Will Kindle App Survive Apple's Deadline for iOS Content Purchasing Compliance?

[Liquorpuki]

Can you show where I have said that when you use in-app purchases Apple doesn't deserve a cut.

You didn't, but I never said you did either.

I said 30% cut. That's what you guys were disqualifying.

The freenium model existed before Apple made In-App Purchases. So now you're saying Apple was fine before, and now that they've introduced their own payment processor, there is no way to survive for them unless they force it on someone ?

No. I'm saying now they've introduced the Store Kit, they have to take a cut.

Uh ? What are you talking about the freenium model didn't exist back then ? Skype, Kindle, Comixology were all there before In-App Purchases and were all offering goods for sale before In-App Purchases.

In-App Purchases if anything was Apple seeing what was being done and wanting a piece of the pie for themselves.

Here's my point and I'll be more specific next time. Before In-App Purchase, Freemium was small-scale and Apple could ignore it. Nobody even knew who the hell Lodsys was back then.

In App Purchase blew the model up, drew in Zynga, Ngmoco, Playforge, IUGO, all those other devs that now make a killing strictly by using the Store Kit. Things like offer walls got banned and reincarnated as Freemium and big money devs like Gameloft and EA, who used to do the one time purchase, are now embracing Freemium as well. With all that money going back and forth on their platform as a result of Freemium and Freemium coming in at the expense of the one-time purchase, I think it's reasonable for Apple to want to duplicate the 70/30 split they get from the one-time purchase, on the in-app purchase.

I personally don't like Apple forcing IAP on legacy apps like Kindle that were generating their own revenue before IAP. This is partially what you're getting at and I don't like it either. But that's a business strategy. Apple is playing chicken with those companies. If they don't want to surrender 30%, they'll walk. If they do, nothing changes.

Next you'll be telling me there were no ads in apps before iAds ?

No I won't.

So we agree that forcing IAP onto developers for sheer greed instead of letting it compete on its merit is wrong and could hurt the platform and ultimately, the end-user ? Good.

I agree it's being forced. That's about it.

But it's bad enough that you don't get that my point isn't the 30%. No matter my personal opinion on the 30%, this isn't the issue. The issue is IAP being forced unto developers. Maybe if you'd stop derailing the conversation so much away from that very point...

I stepped in the conversation when you guys were saying things like, Apple charges 30%, but Visa only charges 5%, Marksman that list you gave doesn't add up to 30%, and, this quote right here says Apple is charging 30% only for payment processing (even though it wasn't). If the issue changed since then, it's because someone else was hedging their argument.

 

[KnightWRX]

I stepped in the conversation when you guys were saying things like, Apple charges 30%, but Visa only charges 5%, Marksman that list you gave doesn't add up to 30%, and, this quote right here says Apple is charging 30% only for payment processing (even though it wasn't). If the issue changed since then, it's because someone else was hedging their argument.

Visa has all the same costs as Apple as far as payment processing goes. So yes, the 30% is overpriced, but again, that wouldn't even be a problem if Apple let it stand on its own accord in the market.

Marksman's point was that forcing everyone to use it was fine because Apple has all these "costs". I disagree with that, there's never a good reason to force anyone to do things, especially when it might hurt the developers, the end-user and the eco-system itself.

 

[lord_flash]

As a publisher...

...of content to both Kindle and iBookstore platforms (as well as a cool App conversion of a book) I simply can't understand why Apple would make things so difficult for the Amazon App. Given the understandable but restrictive approach their bookstore follows (books are carefully examined for quality, or mentioning the word Kindle), it seems unfair to block access to other stores.

In the long run, you'll just upset users of your platform by being closed about book content; it is, rightly, a more emotive issue (censorship, for that's what it is) than the App store excuse of 'quality control'.

Apple seem to be building a reputation for the frustration of their users (and developers) goals far faster than Microsoft did, and on such an exciting platform that seems a real shame. And in the internet age, surely it'll start to cost their bottom line soon. Perhaps already, as iPad sales fell below Apple's hopes and the Playbook has a lot of my friends excited. The Flash point is still, well, a flashpoint.

 

[EricNau]

Given the understandable but restrictive approach their bookstore follows (books are carefully examined for quality, or mentioning the word Kindle), it seems unfair to block access to other stores.

That's been one of my complaints about Kindle books: too many errors (typos, formatting, etc.), and I'm curious: do you think Apple does a better job at ebook quality control than amazon?

Not that this justifies Apple in any way, I'm just curious.

