Apple Files Motion to Dismiss Department of Justice Antitrust Lawsuit

[Timo_Existencia]

Apple's argument about there being alternatives does not negate antitrust laws.

But a designation as a monopoly is generally required to trigger antitrust laws. It's not just that Apple has competition; it's that Apple has significant competition, and that no company tried under the Sherman Act has ever been found to be a monopoly at the level of market share that Apple has. So Apple's argument that they have significant competition should negate antitrust laws.

From the DOJ Website itself:
"The question should be well settled because antitrust law now requires proof of actual or likely market power or monopoly power to establish most types of antitrust violations."

 

[webkit]

Sure, but it does negate the argument that there is a lack of competition.

It negates the argument that there is no competition, not necessarily that there is a lack of competition. The issue is about about Apple’s dominance in the specific market(s).

That's irrelevant to the DOJ's case. Their case is explicitly based on alleged market power in the smartphone market. Not a mobile OS market. Apple has a great deal of competition in the US smartphone market.

A main competition issue is about iPhone and iOS (both tied together) and how Apple dominates those and/or related markets.

 

[webkit]

The question is one of consumer harm. Has the consumer been harmed by higher prices? No, if anything the App Store drove prices to new lows for software. Has Apple driven out its competitors so it can fix prices in the market? No, as evidenced by the success of Android and the wide range of pricing options.

Every business establishes rules around what it will sell and how you can pay. This notion that somehow Apple's App Store business practices are bad becasue people don't like how Apple setup its ecosystem is misguided, IMHO.

YMMV

When a company has a monopoly or monopoly power in a particular market, it gives them unfair influence/control over current or future competition and innovation, consumer choices, etc. in that market or related markets the dominant company may be looking to compete in. Any restrictions on competition, the development of alternatives, access to alternatives, etc. can be a harm to consumers and businesses now or in the future.

 

[webkit]

Take android away from licensing or open source. That will resolve the “only two major” operating systems each of which are different forks. Force manufacturers to develop their own ecosystem.

Blocking the licensing of operating systems wouldn't be an answer as it could open the door for a wide range of software/OS related concerns including increased fragmentation, reduced economies of scale, compatibility issues, increased barriers to entry, etc. It could drive many companies out of business or discourage companies from going into business and end up making the market less competitive and even more monopolistic than it already is.

Making Android "closed source" wouldn't be an answer either. Windows is "closed source" yet became more dominant in desktop OS than "open source" Android is in mobile OS. Smartphone makers today aren’t likely going to be any more willing to develop their own operating systems than computer makers were/are.

 

[webkit]

But a designation as a monopoly is generally required to trigger antitrust laws. It's not just that Apple has competition; it's that Apple has significant competition, and that no company tried under the Sherman Act has ever been found to be a monopoly at the level of market share that Apple has. So Apple's argument that they have significant competition should negate antitrust laws.

From the DOJ Website itself:
"The question should be well settled because antitrust law now requires proof of actual or likely market power or monopoly power to establish most types of antitrust violations."

What generally "triggers" antitrust matters is dominant companies engaging in anticompetitive behavior. The DOJ has laid out its case for Apple’s dominance (e.g., share of the premium or performance smartphone market) and anticompetitive behavior. This will ultimately be decided one way or another through settlements, concessions, full or partial dismissals, a trial, rulings, appeals, etc. Similar to how the case against MS played out decades ago.

 

[Timo_Existencia]

What generally "triggers" antitrust matters is dominant companies engaging in anticompetitive behavior. The DOJ has laid out its case for Apple’s dominance (e.g., share of the premium or performance smartphone market) and anticompetitive behavior. This will ultimately be decided one way or another through settlements, concessions, full or partial dismissals, a trial, rulings, appeals, etc. Similar to how the case against MS played out decades ago.

Right. But just because the DOJ alleges it doesn't mean that Apple has a dominant position or is a monopoly. As you say, that will be decided elsewhere. And as I've said, nobody with a marketshare the size of Apple's has ever been found to be a monopoly.

So all this "Apple should just do the right thing" sentiment or "Apple is clearly in the wrong" talk is nonsense. A court finding Apple to be a monopoly is a long-shot, and all arguments about antitrust stem from that.

 

[I7guy]

Blocking the licensing of operating systems wouldn't be an answer as it could open the door for a wide range of software/OS related concerns including increased fragmentation, reduced economies of scale, compatibility issues, increased barriers to entry, etc.

