopefully get better once they start incorporating a real AI backend.

I think Apple’s limitation will always be their privacy stance. Things like Weather, time, home automation are all hyperlocal and can be handled by the phone. Going much further than that requires accessing a database that stores historical information about you in order to build a profile that can yield more accurate results tailored on who you are and things that interests you. The data in that profile as a result, has to be open for Apple’s viewing and, if it’s open to Apple, it’s also open to a court order for Apple to provide that data. Apple indicates they want to maintain E2E encryption for those things that are currently in place, so a wide swath of activities will always be outside of a realm of data they have access to.

An AI backend with no access to the user’s data wouldn’t appreciably improve the results, I don’t think.

 

[Karma*Police]

Extremes are bad. Extreme socialism aka communism is terrible, extreme capitalism such as the US is bad too. Something in between such as Norway or Sweden would be best.

And no, communism doesn’t work very well in communist countries. People have no freedom and have a very limited coverage of their basic needs.

There is nothing extreme about American capitalism. The country itself is founded on ideals and meritocracy which is why people from all over the world are clamoring to come to the US. It provides opportunity for anyone willing to work hard and make something of themselves which has unleashed the creativity of millions of individuals.

This also explains why so many modern inventions (and our way of life) can be attributed to the US, including electricity, lightbulbs, the first successful gas and electric powered automobiles, planes, air conditioning, refrigerators, microwave ovens, computers, cell phones, first successful EVs, the foundation for the Internet, etc.

It’s amazing to me that we’re still having discussions about the “benefits” of socialism when recent history is littered with how socialism has made everyone (but the ruling class) equally poor and miserable; from Russia to China to Cuba to Venezuela. The very idea of “equity” goes against nature itself.

Sweden is a good example of how socialist policies nearly destroyed that country, and only by privatizing many industries, were able to become more prosperous. Venezuela went from being the most prosperous Latin American country to the poorest overnight when they voted for a socialist. Chile, OTOH, went from being one of the poorest countries in Latin America to the most prosperous, thanks to Milton Friedman helping a new regime reject socialist policies and adopt free market policies a half a century ago.

Capitalism is the system that have brought billions of people out of poverty. Just because there are poor people (many by choice and/or gov’t programs like welfare and giving money to single mothers, not to mention gov’t waste of our tax dollars) doesn’t mean it’s extreme. There will ALWAYS be poor people. It’s up to individuals to help our fellow human beings in need, not expect everyone else, including a wasteful nanny state to fix all of society’s‘ problems.

 

[Unregistered 4U]

The Windows Phone or any other "third phone OS" can't crack the market is because there are no apps for it. And there are no apps for it because consumers aren't buying the phone.

“The PC guys are not going to just, you know, knock this out“.

I always find it funny when folks talk about new entries not being able to crack the market when the iPhone IS a new entry that DID crack the market. And, they cracked the market with a huger set of obstacles ahead of them than any new competition would have today (in the entire world, only one carrier agreed to carry the iPhone, that wouldn’t exist today). The iPhone today exists because a company, rather than being given special treatment, had to work hard to create the hardware and the features that people desired enough to buy into.

That’s the ONLY way any new competitor is going to come along… if they look at what exists, finds a profitable niche, then grows into that. Making the iPhone MORE desirable (by forcing changes to its business model) would, in effect, reduce the likelihood of competition entering the market. For example, some people say they don’t like the privacy model of Android, but don’t like the locked down nature of the iPhone. With the current size of the cellular phone market, even if only 1% of folks would be interested in such a thing, that’s still a huge windfall to the company that focuses on the hardware and their own OS to put together a compelling enough product.

Instead, what we have are folks that look at the challenge and decide not to even try. If that was Apple’s stance, a company that financially, should not have even TRIED to enter the market, we wouldn’t have the iPhone (or Android either, for that matter… or the Android we’d have would have been copied off of Blackberry instead of Apple).

 

[Unregistered 4U]

And with Android being the only other choice tham means don’t use a cell phone at all. Both options are too bad. For different reasons, but they’re very bad.

Unfortunately for many, the companies that have looked into entering the market MAY have determined that the number of folks that will pay for something different from what’s available aren’t enough to support them trying. Which isn’t a bad thing. I’m sure there are folks looking at EV’s that have checked the entire market and have determined that all of them are very bad for different reasons.

The DOJ should look into this situation where there’s small pockets of folks that don’t like what companies are selling in many markets and force the companies to make what these small groups of folks want.

 

[NervousFish2]

In a legal system based on precedence, yes it does.

Not sure that's true. Precedents change, as any legal historian will tell you. Especially in the area of anti-trust.

 

[NervousFish2]

"...but, if a company isn’t actively using illegal means to extend their monopoly, it’s better to just let the company live or die based on how well they satisfy their customers."

That's not how it works. Anti-trust isn't consumer protection law. It's not even necessarily about illegality. It's about using large-scale practices to distort the market in unfair and anti-competitive ways. There's a degree of subjectivity to it. And if the people have voted a government into power that wants to prosecute that, and they can do so convincingly to a board of economic experts, then changes will come.