 

[singlestick]

That's been one of my complaints about Kindle books: too many errors (typos, formatting, etc.), and I'm curious: do you think Apple does a better job at ebook quality control than amazon?

Not that this justifies Apple in any way, I'm just curious.

I don't see that Apple does a better job than Amazon. They use the same sources for their ebooks, as far as I can tell.

 

[lord_flash]

That's been one of my complaints about Kindle books: too many errors (typos, formatting, etc.), and I'm curious: do you think Apple does a better job at ebook quality control than amazon?

Not that this justifies Apple in any way, I'm just curious.

I can only speak to my own experience, but Apple's checks don't seem to extend to typos or formatting, but they certainly ran a word-search on "kindle". They also checked image resolution (and rejected ePubs created using their own Pages app!). Our users have spotted typos in our app so we did a free update, but I think the associating with typos on Kindle is more because you can get a lot of free and scanned OCR books while the iBookstore titles are generally digitally created by publishers, so are better quality files. The same books in Kindle will also be in good condition, there's just wider access to the crap.

 

[BC2009]

Apple has a very large share of the tablet and app store markets (relative to other app stores and tablets). It can use this dominance to manipulate the nature of the market, and exclude other competitors from realistically having an equal playing field. You don't need 100% of the market, or even 50% of the market necessarily, to be guilty of this. All that matters is that a company uses its market influence as leverage in other sectors.

With these cases it always depends on how broadly or how narrowly the market is defined. Computers, versus Mobile Computers, versus tablets, versus e-Readers, etc.... This is what lawyers spend most of their time arguing about in these cases.

However, in this case, if you are looking at the smartphone market, clearly Apple does not hold a monopoly -- Android's share is irrefutably large -- and this market is much larger than tablets for in-app purchases. Further, the tablet market that Apple created is only 16 months old, so its a bit premature for legal actions claiming "monopolies" when the competitors have barely tried to put something forth. Typically, anti-trust and anti-monopoly litigation is for established defined markets where one vendor obtains a commanding a position in that market. It would be difficult to prove that Apple's dominance of a market that they created (or redefined) just 16-months ago requires government intervention to maintain a competitive market. Certainly, if Apple's actions versus publishers are truly as bad as people say, this should be a great opportunity for a competitor to capitalize. If you look at the pre-iPad tablet market you'd probably see that its smaller in total value and total units sold than the non-Apple portion of the tablet market today. This means that Apple's entry into the tablet market has had the net effect of helping their competitors.

I remain firm in saying that "anti-trust" litigation against Apple regarding in-app purchases would be a waste of time since it would quickly be dismissed. And when you say "All that matters is that a company uses its market influence as leverage in other sectors", you are absolutely wrong. Every company uses its market influence as leverage in other sectors.

 

[CalBoy]

I remain firm in saying that "anti-trust" litigation against Apple regarding in-app purchases would be a waste of time since it would quickly be dismissed. And when you say "All that matters is that a company uses its market influence as leverage in other sectors", you are absolutely wrong. Every company uses its market influence as leverage in other sectors.

Leverage to gain a better deal with a supplier, purchaser, etc, maybe, but not when using that leverage to create a disadvantage for competitors. That is the essence of trust behavior.

If you use your market dominance to make it difficult for competitors to offer their services, then you are technically in violation of the Sherman Anti-Trust Act. The only exceptions to this are when the government grants you a monopoly, or when you have certain patents are copyrights that are uniquely your own. That isn't the case with the iPad and the Kindle App. Apple is trying to use its powerful presence in the mobile sector (all phones, tablets, and handheld devices like iPods) to force competitors to give it a bigger chunk of the pie to Apple or to sacrifice sales opportunities (and guess which iBookstore would pick up the slack?).

As for timing, nothing to my knowledge requires a certain timeframe for anti-trust allegations to stand. All that matters is that you use your position in an uncompetitive way to gain an advantage. A single instance is sufficient.

 

[BC2009]

Leverage to gain a better deal with a supplier, purchaser, etc, maybe, but not when using that leverage to create a disadvantage for competitors. That is the essence of trust behavior.

Every attempt to gain an advantage over your competitors creates a disadvantage for your competitors. It is called Capitalism.

If you use your market dominance to make it difficult for competitors to offer their services, then you are technically in violation of the Sherman Anti-Trust Act. The only exceptions to this are when the government grants you a monopoly, or when you have certain patents are copyrights that are uniquely your own. That isn't the case with the iPad and the Kindle App. Apple is trying to use its powerful presence in the mobile sector (all phones, tablets, and handheld devices like iPods) to force competitors to give it a bigger chunk of the pie to Apple or to sacrifice sales opportunities (and guess which iBookstore would pick up the slack?).

