Tim Cook's Appearance at Upcoming Antitrust Hearing Highlights Apple's Political Balancing Act

[MacRumors]

Apple CEO Tim Cook is set to join Amazon CEO Jeff Bezos, Alphabet/Google CEO Sundar Pichai, and Facebook CEO Mark Zuckerberg in an antitrust hearing held by the House Judiciary Antitrust Subcommittee next Monday, but a new report by The Information takes a look at Cook's reluctance to participate in the hearing and how he and Apple have tried to navigate a polarized political environment.

Some two weeks after the other tech CEOs had agreed to participate in the hearing, Cook was still holding out for fear of getting caught up in issues more relevant to those other companies than Apple.

There was a simple reason for his holdout. According to people familiar with his thinking, Cook was firm in his belief that Apple didn't belong with a group of companies increasingly viewed as antitrust malefactors by lawmakers and regulators, including Amazon, Facebook and Google. What’s more, Cook had spent much of the last four years mostly avoiding the kind of toxic political environment that has engulfed the CEOs of those companies over everything from privacy to censorship to treatment of workers.

But under the pressure of a potential subpoena from Representative David Cicilline, chairman of the committee and a critic of Apple's App Store policies, Cook ultimately agreed to participate in the hearing.

The report indicates that Cook has spent the better part of a month preparing for the hearing, which may touch on a wide range of subjects from App Store policies to Apple's disputes with the FBI over providing methods for law enforcement to access locked devices to Apple's relationships with China.

The full paywalled report goes into much more detail about how Cook has delicately balanced relationships on both ends of the political spectrum, trying to stay above the fray largely by keeping quiet. That approach has helped Apple maintain stability in turbulent times, winning exemptions from tariffs on many of its products and avoiding much of the scrutiny that has been aimed at other tech companies.

Still, Apple and Cook aren't completely immune to criticism, and it remains to be seen whether next week's hearing will lead to any action on antitrust and other fronts.

Note: Due to the political or social nature of the discussion regarding this topic, the discussion thread is located in our Political News forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

Article Link: Tim Cook's Appearance at Upcoming Antitrust Hearing Highlights Apple's Political Balancing Act

 

[Expos of 1969]

This has the potential to be very interesting. No predictions from me at this point. Let's see how it plays out.

 

[Carnegie]

Apple shouldn’t be considered to have monopoly power, for antitrust law purposes, based on its control of the App Store and its dominance of iOS app distribution. But, unfortunately, based on the way our antitrust laws work it easily could be considered to. The relevant market should be something like apps distribution or even smartphone apps distribution. But as our laws work, iOS apps distribution could be considered a relevant market in itself. It‘s a flaw with current antitrust doctrine.

 

[Cosmosent]

Monday, July 27th is just the start.

New Law will begin to be drafted shortly after that !

The General Public will hear the details 1-3 weeks later.

 

[Joe The Dragon]

the webkit lock in in the app store needs to go

 

[I7guy]

Some two weeks after the other tech CEOs had agreed to participate in the hearing, Cook was still holding out for fear of getting caught up in issues more relevant to those other companies than Apple.

I believe there is some sentiment that believe these issues are more relevant to Apple than those other companies. But we'll see how this plays out.

 

[Rogifan]

I heard Twitter was invited. Not sure what that company has to do with anti-trust. My guess is some members will try and steer this meeting into being about tech bias and censorship.

 

[AtomicDusk]

I'm curious to watch this, I hope that Representative Cicilline examines all Digital marketplaces selling digital goods as opposed to being critical of the App Store simply because it's Apple. I believe it would be shortsighted to assess the App Store without examining the entirety of the landscape of digital marketplaces.

My personal opinion is that Apple's App Store does have a high cost of doing business, and those costs will be either be eaten by the developer or passed on to the consumer. I as a consumer have two choices, 1. use the Apple ecosystem which tacitly tells apple that I am okay with these practices or 2. switch to another platform in protest.

I have to weigh if there is value in the possible extra costs brought on by the App Store cut. But that decision is a personal choice, a choice for which I have an alternative. It is my assessment that since I have a choice to enter and leave this ecosystem at will, that it should not be subject to monopoly inquiry; however, I'm not a legal scholar, I've not studied the law, and for all I know the App Store practices may well still fall under anti-trust regulation.

 

[iBluetooth]

Apple shouldn’t be considered to have monopoly power, for antitrust law purposes, based on its control of the App Store and its dominance of iOS app distribution. But, unfortunately, based on the way our antitrust laws work it easily could be considered to. The relevant market should be something like apps distribution or even smartphone apps distribution. But as our laws work, iOS apps distribution could be considered a relevant market in itself. It‘s a flaw with current antitrust doctrine.

