A "natural monopoly", like Ford being the only company making Ford cars, or Apple being the only company making iPhones, does not count as a monopoly as far as anti-competition laws in the USA (or most everywhere) are concerned.
That is not what "natural monopoly" means. A natural monopoly is a monopoly that exists because the barriers to entry are too high for any other company to enter. For example, (wired) cable television is typically a natural monopoly, because in all but the most high-density areas, the cost of wiring up all the houses in an area is high enough that if you have more than one company doing it, they won't break even before the infrastructure is too old and worn out to be useful.
Ford is the only company making Ford cars because of patents and trademarks, which are
government-granted monopolies. That's pretty much the polar opposite of a natural monopoly.
Also, even though Ford is the only company building Ford cars, it is
not the only company making
repair parts for Ford cars. By law, Ford cannot make their warranty contingent on getting repair parts from Ford, and generally speaking, they do not patent individual parts, so third parties make replacements for pretty much everything. If iPhones were cars, you could buy apps from anyone without going through Apple, just as you can buy consumables like gasoline and oil, repair parts, accessories, tires, etc. without going through Ford.
Another thing that you're all missing is that antitrust laws in the United States are
not exclusively a remedy for abuse by a monopoly. Antitrust laws govern a wide range of anticompetitive practices, and can be used against companies even if they are not in a monopoly position. With the exception of a few specific sections that are specific to monopolies, there is no meaningful legal difference between a market with only two major players and a market with only one in terms of the extent to which antitrust laws affect the companies involved.
Moreover, as Apple creates non-cross-platform features that users grow dependent upon (e.g. FaceTime), it creates barriers to changing platforms that at some point will be so severe that they will effectively bifurcate the market for mobile software just as surely as a chain of mountains bifurcates a physical market. So arguments that "iOS apps are not a market" are misleading. What they are really claiming is that iOS apps are not an independent market
yet.
Either way, the issues brought up in this case have nothing whatsoever to do with monopolies (the subject of the Sherman antitrust act), and everything to do with restraint of trade issues — specifically, alleged violations of the Wilson Tariff Act, the Clayton Antitrust Act, etc. — you know, the
rest of 15 U.S.C.
And what all the car analogies miss is this fundamental truth: Tech companies are in a unique position to restrain trade related to their platform by preventing the use of third-party accessories and software with their devices in a way that car companies would be unlikely to succeed at. And Apple does so far more than nearly any other company out there. And consumers are unquestionably harmed.
As an example, Apple's in-app-purchase rules currently prevent companies from selling non-physical products (e.g. subscriptions) in their iOS apps or providing links to their websites where such products are sold, unless they give Apple a cut. The only reason Apple can get away with such restrictive policies across their entire platform, of course, is that developers have no choice in the matter, because there are no third-party app stores on iOS, and the alternative is to cede half of all U.S. cell phone users to their competitors. Thus, Apple is leveraging their terms and conditions to restrict consumer choice and drive up prices for goods and services in an unrelated area — the very thing that various FTC laws were designed to prevent.
Now, certain restraint of trade can be legal, but only if there is due consideration. One could reasonably argue that there is no consideration in exchange for that restraint of trade here:
- The argument that the App Store is a consideration falls flat, because companies like Netflix (for example) are more than capable of distributing their own binaries without difficulty, and given the option, would do so rather than accept Apple's limitations.
- Similarly, the argument that providing the right to develop iPhone apps in the first place is a form of consideration also falls flat, because the only reason that third-party developers would need Apple's permission to create iOS apps is because of technical measures that Apple deliberately put in place to prevent running apps that are not signed by Apple. An agreement to not deliberately harm someone should almost certainly not be treated as consideration.
- Finally, the argument that the app store driving users to buy the subscription constitutes consideration relies on the prima facie ludicrous implication that there exists even a single consumer who has miraculously never heard of Netflix and thus would never have paid for a subscription account, had they not somehow accidentally discovered Netflix by downloading it from the iOS App Store. Such a policy would be much more defensible if there were multiple app stores, if it were realistically possible for users to side-load apps, and if the policy were waived for subscriptions that are only incidentally connected to the app (e.g. Netflix, Spotify, etc.), but as written, the legal gymnastics required to defend such a position are mind-blowing.
Based on that, I could
easily see the courts holding Apple's terms and conditions to be in violation of multiple parts of 15 U.S.C.
Put another way, there's a reason Apple is trying so hard to prevent the case from actually going to trial in the first place. If they thought it was a slam dunk, they would likely have let it go to trial on its own merits instead of trying to kill it on entirely absurd procedural grounds.
And make no mistake, their procedural argument was absolute crap. Ignoring that
Brick Co. v. Illinois is basically moot under California's antitrust laws (the body of law under which Apple's Terms and Conditions are required to be interpreted) as affirmed by the Supreme Court previously in
California v. ARC America Corp, the original rejection also relies on what is IMO a severe misreading of
Brick. The direct purchasers in this case are not the people making the in-app purchases, but rather the developers who purchased developer program memberships, claiming that their right to trade is being illegally restrained.
Further, because the agreement at issue is between the Apple Developer Program member and the app developer, rather than merely being some hypothetical illegal action by someone higher up in a supply chain performed in relative isolation from companies that are lower in the chain, any lawsuit brought by the consumer would necessarily require the app developer to be a codefendant, and
Brick cannot rationally be applied to situations in which doing so would prevent a company from suing for injunctive relief from unreasonable contract terms that would put it at risk of direct financial harm. In fact, I would argue that the developers are likely the
only people with standing to sue over those terms and conditions.
I think it is highly likely that in one way or another, Apple's preliminary motion to dismiss for lack of standing will end up quashed, and assuming the case does actually gets heard in court, I would expect Apple to quickly offer a settlement rather than risk losing badly.
Just my $0.02.
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You have no more knowledge of this than that you managed to Google.
The person you are replying to is absolutely correct. Anticompetitive acts need only meaningfully reduce competition to be found illegal under U.S. antitrust law. There is no requirement that a monopoly exist. The word "trust" does not mean monopoly, but rather a group of businesses in some way working together or combining together. To that end, the combining of multiple business can create a monopoly, and in those cases, combining those businesses can be prevented by anti-trust laws, but those laws make up just a tiny portion of 15 U.S.C.
Companies with actual monopolies do, of course, get extra scrutiny, and various anticompetitive actions are more likely to be found to cause harm in the case of a monopoly, but in most of the antitrust laws, nothing precludes action against a company for anticompetitive behavior even if the company has only a mere 1% of market share, much less nearly half. That's why Apple got spanked in that antitrust lawsuit over iBooks, despite being a niche player in the electronic books market, percentage-wise.