If you want to look at the market as "all phones, tablets, and handheld devices" then you would be extremely hard-pressed to show that Apple has a monopoly in this segment. The purpose of the Sherman Anti-Trust act was to stop a monopoly or group of companies from preventing others from competing fairly. Since Apple is acting on its own, you would have to prove that they are a monopoly. However, Android's smartphone market-share surge would clearly prove otherwise. The only chance you would have of proving monopoly would be if you considered the market of tablets + eReaders together and excluded handhelds & smartphones (good luck with defining the market that way in court). Then you would have to convince a judge that government intervention is in order to preserve competition in an emerging market rather than let competition takes its course (when the preference is to let the system regulate itself and then intervene if a serious problem emerges). Also, if you consider the tablet+eReader market, then prior to the iPad one could argue that Amazon held the dominant/monopoly position with the Kindle -- and I don't think Amazon was allowing anybody else to sell books from their own stores on the Kindle -- and they still don't. Again, since Apple has now usurped Amazon's top position, this is simply evidence that the market is volatile and emerging and that a steady-state has not yet been reached.

As for timing, nothing to my knowledge requires a certain timeframe for anti-trust allegations to stand. All that matters is that you use your position in an uncompetitive way to gain an advantage. A single instance is sufficient.

It is NOT all that matters. Competition in a capitalist market is cut-throat. Every move is to gain an advantage over your competitors. Capitalist systems assume that the best companies will fair well and some will fail while others may find a niche. If you government-regulate every move in a capitalist system, it is no longer capitalist. Government regulations exist because no system is perfect, but they cannot be used to micro-manage markets (especially emerging ones).

The first section of Sherman deals with trusts or conspiracies between companies to preserve a market for themselves while excluding others (e.g. price fixing agreements). The second section of the Sherman Anti-Trust Act begins as follows (my emphasis):

"Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony..."

If Apple is guilty for wanting a 30% cut, then Amazon is guilty of excluding competing bookstores from selling on Kindle. Since neither has a monopoly, by your rules, both would be equally guilty. The key element here is that you must prove that a monopoly exists. Since Kindle readers exist for handhelds, tablets, and eReaders the most-likely "market" definition would include all of the above, and proving an Apple monopoly in that scenario would be impossible with 500k Android activations per day.

 

[CalBoy]

Every attempt to gain an advantage over your competitors creates a disadvantage for your competitors. It is called Capitalism.

Yes, but that's not what the law is concerned with.

I'm not going to bother quoting your entire post because I honestly don't have the time to go point by point. I'll be succinct and address only the pertinent issues:

1) As you yourself quoted, the Sherman Anti-Trust Act address monopolistic behavior, not monopolies. One can monopolize a market without having 100% of the market. Windows and Internet Explorer 12 years ago is a perfect example. Microsoft never achieved 100% of the market in either category, and yet it was able to use its power in one market (operating systems) to unfairly influence the market in another sector (internet browsers). The entire issue boiled down to a non-competitive factor controlling the market. Microsoft wasn't advancing itself because of better price, better product, etc, but rather through "better muscle" which is not a legal way to compete.

In Apple's situation, the circumstances can become anti-competitive if competitors to the iBookstore (or even iTunes TV and movies selection) are forced to accept uncompetitive terms just to play ball. Apple may not have a majority in very many markets (absent tablet computing), but it does represent a very large chunk of revenues and end user outlets. Companies like Amazon's Kindle Store, Netflix, Pandora, Skype, etc, would be hard pressed to exist in the market if they were excluded from such a large share of the market. That's the key. Apple can use its position as an end-user delivery company to unfairly leverage a dominant position in books, video, music, or even communications. Wanting a 30% share of other companies' revenues would make those companies less competitive next to Apple's similar services, and most likely drive up prices for consumers. That is the core of anti-competitive behavior.

 

[Liquorpuki]

1) As you yourself quoted, the Sherman Anti-Trust Act address monopolistic behavior, not monopolies. One can monopolize a market without having 100% of the market. Windows and Internet Explorer 12 years ago is a perfect example. Microsoft never achieved 100% of the market in either category, and yet it was able to use its power in one market (operating systems) to unfairly influence the market in another sector (internet browsers). The entire issue boiled down to a non-competitive factor controlling the market. Microsoft wasn't advancing itself because of better price, better product, etc, but rather through "better muscle" which is not a legal way to compete.