Interesting so as iOS has only 15% share of the world market and 30% in USA vs. Android, then lawmakers might redefine the market as iOS and then they have 100% market share in the AppStore. But, then they also have 100% share in devices and will they then be enforced to allow other manufactures to make and sell iOS phones. Where does this end as they also have monopoly on their CPU's, should they be forced to sell them to Android manufacturers, would be interesting to see so powerful cpu in those phones

 

[Kabeyun]

Still, Apple and Cook aren't completely immune to criticism

LMAO! Just stop by MacRumors, kids! A former fan site taken over by Apple trolls and hate baiters!! An Apple-enthusiast site where Apple enthusiasts dare not suggest it or they’re called names! Want criticism? Head on over!

 

[Williesleg]

Tim Cook needs to step down. There isn't enough diversity at Apple, especially at the top.

 

[az431]

Apple shouldn’t be considered to have monopoly power, for antitrust law purposes, based on its control of the App Store and its dominance of iOS app distribution. But, unfortunately, based on the way our antitrust laws work it easily could be considered to. The relevant market should be something like apps distribution or even smartphone apps distribution. But as our laws work, iOS apps distribution could be considered a relevant market in itself. It‘s a flaw with current antitrust doctrine.

It doesn’t sound like you, like most people, have an inkling on how the antritrust laws work.

People get caught up in whether a company has a monopoly or not, but monopolies are not per se illegal. What antitrust law prohibits is conduct that results in an unreasonable restraint on trade such as fixing prices, competitors dividing markets with each other, and bid rigging. Moreover, this applies to horizontal monopolies, not vertical monopolies where companies are free to select and dictate prices to their retailers. In any case, if a company acquires monopoly power by virtue of fair competion, it is not an illegal monopoly.

The crux of any case against Apple is establishing that Apple unreasonably restrains trade by not allowing competing app stores, thereby harming consumers. This is is predicated on an argument that competing app stores would offer lower comissions to developers, thereby reducing the cost of apps to consumers.

The problem with that argument is that it overlooks that developers are already free to compete amongst each other and set their own prices. Fair competition is the goal of the antitrust laws, and if fair competition exists, then it is irrelevant what consumers ultimately pay as long as it is the product of competition.

 

[benlukes]

Interesting so as iOS has only 15% share of the world market and 30% in USA vs. Android, then lawmakers might redefine the market as iOS and then they have 100% market share in the AppStore. But, then they also have 100% share in devices and will they then be enforced to allow other manufactures to make and sell iOS phones. Where does this end as they also have monopoly on their CPU's, should they be forced to sell them to Android manufacturers, would be interesting to see so powerful cpu in those phones

yeah, they should allow other manufacturers to use iOS and MacOS. I would buy a new computer in a heartbeat if I could buy a non-Apple computer with MacOS. Apple utilizes a host of monopolistic practices, that have strongly sullied their public image to me (and others). I have been using Apple products since I was 5 back in the early 90s, so I have some perspective on the company.

EDIT: just look at what Microsoft was accused of doing in its antitrust case...that’s standard practice for Apple and many others now.

 

[Carnegie]

It doesn’t sound like you, like most people, have an inkling on how the antritrust laws work.

People get caught up in whether a company has a monopoly or not, but monopolies are not per se illegal. What antitrust law prohibits is conduct that results in an unreasonable restraint on trade such as fixing prices, competitors dividing markets with each other, and bid rigging. Moreover, this applies to horizontal monopolies, not vertical monopolies where companies are free to select and dictate prices to their retailers. In any case, if a company acquires monopoly power by virtue of fair competion, it is not an illegal monopoly.

The crux of any case against Apple is establishing that Apple unreasonably restrains trade by not allowing competing app stores, thereby harming consumers. This is is predicated on an argument that competing app stores would offer lower comissions to developers, thereby reducing the cost of apps to consumers.

The problem with that argument is that it overlooks that developers are already free to compete amongst each other and set their own prices. Fair competition is the goal of the antitrust laws, and if fair competition exists, then it is irrelevant what consumers ultimately pay as long as it is the product of competition.

I'm quite familiar with how antitrust law works in the United States. I didn't suggest that having monopoly power was per se illegal. But having monopoly power in a relevant market is relevant to whether certain provisions of our antitrust laws have been violated. More is required, of course.

My comment related to how relevant markets are identified. And based on how our antitrust laws work, iOS app distribution could be considered a relevant market in itself. Thus using monopoly power, in certain ways, in that relevant market could represent a violation of our antitrust laws. That shouldn't be considered a relevant market in itself, but the way our antitrust laws work could allow it to be.