Can’t have it all ways. Can’t complain of a duopoly and then say fixing that would result in a wide range of concerns. This is why imo there is nothing here to fix. Market share driven purely by the customer base.

It could drive many companies out of business or discourage companies from going into business and end up making the market less competitive and even more monopolistic than it already is.

Again, can’t have it all ways. Can’t say there’s an issue but the cure is worse than the disease.

Making Android "closed source" wouldn't be an answer either. Windows is "closed source" yet became more dominant in desktop OS than "open source" Android is in mobile OS.

There was no other operating system for the of revolution that took. Ibms os/2 was a failure. And Microsoft’s anticompetitive stature made sure other operating systems tanked. /s yes windows was popular.

Smartphone makers today aren’t likely going to be any more willing to develop their own operating systems than computer makers were/are.

So we’re stuck with a duopoly out of laziness.

 

[FineWoven]

Apple must be feeling confident about what is likely to happen to the DOJ in November (or shortly thereafter) for them to choose to file their motion this close to the month 👀

 

[StyxMaker]

Actually Apple does with imessage. What was and sometimes still is the biggest feature that is used on a mobile phone? text messaging. Apple knows this and thus it want's everyone in the world to use an Apple iphone and the way to do this is to prevent the biggest feature of a mobile phone from working with your competitor (Android) by preventing direct interoperability between their text messaging systems. There are many of us who have family members that are in both camps, iphone users and android users. Both camps should be able to flawlessly text each other without the need for phone settings to change or to install 3rd party apps. An android using family member should be able to just add their iphone using family members contact details into their android phone, press on their contact name in the address book and start texting one another but Apple prevents that from happening because it will not allow Android to use it's imessage system. This gap is bridged by 3rd party app developers but it shouldn't be. If my sister buys an Apple iphone and I have an android phone (Motorola), when she rings me to tell me she has got a new iphone I should be able to just add her new telephone number into my contacts list, save her details, then start texting one another but I can't. If I want to be able to have flawless text messaging between my sister and me without the use of 3rd party apps or either of us having to spend time going into each of our phones settings to change some settings, I cannot do that, I have to by an iphone. THIS is what Apple wants and THIS is why it is anticompetitive.

There are several Android phone users that I text message with my iPhone (and have been for years) we have not had any problems and no settings had to be changed on either end.

 

[jlc1978]

When a company has a monopoly or monopoly power in a particular market,

The first question is:
”Is it a monopoly?”

and the second is:
”Are they using their monopoly to suppress competition by keeping prices high?”

My answers are :

1.No, because they do not have a dominate market position. There a re a numebr of major compiters offerin a chocie of phones.

2. No, because app prices are so low that they can’t force people to pay more tahn $% for most apps since developers must compete on price to sell apps.”

it gives them unfair influence/control over current or future competition and innovation, consumer choices, etc. in that market or related markets the dominant company may be looking to compete in. Any restrictions on competition, the development of alternatives, access to alternatives, etc. can be a harm to consumers and businesses now or in the future.

Consumers still have a choice of OS and phones across a wide spectrum of price. You want a cheap phone? Buy one that runs android and you have access to a lot of apps at a price point similar to those on iOS.

Consumers have choices and can vote with their wallet. Developers can chose what platform they want to deveop for based on how which choice brings them the most revenue. Apple offers a very lucrative user base; while making it easy to get an app to market with little upfront costs compare to how it use to be in the PC market; while offering a return higher than they used to get. If anything, users benefited from lower costs and developers from having much less capital at risk to bring an app to market.

In my case, I am developing a project that is a web based tool for companies to assess risk. It’s a bespoke tool so an app store isn’t a viable option, but if it were I’d gladly give Apple 30% to make enough revenue to warrant being at the level they took that cut; because I remember what it cost for a fraternity brother to bring his to market before he say any revenue. Many people do not know what it took to get a product to market in the old days and thus don’t appreciate what Apple has done for developers, IMHO; or for consumers in terms of app pricing. If anything, Apple has trained people that apps should be cheap, to consumer benefit.

I just don’t see how proposed changes will help small developrs or teh consumer, but that’s my POV. YMMV HAND

 

[BaldiMac]

It negates the argument that there is no competition, not necessarily that there is a lack of competition. The issue is about about Apple’s dominance in the specific market(s).

Ha! A lack of competition and no competition are the exact same thing. I'm not interested in word games.