What happened was Microsoft had a monopoly in the OS market and used it to leverage an unfair advantage in the browser market.

The key word is monopoly. It needs to be there in order to define anti-competitive behavior. Whether it's 50% or whatever %, you can't differentiate between anti-competitive behavior and competitive behavior without having a monopoly there.

Also it's kind of funny but I don't know why you're pointing out that a monopoly doesn't have to be 100%. If it were 100%, there'd be zero competition and you guys wouldn't be discussing anti-competitive behavior.

In Apple's situation, the circumstances can become anti-competitive if competitors to the iBookstore (or even iTunes TV and movies selection) are forced to accept uncompetitive terms just to play ball. Apple may not have a majority in very many markets (absent tablet computing), but it does represent a very large chunk of revenues and end user outlets. Companies like Amazon's Kindle Store, Netflix, Pandora, Skype, etc, would be hard pressed to exist in the market if they were excluded from such a large share of the market. That's the key. Apple can use its position as an end-user delivery company to unfairly leverage a dominant position in books, video, music, or even communications. Wanting a 30% share of other companies' revenues would make those companies less competitive next to Apple's similar services, and most likely drive up prices for consumers. That is the core of anti-competitive behavior.

So what market exactly are you accusing Apple of exhibiting monopolistic behavior in? If it's the E-book market, Amazon is the market leader so Apple does not have a monopoly. If it's the E-book Reader market, Amazon is also the market leader (bolstered by the fact that unlike iBooks, it's cross-platform) so Apple also doesn't have a monopoly. If it's the tablet market, you're going to run into the market definition and fledgling market problems BC2009 mentioned.

 

[BC2009]

Yes, but that's not what the law is concerned with.

I'm not going to bother quoting your entire post because I honestly don't have the time to go point by point. I'll be succinct and address only the pertinent issues:

You may be succinct, but you are still wrong. I will opt to be thorough in favor of succinct because I wish to address all your points rather than selectively exclude any quotes from your response that you or other readers may feel strongly contradict my position.

1) As you yourself quoted, the Sherman Anti-Trust Act address monopolistic behavior, not monopolies. One can monopolize a market without having 100% of the market. Windows and Internet Explorer 12 years ago is a perfect example. Microsoft never achieved 100% of the market in either category, and yet it was able to use its power in one market (operating systems) to unfairly influence the market in another sector (internet browsers). The entire issue boiled down to a non-competitive factor controlling the market. Microsoft wasn't advancing itself because of better price, better product, etc, but rather through "better muscle" which is not a legal way to compete.

You are offering an opinion of anti-competitive US law and at the same time making a statement that a "monopoly" is defined as "100% of the market". I think you may need a few more lessons in economics and law. Your "perfect" example does nothing to support your claim. A monopoly simply requires that you own enough of a market segment to create a barrier that prevents competitors from entering the market. Apple clearly has not achieved this and one can cite Android as the clear counter-example. Not to mention HP and Microsoft are throwing quite a bit of money at entry too and are likely to see some success.

Has Apple created any sort of barrier for Amazon to thrive in the e-Reader market? Amazon still sells Kindle devices and they still sell books through their online Kindle store and directly on the Kindle. This is the same as it was before the App Store even existed. Apple has provided an additional way to purchase content through apps sold within their store (Amazon has yet to provide a way for competitors to sell books to Kindle users). The only thing Apple has done is to say that you cannot setup shop with a free offering in their store to direct people to your own store. This would be like Orange Julius setting up a free sample stand inside McDonald's and telling folks to go next door to purchase a full-size smoothie and then Orange Julius saying that it was wrong of McDonald's to want to charge rent or kick them out.

In Apple's situation, the circumstances can become anti-competitive if competitors to the iBookstore (or even iTunes TV and movies selection) are forced to accept uncompetitive terms just to play ball. Apple may not have a majority in very many markets (absent tablet computing), but it does represent a very large chunk of revenues and end user outlets. Companies like Amazon's Kindle Store, Netflix, Pandora, Skype, etc, would be hard pressed to exist in the market if they were excluded from such a large share of the market. That's the key. Apple can use its position as an end-user delivery company to unfairly leverage a dominant position in books, video, music, or even communications. Wanting a 30% share of other companies' revenues would make those companies less competitive next to Apple's similar services, and most likely drive up prices for consumers. That is the core of anti-competitive behavior.