 

[magicschoolbus]

we need another trustbuster.. Theodore Roosevelt would have so much fun in this day and age

 

[Carnegie]

Interesting so as iOS has only 15% share of the world market and 30% in USA vs. Android, then lawmakers might redefine the market as iOS and then they have 100% market share in the AppStore. But, then they also have 100% share in devices and will they then be enforced to allow other manufactures to make and sell iOS phones. Where does this end as they also have monopoly on their CPU's, should they be forced to sell them to Android manufacturers, would be interesting to see so powerful cpu in those phones

The consideration of whether iOS devices themselves represented relevant markets (or a relevant market) would be a little different from the consideration of whether iOS app distribution was one. It would be a tougher case to make based on how such relevant markets are identified.

I won't get lost in the nuance, but it generally has to do with pricing power and whether increasing prices would cause consumers to choose other options. Increasing the prices of iOS apps (effectively though increasing the rate Apple charges developers?) might not cause many to switch to getting apps elsewhere or getting non-iOS apps (because people already own iOS devices) whereas increasing the prices of iOS devices might cause more people to switch to non-iOS devices.

 

[Dj64Mk7]

It doesn’t sound like you, like most people, have an inkling on how the antritrust laws work.

People get caught up in whether a company has a monopoly or not, but monopolies are not per se illegal. What antitrust law prohibits is conduct that results in an unreasonable restraint on trade such as fixing prices, competitors dividing markets with each other, and bid rigging. Moreover, this applies to horizontal monopolies, not vertical monopolies where companies are free to select and dictate prices to their retailers. In any case, if a company acquires monopoly power by virtue of fair competion, it is not an illegal monopoly.

The crux of any case against Apple is establishing that Apple unreasonably restrains trade by not allowing competing app stores, thereby harming consumers. This is is predicated on an argument that competing app stores would offer lower comissions to developers, thereby reducing the cost of apps to consumers.

The problem with that argument is that it overlooks that developers are already free to compete amongst each other and set their own prices. Fair competition is the goal of the antitrust laws, and if fair competition exists, then it is irrelevant what consumers ultimately pay as long as it is the product of competition.

Honest question because I am curious now: what is the difference?

 

[nylonsteel]

the 4 horsemen of tech
sounds biblical

 

[Carnegie]

Honest question because I am curious now: what is the difference?

Horizontal refers to agreements or mergers between competitors. Vertical refers to agreements or mergers between buyers and sellers. If Nike and Converse agreed to fix prices, that would be a horizontal agreement. If Walmart agreed with one of its suppliers to fix prices, that would be a vertical agreement.

This is a concept that really matters when it comes to violations of Section 1 of the Sherman Act or Section 7 of the Clayton Act. With Apple's App Store situation, it's more likely that it will have a problem with Section 2 of the Sherman Act - so this isn't a concept that's as relevant to this discussion.

Section 2 of the Sherman Act deals with monopolization. It's a violation to (1) have monopoly power and (2) engage in exclusionary conduct which is causally connected with that monopoly power.

Section 1 of the Sherman Act relates to agreements with other parties in restraint of trade. It might be illegal for Ford and GM to agree to do certain things. That would be a horizontal agreement. But it might also be illegal for Ford and car dealers to agree to do certain things. That would be a vertical agreement. Both can be antitrust violations, though the different kinds of agreements are analyzed differently. Some kinds of agreements are per se illegal, some are analyzed using the rule of reason.

Section 7 of the Clayton Act relates to anticompetitive mergers. Such mergers can be horizontal or vertical.

 

[Dj64Mk7]

Horizontal refers to agreements or mergers between competitors. Vertical refers to agreements or mergers between buyers and sellers. If Nike and Converse agreed to fix prices, that would be a horizontal agreement. If Walmart agreed with one of its suppliers to fix prices, that would be a vertical agreement.

This is a concept that really matters when it comes to violations of Section 1 of the Sherman Act or Section 7 of the Clayton Act. With Apple's App Store situation, it's more likely that it will have a problem with Section 2 of the Sherman Act - so this isn't a concept that's as relevant to this discussion.

Section 2 of the Sherman Act deals with monopolization. It's a violation to (1) have monopoly power and (2) engage in exclusionary conduct which is causally connected with that monopoly power.

Section 1 of the Sherman Act relates to agreements with other parties in restraint of trade. It might be illegal for Ford and GM to agree to do certain things. That would be a horizontal agreement. But it might also be illegal for Ford and car dealers to agree to do certain things. That would be a vertical agreement. Both can be antitrust violations, though the different kinds of agreements are analyzed differently. Some kinds of agreements are per se illegal, some are analyzed using the rule of reason.

Section 7 of the Clayton Act relates to anticompetitive mergers. Such mergers can be horizontal or vertical.

I'm sorry…what?