A main competition issue is about iPhone and iOS (both tied together) and how Apple dominates those and/or related markets.

Nope. That's just forum arguments. I'm talking about the actual argument being made by the DOJ. Their claim of monopoly power is based on the smartphone market which they've inventively tried to reduce down to the "performance" smartphone market in order to approach a reasonable market share threshold.

 

[webkit]

Right. But just because the DOJ alleges it doesn't mean that Apple has a dominant position or is a monopoly. As you say, that will be decided elsewhere. And as I've said, nobody with a marketshare the size of Apple's has ever been found to be a monopoly.

So all this "Apple should just do the right thing" sentiment or "Apple is clearly in the wrong" talk is nonsense. A court finding Apple to be a monopoly is a long-shot, and all arguments about antitrust stem from that.

Not necessarily nonsense. As I said, this will ultimately be decided one way or another through settlements, concessions, full or partial dismissals, a trial, rulings, appeals, etc. Similar to how the case against MS played out decades ago.

 

[webkit]

Can’t have it all ways. Can’t complain of a duopoly and then say fixing that would result in a wide range of concerns. This is why imo there is nothing here to fix. Market share driven purely by the customer base.

The complaint isn’t about just the duopoly (that alone is not illegal), it’s about that combined with the anticompetitive behavior.

Again, can’t have it all ways. Can’t say there’s an issue but the cure is worse than the disease.

Again, the crux of the issue is with Apple's alleged anticompetitive behavior.

So we’re stuck with a duopoly out of laziness.

We're "stuck" because of compatibility factors, barriers to entry factors, benefits of economies of scale, etc.

 

[webkit]

Apple must be feeling confident about what is likely to happen to the DOJ in November (or shortly thereafter) for them to choose to file their motion this close to the month 👀

They would/should be doing this no matter what they think is going to happen in November. It's a natural part of the process.

 

[webkit]

The first question is:
”Is it a monopoly?”

and the second is:
”Are they using their monopoly to suppress competition by keeping prices high?”

My answers are :

1.No, because they do not have a dominate market position. There a re a numebr of major compiters offerin a chocie of phones.

2. No, because app prices are so low that they can’t force people to pay more tahn $% for most apps since developers must compete on price to sell apps.”

All of this depends on how the market is being defined. I believe the DOJ is claiming that Apple has over 65% of the U.S. smartphone market and 70% of the "performance" smartphone market. This could be considered dominance but what you think, I think or the DOJ things isn't really relevant. All of this will ultimately be decided one way or another through settlements, concessions, full or partial dismissals, a trial, rulings, appeals, etc.

Antitrust issues are necessarily about or just about pricing.

Consumers still have a choice of OS and phones across a wide spectrum of price. You want a cheap phone? Buy one that runs android and you have access to a lot of apps at a price point similar to those on iOS.

Consumers have choices and can vote with their wallet. Developers can chose what platform they want to deveop for based on how which choice brings them the most revenue. Apple offers a very lucrative user base; while making it easy to get an app to market with little upfront costs compare to how it use to be in the PC market; while offering a return higher than they used to get. If anything, users benefited from lower costs and developers from having much less capital at risk to bring an app to market.

In my case, I am developing a project that is a web based tool for companies to assess risk. It’s a bespoke tool so an app store isn’t a viable option, but if it were I’d gladly give Apple 30% to make enough revenue to warrant being at the level they took that cut; because I remember what it cost for a fraternity brother to bring his to market before he say any revenue. Many people do not know what it took to get a product to market in the old days and thus don’t appreciate what Apple has done for developers, IMHO; or for consumers in terms of app pricing. If anything, Apple has trained people that apps should be cheap, to consumer benefit.

I just don’t see how proposed changes will help small developrs or teh consumer, but that’s my POV. YMMV HAND

As I;ve already stated, having choices or alternatives does not negate antitrust laws.

 

[webkit]

Ha! A lack of competition and no competition are the exact same thing. I'm not interested in word games.

No, they are not the exact same thing. By "lack of" I was saying insufficient amount which doesn't necessarily mean none.

Lack definition:
The state of being without or not having enough of something.

It sounds like it is YOU who wants to play word games, or are just ignorant to the definition of lack.

Nope. That's just forum arguments. I'm talking about the actual argument being made by the DOJ. Their claim of monopoly power is based on the smartphone market which they've inventively tried to reduce down to the "performance" smartphone market in order to approach a reasonable market share threshold.