Once again, your arguments don't hold water. All the services you mentioned existed and thrived before Apple's iTunes/iBooks/App Stores. In fact, Amazon is still the market leader and their Kindle devices do NOT allow anybody else to sell content to Kindle users. Apple is allowing competitors to come in, but is requiring a cut for providing the service and providing access to their store's customers. The core of capitalist economies is that it is self-correcting. If Apple's stores were the only way to purchase electronic content for say 60% or more of the market (i.e..: if there was no Android, no Windows Phone 7, no Kindle Bookstore, and no world wide web), then your arguments would hold water. But in a capitalistic system, any economist would look at the situation and say that if Apple was asking for unfair terms, then one or more of the following corrections should occur:

1) Content providers would withhold their content from Apple and simply sell it themselves through web-based sales or their own platforms.

2) Apple would reduce its 30% tax to what the market deemed was "fair" and profitable.

3) A third-party platform would offer better terms than Apple, and attract the majority of the content providers

4) Apple's user base would decrease because the iOS platform with less content would be less compelling

5) Apple's user base would decrease because another platform would become more compelling than iOS due to the availability of content on that platform.

If you quote nothing else from my response in your next response, I ask only that you not exclude the next two paragraphs....

What Apple is doing is absolutely no different than what video game system manufacturers have done for years. In fact, Apple's terms are for more reasonable than Microsoft's, Nintendo's or Sony's. If you wanted to sell a game for the Wii or XBox or Playstation, you had to get your game approved by the manufacturer and give a large cut of every game sold to the game system manufacturer. This was the part of the cost of using the API to write the game and delivering it on the game manufacturer's platform (incidentally the annual developer fees for access to the API were very high too). The reason that none of the game console manufacturers ever got brought under anti-competitive investigation is because no one of them ever monopolized the market. At any given time one of them may surge in market leadership, but with the release of each new console, the potential for leap-frog has been huge. But each of them did command a large segment of the market.

Can you imagine Electronic Arts deciding that after Sony's PSN security debacle, that they preferred XBox Live to PSN for selling additional game content, and then deciding to release a game for Playstation that connected to the XBox Live Network for all online content delivery and multi-player gaming? Do you think Sony would allow it? Should Sony allow it? Would Sony's denial constitute anti-competitive practices? The answer to all three of those questions is "No".

 

[diamond.g]

Can you imagine Electronic Arts deciding that after Sony's PSN security debacle, that they preferred XBox Live to PSN for selling additional game content, and then deciding to release a game for Playstation that connected to the XBox Live Network for all online content delivery and multi-player gaming? Do you think Sony would allow it? Should Sony allow it? Would Sony's denial constitute anti-competitive practices? The answer to all three of those questions is "No".

Hehe Microsoft wouldn't allow it. As it is Sony has allowed access to outside networks (Steam comes to mind). Not sure if using PSN is a requirement though (as a rule).

 

[Oletros]

1) Content providers would withhold their content from Apple and simply sell it themselves through web-based sales or their own platforms.

AS they are doing now with in app purchases?

 

[MagnusVonMagnum]

What happened was Microsoft had a monopoly in the OS market and used it to leverage an unfair advantage in the browser market.

The key word is monopoly. It needs to be there in order to define anti-competitive behavior. Whether it's 50% or whatever %, you can't differentiate between anti-competitive behavior and competitive behavior without having a monopoly there.

Sorry, but that's just not true. A "monopoly" is NOT a requirement in the Clayton Anti-Trust Act. All that is needed is 'significant' market impact on a given market (the word 'significant' being unambiguous so judges can decide where the line is) for blatant anti-competitive practices to violate the anti-trust act (that includes 'tying' pratices like trying to force you to buy one product in order to buy another or vice-versa). Unfortunately, our justice and legal system is pretty corrupt these days along party and (and thus corporate bribery) lines, so the existing laws are not properly enforced.

 

[Liquorpuki]

Sorry, but that's just not true. A "monopoly" is NOT a requirement in the Clayton Anti-Trust Act. All that is needed is 'significant' market impact on a given market (the word 'significant' being unambiguous so judges can decide where the line is) for blatant anti-competitive practices to violate the anti-trust act (that includes 'tying' pratices like trying to force you to buy one product in order to buy another or vice-versa). Unfortunately, our justice and legal system is pretty corrupt these days along party and (and thus corporate bribery) lines, so the existing laws are not properly enforced.

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.

