6 ms·

As I understand antitrust law, it is legal for a monopoly in one market to expand into an adjacent market. However, if that monopoly stifles competition in the

As I understand antitrust law, it is legal for a monopoly in one market to expand into an adjacent market. However, if that monopoly stifles competition in the adjacent market in a way that harms consumers, that monopolist’s acts are illegal. By virtue of Apple integrating the operating system with hardware, iOS has a defacto 100% monopoly on devices compatible with Apple's Ax series chips (e.g. A9 in iPhone 6s). There's nothing illegal about that. The market for Ax series devices is now larger than the Intel-compatible PC market was at under consideration during the Microsoft antitrust case. The question then is whether Apple's policies stifle innovation and harm consumers. I think the answer is "yes".

mikeash 10y ago
I don't think the law defines monopolies so narrowly that it's useful or interesting to narrow it down to "devices compatible with Apple's Ax series chips." Back in the MS monopoly days, there were a ton of things people wanted to do where they had no choice but to buy Windows if they wanted to do them. Today, there is very little that people do which requires an iOS device. Apple has many closed features (the App Store, iMessage, iCloud) but open equivalents are available. Almost nobody is buying an iPhone because they need an iPhone in particular to do something. They're buying iPhones because they need a smartphone, and they prefer an iPhone. I am very much not a fan of Apple's approach here, I just don't see anything illegal about it.
- ryanpollock 10y ago
  I'm pretty sure Apple doesn't need a monopoly on the entire smartphone market to have monopoly power... Apple already got in trouble for price fixing - a violation of the Sherman antitrust act. https://en.wikipedia.org/wiki/United_States_v._Apple_Inc https://en.wikipedia.org/wiki/United_States_v._Apple_Inc. Related to iOS and competition within it, see http://fortune.com/2016/06/30/elizabeth-warren-apple-google/ http://fortune.com/2016/06/30/elizabeth-warren-apple-google/ http://www.thehill.com/opinion/op-ed/272399-time-to-prosecute-apple-for-monopolization http://www.thehill.com/opinion/op-ed/272399-time-to-prosecut... Hopefully more to come from me on this topic...my channel here. https://medium.com/@ryanpollock https://medium.com/@ryanpollock
  - 2muchcoffeeman 10y ago
    Apple was in trouble for collusion. In this instance Apple and the other publishers probably did so specifically because they didn't have a monopoly on ebooks.
guygurari 10y ago
> iOS has a defacto 100% monopoly on devices compatible with Apple's Ax series chips Sure, and equivalently Apple has a 100% monopoly on Apple devices. How does that make sense? One problem with anti-trust laws is that the market is not well-defined. Is the relevant market Apple phones? Smartphones above some price point? Smartphones at a price point? All smartphones? We can always pick and choose to make it seem like a company has a monopoly.
- ryanpollock 10y ago
  I think markets can be defined in a bunch of ways. I think the litmus test is whether a market is large - and whether people are adversely affected. Hopefully more to come here https://medium.com/@ryanpollock/ https://medium.com/@ryanpollock/

mikeash 10y ago

I don't think the law defines monopolies so narrowly that it's useful or interesting to narrow it down to "devices compatible with Apple's Ax series chips." Back in the MS monopoly days, there were a ton of things people wanted to do where they had no choice but to buy Windows if they wanted to do them. Today, there is very little that people do which requires an iOS device. Apple has many closed features (the App Store, iMessage, iCloud) but open equivalents are available. Almost nobody is buying an iPhone because they need an iPhone in particular to do something. They're buying iPhones because they need a smartphone, and they prefer an iPhone. I am very much not a fan of Apple's approach here, I just don't see anything illegal about it.

ryanpollock 10y ago
I'm pretty sure Apple doesn't need a monopoly on the entire smartphone market to have monopoly power... Apple already got in trouble for price fixing - a violation of the Sherman antitrust act. https://en.wikipedia.org/wiki/United_States_v._Apple_Inc https://en.wikipedia.org/wiki/United_States_v._Apple_Inc. Related to iOS and competition within it, see http://fortune.com/2016/06/30/elizabeth-warren-apple-google/ http://fortune.com/2016/06/30/elizabeth-warren-apple-google/ http://www.thehill.com/opinion/op-ed/272399-time-to-prosecute-apple-for-monopolization http://www.thehill.com/opinion/op-ed/272399-time-to-prosecut... Hopefully more to come from me on this topic...my channel here. https://medium.com/@ryanpollock https://medium.com/@ryanpollock
- 2muchcoffeeman 10y ago
  Apple was in trouble for collusion. In this instance Apple and the other publishers probably did so specifically because they didn't have a monopoly on ebooks.

guygurari 10y ago

> iOS has a defacto 100% monopoly on devices compatible with Apple's Ax series chips Sure, and equivalently Apple has a 100% monopoly on Apple devices. How does that make sense? One problem with anti-trust laws is that the market is not well-defined. Is the relevant market Apple phones? Smartphones above some price point? Smartphones at a price point? All smartphones? We can always pick and choose to make it seem like a company has a monopoly.

ryanpollock 10y ago
I think markets can be defined in a bunch of ways. I think the litmus test is whether a market is large - and whether people are adversely affected. Hopefully more to come here https://medium.com/@ryanpollock/ https://medium.com/@ryanpollock/