It was reduced down to "performance smartphones" but that doesn’t mean iOS isn't still part of the iPhone. As I stated, iPhone and iOS are tied together.

 

[I7guy]

The complaint isn’t about just the duopoly (that alone is not illegal), it’s about that combined with the anticompetitive behavior.

What anticompetitive behavior? That’s just an unproven label.

Again, the crux of the issue is with Apple's alleged anticompetitive behavior.

Again, what anticompetitive behavior? An opinion of anticompetitive behavior (assuming you mean App Store and not in the entirety of the history of apple) is not anticompetitive behavior.

We're "stuck" because of compatibility factors, barriers to entry factors, benefits of economies of scale, etc.

That’s not apples problem and shouldn’t be. Barriers to entry is and shouldn’t be a company’s problem in the space. The real anticompetitive behavior is with the telco companies that own the airwaves. Try buying some spectrum.

 

[jlc1978]

As I;ve already stated, having choices or alternatives does not negate antitrust laws.

True, but it goes a long way to showing a firm, even with a dominant market position, has not suppressed competition; and there is strong competition for Apple. Have a dominant position is not illegal, as long as you got it by building a better product; something arguably Apple has done.

 

[surferfb]

It was reduced down to "performance smartphones" but that doesn’t mean iOS isn't still part of the iPhone. As I stated, iPhone and iOS are tied together.

The fact that the DOJ felt the need to invent a market segment to artificially inflate Apple’s market share definitely says something about the strength of their case.

 

[I7guy]

The fact that the DOJ felt the need to invent a market segment to artificially inflate Apple’s market share definitely says something about the strength of their case.

lol performance smartphone. Anyone can invent any market segment they want. Next one up: smartphone market segment with power buttons on the right side.

Apple has an illegal monopoly in that market.

 

[webkit]

What anticompetitive behavior? That’s just an unproven label.

That can’t be a serious question. You have been engaged in conversations about this long enough to know very well what "anticompetitive behavior" is being alleged.

It's "unproven" at this point but we're still very early in the process. It can certainly end up being "proven" but the process takes a while.

Again, what anticompetitive behavior? An opinion of anticompetitive behavior (assuming you mean App Store and not in the entirety of the history of apple) is not anticompetitive behavior.

Again, that can't possibly be a serious question.

It is anticompetitive behavior if it is determined as such during the legal process but we are still in the early stages here.

That’s not apples problem and shouldn’t be. Barriers to entry is and shouldn’t be a company’s problem in the space. The real anticompetitive behavior is with the telco companies that own the airwaves. Try buying some spectrum.

Being part of a duopoly is not Apple's problem. Being part of a duopoly and engaging in anticompetitive behavior can be Apple's problem.

 

[webkit]

True, but it goes a long way to showing a firm, even with a dominant market position, has not suppressed competition; and there is strong competition for Apple. Have a dominant position is not illegal, as long as you got it by building a better product; something arguably Apple has done.

Having a dominant position is not illegal as long as you are not engaging in anticompetitive behavior that stifles competition and innovation, is being used to gain an unfair advantage in market(s) you are trying to compete in, and so on.... things the DOJ is alleging.

 

[webkit]

The fact that the DOJ felt the need to invent a market segment to artificially inflate Apple’s market share definitely says something about the strength of their case.

It's not that unusual. In an antitrust case against Whole Foods, I believe the market in question was defined as "premium natural and organic supermarkets" rather than supermarkets in general. In another DOJ case (against Penguin Random House) it was defined as the market for "top selling books" rather than books in general. There are others.

 

[Timo_Existencia]

Not necessarily nonsense. As I said, this will ultimately be decided one way or another through settlements, concessions, full or partial dismissals, a trial, rulings, appeals, etc. Similar to how the case against MS played out decades ago.

No, not close to how the case against MS played out. MS, you'll recall, had 90+% marketshare globally. MS was deemed to be an actual monopoly.

Apple is not close to being a monopoly. In fact, Apple's marketshare in the smartphone market in the US is very close to the 60% marketshare that Windows now has in the world. And Apple's global marketshare in smartphones? About 27%

So yes, all this antitrust talk is nonsense in the actual context of actual legal precedent.

 

[Timo_Existencia]

Being part of a duopoly is not Apple's problem. Being part of a duopoly and engaging in anticompetitive behavior can be Apple's problem.

Can you quote the law you're using to make this claim? Court findings? Precedent?