 

[BaldiMac]

Sorry, but that's just not true. A "monopoly" is NOT a requirement in the Clayton Anti-Trust Act. All that is needed is 'significant' market impact on a given market (the word 'significant' being unambiguous so judges can decide where the line is) for blatant anti-competitive practices to violate the anti-trust act (that includes 'tying' pratices like trying to force you to buy one product in order to buy another or vice-versa). Unfortunately, our justice and legal system is pretty corrupt these days along party and (and thus corporate bribery) lines, so the existing laws are not properly enforced.

It seems like we've had this discussion a few too many times, and you still try and argue what you think the law should be instead of what it actually is.

http://www.ftc.gov/bc/antitrust/monopolization_defined.shtm

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.

Tying is not illegal unless you are a monopoly (as defined above). Tying is a normal, routine business practice utilized in millions of transactions every year.
http://www.ftc.gov/bc/antitrust/tying_sale.shtm

It's tiring that you continue to justify the differences between your opinion and legal reality with claims of corruption every time you enter an antitrust discussion.

 

[KingCrimson]

If Apple is guilty for wanting a 30% cut, then Amazon is guilty of excluding competing bookstores from selling on Kindle. Since neither has a monopoly, by your rules, both would be equally guilty. The key element here is that you must prove that a monopoly exists. Since Kindle readers exist for handhelds, tablets, and eReaders the most-likely "market" definition would include all of the above, and proving an Apple monopoly in that scenario would be impossible with 500k Android activations per day.

Millions of anti-Apple fanbois just got busted in the chops.

 

[MagnusVonMagnum]

It seems like we've had this discussion a few too many times, and you still try and argue what you think the law should be instead of what it actually is.

No, it's more like you can't read the law. You like to point to sites like the FTC (whose job is supposed to be to enforce the law, not re-write it) rather than the law itself, which is self-explanatory and anyone can read it and see what it says.

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.

Try reading the flipping law instead of the FTC site for once. What the corrupt FTC says and what the LAW says aren't necessarily the same thing. The Clayton Act requires no such things (see below).

Also, it doesn't take a genius to see corruption when the government backs down from its own cases against companies like Microsoft even AFTER they won that money talks and BS walks. Yet you don't see or believe in such corruption.

Tying is not illegal unless you are a monopoly

Why don't you read the actual law instead of spouting BS NONSENSE?

It's tiring that you continue to justify the differences between your opinion and legal reality with claims of corruption every time you enter an antitrust discussion.

It's tiring to watch you spout bullcrap every time you post. Anyone that can read English can see what I'm saying is the absolute truth. The Clayton Anti-Trust Act is not written in modern gibberish law. It's a very easy read.

Here's the relevant section Act3 on tying (nothing added and nothing removed):

That it shall be unlawful for any person engaged in commerce,
in the course of such commerce, to lease or make a sale or contract for sale of
goods, wares, merchandise, machinery, supplies, or other commodities,
whether patented or unpatented, for use, consumption, or resale within the
United States or any territory thereof or the District of Columbia or any
insular possession or other place under the jurisdiction of the United States, or
fix a price charged therefor, or discount from, or rebate upon, such price, on
the condition, agreement, or understanding that the lessee or purchaser thereof
shall not use or deal in the goods, wares, merchandise, machinery, supplies, or
other commodities of a competitor or competitors of the lessor or seller, where
the effect of such lease, sale, or contract for sale or such condition, agreement,
or understanding may be to substantially lessen competition or tend to create a
monopoly in any line of commerce.

Notice it says "any person" (it doesn't even have to be a corporation for god's sake!) Notice how it says that such a person or business may not create a lease, sale or contract (such as Apple's license for OSX) agreement such that it may substantially lessen competition OR tend to create a monopoly IN ANY line of commerce. Notice the word OR there.

I'm not interested in the FTC's failure to enforce the damn law as evidence that the law is somehow not what it says it is, your attempts at deception and flagrant outright lies, notwithstanding. "Substantially lessen competition" does not require "monopoly" power in any sense of the word. But you keep skipping over that part of the law to the part AFTER the "OR" because you know proves you dead wrong. The only thing that is not perfectly clear in that law is how much effect is "substantial". Clearly it is NOT a monopoly or the word "OR" would not be used there. It is up to a judge to decide how much anti-competition is a "substantial" effect. "Any line of commerce" means the effect doesn't have to be one in which the person or company has a substantial influence. The company can use its substantial influence in one area of commerce to affect competition in another area (and thus work towards gaining an unfair advantage in that area as a result). That is the whole point of the TYING clause, to prevent companies with substantial influence on a given market from abusing that power in order to create an unfair advantage in another market segment.

