The other guy was talking about Section 2 of the Sherman Anti-trust Act and I was using the word monopoly within his context. Anyway,
this article explains what I was getting at better than I did. I'm pretty sure this is BC2009's point as well.
Great article -- I had not seen that particular one, but had read some of the sources it cites and other articles that capture parts of that. The article you reference is a very thorough piece covering several aspects of this issue. Nice find!
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Antitrust claims against a single firm require "significant and durable market power" "plus exclusionary or predatory acts without business justification." That is how the FTC defines a monopoly, so to say a monopoly is not required is just semantics. No one is arguing that a literal monopoly is required.
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Very good point. I think part of the problem on this thread is the way in which the word "monopoly" is being used. Some folks saying "100% of the market" defines a monopoly, others saying a significant portion. "Significant" is certainly true (left to the courts to decide the meaning, with precedents of course). The other word I love is "durable" because this is a good single word to show that short-term market leadership does not mean "monopoly". The US economy is fundamentally capitalist, this means that with the passage of time the market should correct itself. The phrase "significant and durable market power" sums that up so well.
I also like the "without business justification" -- you can be "exclusionary and predatory" providing there is a sound business justification for it. This plays to my previous analogy of "Orange Julius setting up a sample stand inside McDonalds". McDonalds could be exclusionary and kick them out and there is a very good business justification. Amazon wants to setup their own shop inside Apple's ecosystem, Apple can say "not unless you play by our rules" just like Amazon can refuse to sell Macs or make the folks who sell on the "Amazon Marketplace" play by Amazon's rules.
I don't know how you're interpreting that quote but to me it looks like it's saying that a company (IE Apple) can't create an agreement with a customer, or pricefix for the customer, if the conditions of the agreement/pricing say the customer is not allowed to buy from its competitors. In addition, the agreement also has to either create a monopoly or significantly decrease competition.
If a developer wants to write for iOS, there's no condition that says they can't write for Android. If a customer purchases OSX, the license doesn't say they can't buy a copy of windows. If Amazon wants to port its Kindle software to iOS, there's no contract that says Amazon can't port the software to other tablets or E-readers. So exactly how is Apple in violation?
Great points.
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To put it simply, Apple invested heavily for the past 12 years in conquering the digital media turf they have claimed. They worked with the music industry to secure deals and make the iPod / iTunes music store a success. This meant "playing ball" with folks who had previously invested heavily to own the rights to large chunks of the music licensing rights. Apple then went on to secure contracts with the movie industry. Again, they had to play ball with the movie studios who had previously invested in a business that secured them a place with movie and television rights. Apple is now turning to publishers to make deals with them -- and they offered publishers a MUCH better deal than Amazon was offering with Kindle (I believe under the pre-iPad Kindle model, Amazon got the lion's share of the revenue, whereas, Apple asked for the same 30% they've always asked for).
With each deal Apple has made and maintained through good faith, they have established an ecosystem. All the while, they invested in and developed an innovative mobile computing platform to deliver all this digital media. They did this one step at a time -- not in one fell swoop. First the iPod with music, then the iPod & iPhone with music, videos and apps, then the iPad with music, video, apps, and books.
Now that Apple has established their place, they are of course asking those who want to get on board to play ball with them. This is no different than what the music labels, movie studios, and publishers did to everyone else. Their turf was content -- Apple's turf is a digital media ecosystem with a huge user base.
But folks don't want to play ball with Apple and are crying foul. Folks like Google are frustrated that they can't recreate what Apple did overnight (nor what Facebook did). Google and Amazon both turned their backs on the music industry in favor of their "hard drive in the sky" cloud solution, instead of "playing ball" and they are getting sued over it. Google tried to circumvent the TV studios with Google TV which the TV studious subsequently blocked from website access. Seems to me that Amazon is just upset that the Kindle platform they popularized by selling books at an unsustainable loss did not become bigger and more ubiquitous prior to the rise of the iPad. If Amazon's Kindle was overly dominant and they owned the eReader market and tried to parlay that market into an "apps" market, then the terms that Amazon would be offering would be far worse than what Apple is asking for if history is any indicator.
I'm not crying for Amazon. They have screwed their partners and providers time and again. I shutter to think of the terms they offer on the "Amazon Marketplace" if the terms they offered to independent authors is any indication.
UPDATE: I looked up Amazon's
FAQ for Marketplace Sellers....
1) A 0.99 fee per sale + 6% to 25%
commission for Amazon for non-Pro sellers
2) 6% to 25%
commission for Amazon for "Pro Sellers" who pay Amazon $40 per month
3) A "
variable closing fee" is also charged for many types of items (per item or per pound).
4) 14-day float/hold on revenue payouts from Amazon
Actually seems pretty fair and very comparable to Apple. Upside to Apple is that when a customer is within your app they are not going to see prices on comparable items from Apple and other sellers. Downside is that Apple wants a flat 30% and does not distinguish based on the type of item being sold which is better for inexpensive items and worse for expensive ones (Amazon's $0.99 per item and "variable closing fees" can be fairly hefty for inexpensive items). Either way, one could argue that Amazon is being anti-competitive by asking for a referral fee for items sold through their marketplace, especially when Amazon is selling the exact same items, but one would be wrong.