The very idea that Apple does not have the ability to substantially lessen competition in any number of areas at this stage is downright laughable as are your absurd posts that you insist on bringing up every time someone points out the truth on the matter. You like to pretend that English isn't English and that words don't mean what they say and that the legal definition of red is actually blue and that good = bad and corruption = clean representation of the people instead of the evil corporations. Yes, you have your definitions straight as a bent arrow, as usual. You'd fit right in there in Washington.

 

[Liquorpuki]

Notice it says "any person" (it doesn't even have to be a corporation for god's sake!) Notice how it says that such a person or business may not create a lease, sale or contract (such as Apple's license for OSX) agreement such that it may substantially lessen competition OR tend to create a monopoly IN ANY line of commerce. Notice the word OR there.

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?

 

[BaldiMac]

No, it's more like you can't read the law. You like to point to sites like the FTC (whose job is supposed to be to enforce the law, not re-write it) rather than the law itself, which is self-explanatory and anyone can read it and see what it says.



Try reading the flipping law instead of the FTC site for once. What the corrupt FTC says and what the LAW says aren't necessarily the same thing. The Clayton Act requires no such things (see below).

Also, it doesn't take a genius to see corruption when the government backs down from its own cases against companies like Microsoft even AFTER they won that money talks and BS walks. Yet you don't see or believe in such corruption.



Why don't you read the actual law instead of spouting BS NONSENSE?



It's tiring to watch you spout bullcrap every time you post. Anyone that can read English can see what I'm saying is the absolute truth. The Clayton Anti-Trust Act is not written in modern gibberish law. It's a very easy read.

Here's the relevant section Act3 on tying (nothing added and nothing removed):



Notice it says "any person" (it doesn't even have to be a corporation for god's sake!) Notice how it says that such a person or business may not create a lease, sale or contract (such as Apple's license for OSX) agreement such that it may substantially lessen competition OR tend to create a monopoly IN ANY line of commerce. Notice the word OR there.

I'm not interested in the FTC's failure to enforce the damn law as evidence that the law is somehow not what it says it is, your attempts at deception and flagrant outright lies, notwithstanding. "Substantially lessen competition" does not require "monopoly" power in any sense of the word. But you keep skipping over that part of the law to the part AFTER the "OR" because you know proves you dead wrong. The only thing that is not perfectly clear in that law is how much effect is "substantial". Clearly it is NOT a monopoly or the word "OR" would not be used there. It is up to a judge to decide how much anti-competition is a "substantial" effect. "Any line of commerce" means the effect doesn't have to be one in which the person or company has a substantial influence. The company can use its substantial influence in one area of commerce to affect competition in another area (and thus work towards gaining an unfair advantage in that area as a result). That is the whole point of the TYING clause, to prevent companies with substantial influence on a given market from abusing that power in order to create an unfair advantage in another market segment.

The very idea that Apple does not have the ability to substantially lessen competition in any number of areas at this stage is downright laughable as are your absurd posts that you insist on bringing up every time someone points out the truth on the matter. You like to pretend that English isn't English and that words don't mean what they say and that the legal definition of red is actually blue and that good = bad and corruption = clean representation of the people instead of the evil corporations. Yes, you have your definitions straight as a bent arrow, as usual. You'd fit right in there in Washington.

The fact that you refuse to acknowledge is that common law (or case law or precedent) plays an important role in the judicial system. Terms like "significant" market power and "substantially lessen competition" may be ambiguous in the actual letter of the law, but years of judicial opinion backed by layers of checks and balances have established actual benchmarks that describe when these terms apply. They don't just mean whatever you think they mean.

Those terms simply don't apply unless a company has a monopoly position in the market (as previously defined). The US economy is based on the idea that a market will correct itself in the absence of a monopoly. And if you take an objective view of the market, it's pretty clear that it has. Android is the market leader, which is exactly what you would expect from Apple's higher average pricing and limitations. Regulation isn't the answer to all problems.

 

[BC2009]

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!

....
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.
....

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.

---

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.

 

[MagnusVonMagnum]

The fact that you refuse to acknowledge is that common law (or case law or precedent) plays an important role in the judicial system.

Oh, I acknowledged it when I said the system is corrupt with politics that have evolved over the years in favor of big business and away from the more moderate views of the early 20th Century (when many of these anti-trust laws were passed). The fact the Supreme Court rules that corporations can spend unlimited campaign funding along partisan lines is proof enough to me that the Judicial Branch (which isn't supposed to be partisan) is completely screwed up today just like every other branch of government. The Constitution also says the government is supposed to be by and for the people, but only a fool would believe that is actually the case in practice.

What I say about the anti-trust law in question is what it says. The fact it's not properly enforced and has been watered down to mean nothing in the political realm these days doesn't change its original intent, which has clearly been purposely lost over the years.

Terms like "significant" market power and "substantially lessen competition" may be ambiguous in the actual letter of the law, but years of judicial opinion backed by layers of checks and balances have established actual benchmarks that describe when these terms apply. They don't just mean whatever you think they mean.

Oh, they DO mean what they say, but judges have taken it upon themselves in the past couple of decades to dictate laws (through convenient far reaching "interpretation") rather than enforce them as they were written, often because they don't have the votes to change the law the proper way. Modern laws like the DMCA are purposely vague. I'm sure it's really fun to be the person who has to test the law under suit rather than simply writing laws concise and to the point.

Regulation isn't the answer to all problems.

But software patent and trademark suing and endless lawsuits that drive smaller businesses out of business in legal costs is the answer?

The whole reason for anti-trust law in the first place is so the big boys cannot use their big player status to stomp all over the smaller businesses, but that is exactly what happens in practice these days one way or another, whether by lawsuits designed to drive them out of business, buy-outs, mergers or just using unprecedented market power to drive other companies out of business with prices that they cannot compete with (e.g. Wal-Mart's take-over of America and the loss of smaller stores along the way that hurts nearly everyone from the suppliers to end-sellers and often brings unsafe products to the consumer like lead from China, etc.)

There's been a loss of morality and even patriotism over the years all in the name of greed and more profits. I'm sure some see this simply as "business" or "opportunity", but I feel we've definitely lost something along the way.

 

[BaldiMac]

Oh, I acknowledged it when I said the system is corrupt with politics that have evolved over the years in favor of big business and away from the more moderate views of the early 20th Century (when many of these anti-trust laws were passed). The fact the Supreme Court rules that corporations can spend unlimited campaign funding along partisan lines is proof enough to me that the Judicial Branch (which isn't supposed to be partisan) is completely screwed up today just like every other branch of government. The Constitution also says the government is supposed to be by and for the people, but only a fool would believe that is actually the case in practice.

What I say about the anti-trust law in question is what it says. The fact it's not properly enforced and has been watered down to mean nothing in the political realm these days doesn't change its original intent, which has clearly been purposely lost over the years.

Yes. Anytime legal reality is shown to disagree with your interpretation of the law it's because of corruption. Incredibly convenient.

Can you give any examples from the "early 20th Century (when many of these anti-trust laws were passed)" of a successful prosecution of a single firm under antitrust laws where the firm had a market share under 50% or was not considered a monopoly?

 

[MagnusVonMagnum]

Yes. Anytime legal reality is shown to disagree with your interpretation of the law it's because of corruption. Incredibly convenient.

No, I'm saying corrupt of government is a simple fact of life. If you don't believe, you either don't watch the news or are unbelievably naive. Or do you really think our government represents the overall population of this country? Every time they ignore the polls they prove otherwise. Every time they do what's best for the top 2% and screw over the other 98%, they prove otherwise. Every time the court system rules along partisan lines they prove they're corrupt. Believe what you will. It doesn't change reality.

Can you give any examples from the "early 20th Century (when many of these anti-trust laws were passed)" of a successful prosecution of a single firm under antitrust laws where the firm had a market share under 50% or was not considered a monopoly?

I've got better things to do with my time than research court cases from the early 20th century just to suit your fancy dude. You can read English. The law says what it says. Judges "interpret" different things all the time. It's why case after freaking case flip-flops through the appeal process only to get a 5/4 or 4/5 ruling at the Supreme Court level. Do you think 5/4 type rulings are foolproof law? Are 4 of those Supreme Court justices just morons or what? Your view of law in general just seems so naive. You think everything is black and white and anti-trust law is only for monopolies, but monopolies aren't really monopolies either. It's just a convenient term for too much abuse of market power. Yet monopolies are legal when they are derived from consumer choice. The problem is when companies abuse their power to thwart competition. Your whole disagreement is over WHERE that line starts. The law I quoted merely says "substantial" and substantial can mean anything a judge decides it to mean. Courts tend to go with prior precedents, but that isn't always so either. Decisions can be overturned and the Supreme Court seems to do whatever the frack it feels like these days. Juries can do anything they feel like to, like let child murderers go free for reasons only they can fathom. You call it the law. I call it a joke.