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Whatever the true cost is, the argument is spurious: Apple is not forced to provide this service at cost (or with a “reasonable” markup), they can charge in any

Whatever the true cost is, the argument is spurious: Apple is not forced to provide this service at cost (or with a “reasonable” markup), they can charge in any case what they want. Telegram should rather make a convincing argument why Apple should be considered a monopolist, which is not clear to me given the overall <30% market share of Apple in the phone market.

skrowl 6y ago
100% of apps installed on iOS are through the iOS lockdown walled garden app store. This is monopoly bundling by definition. It' doesn't matter than they're only ~11% marketshare of smartphones sold.
- threeseed 6y ago
  And how do you reconcile online stores for software businesses e.g. Atlassian, Github, Shopify ? I can't install addons without going through their "app store".
  - thewebcount 6y ago
    Forget about app stores. You probably can't get your branded products into Trader Joe's, but nobody's calling them a monopoly.
    - molmalo 6y ago
      To be fair, Trader Joe's or any other store does not require me to go through them, without any other alternative, every time I want to modify or use in new ways my stuff after I bought it.
- chipotle_coyote 6y ago
  > This is monopoly bundling by definition. We've been having this debate for the better part of the last decade because whether this constitutes a monopoly really isn't clear as either side insists that it is. There's not much precedent for this specific kind of maybe-monopoly out there, and it's unclear to me whether the semi-precedents I can think of really support the notion that the App Store is a monopoly. Also, as people have pointed out elsewhere, a monopoly is not in and of itself illegal. European antitrust law focuses on anti-competitive behavior, but American antitrust law focuses on perceived consumer harm. Look at antitrust suits against Apple's iBooks from years ago -- Apple's collusion with publishers was to break Amazon's de facto monopoly on ebooks. Giving pricing control back to publishers would have increased competition, but it would have raised prices for consumers, and that was what the courts cared about. And this is actually a big thorn in the side of American antitrust action against Apple's app store. We can shout "walled garden" all we want (although I am getting super tired of that phrase, so let's not), but you need to find cases where this harmed consumers, not developers. Developers can line up around the block saying that Apple's policies are destroying their business, but unless America changes our standard of antitrust to be more like Europe's, that simply doesn't matter. Those cases are arguably out there -- I keep coming back to Apple's store policies that force Amazon to release a Kindle app that not only won't let you purchase books but can't even tell you a URL to go to -- but on the whole, this is a relatively high bar.
- nodamage 6y ago
  100% of lemonade sold on my front lawn is sold through my lemonade stand. Is that a monopoly too? Of course not, because it's not representative of the overall market and the alternative choices the consumer has. > It' doesn't matter than they're only ~11% marketshare of smartphones sold. It very much does, because it means the consumer can choose to buy an alternative smartphone that is better suited to them. Moreover, for the purposes of antitrust action, both the US and Europe have thresholds for the consideration of monopoly power that are well above 11%: US: Courts look at the firm's market share, but typically do not find monopoly power if the firm (or a group of firms acting in concert) has less than 50 percent of the sales of a particular product or service within a certain geographic area. [1] Europe: The Commission considers that low market shares are generally a good proxy for the absence of substantial market power. The Commission's experience suggests that dominance is not likely if the undertaking's market share is below 40 % in the relevant market. [2] [1] https://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/single-firm-conduct/monopolization-defined https://www.ftc.gov/tips-advice/competition-guidance/guide-a... [2] https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX%3A52009XC0224%2801%29 https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX%3A...
athms 6y ago
Being a monopoly is NOT illegal. It seems many people think once a company has a monopoly, they need to be broken into separate pieces. This is fiction. A monopoly would only be illegal if a business uses its monopoly power to stifle competition.
- barrkel 6y ago
  This is not the legal principal in the EU, where the case is raised. Mere exclusive purchase would be a problem if Apple is defined as a monopoly, and you are forced to use Apple as your vendor to release on iOS.
  - Discombulator 6y ago
    My last course in competition law was a while ago, but I remember this: while there are many differences in detail between the US and the EU approach, the broad strokes are the same. Also in the EU, having a monopoly is not illegal (as long as it was obtained fairly) - abuse of monopoly power is. Surely being a monopolist means you are subject to additional rules, no doubt about that.
bilbo0s 6y ago
I could be wrong, but I think Telegram's lawyers are advancing on the grounds of anti-trust, not necessarily anti-monopoly. Which, as you correctly point out, would require convincing a court that a company with a minority market share is a monopoly. (Apple doesn't even have a threatening minority. They have maybe 25% if that.) In any case, I think they can make a convincing argument that Apple is operating as an illegal trust. (If you alter the historical definition of "Trust" a bit.) I think that's more what they are going for here. Whether the court will buy it? We'll see? I certainly would not plan on a win if I were Telegram, but it's worth a shot.
barrkel 6y ago
You don't get to charge what you want when your platform approaches monopoly in a market. The trick is defining the market. Apple already has 90+% market share in many less broadly defined markets - e.g. for young consumers, or in higher priced apps - and what happens depends on who successfully segments the market in the eyes of regulators.
- nodamage 6y ago
  You don't get to arbitrarily redefine the market until you hit your desired threshold either. The courts will typically consider whether the consumer has reasonable access to alternatives to your product. Which in the case of Apple, there definitely are.
  - Dahoon 6y ago
    > whether the consumer has reasonable access to alternatives No, because in this case the alternative is not another phone but another app store.
    - nodamage 6y ago
      The apps available are part of the purchasing decision of which phone to buy, just like which games are available are part of the purchasing decision of which console to buy. You don't get to buy an Xbox and then demand to be able to play Mario Kart on it.
      - snowron6 6y ago
        This isn't a valid analogy. A more appropriate one would be if Nintendo wanted to release Mario kart on the Xbox but Microsoft refused to allow them unless Nintendo gave them 30% of the revenue from it.
        nodamage 6y ago
        You realize that's actually the case, right? If Nintendo wanted to publish Mario Kart on the Xbox they would have to sign a publisher agreement with Microsoft and pay a royalty for every copy of Mario Kart sold on the Xbox.

skrowl 6y ago

100% of apps installed on iOS are through the iOS lockdown walled garden app store. This is monopoly bundling by definition. It' doesn't matter than they're only ~11% marketshare of smartphones sold.

threeseed 6y ago
And how do you reconcile online stores for software businesses e.g. Atlassian, Github, Shopify ? I can't install addons without going through their "app store".
- thewebcount 6y ago
  Forget about app stores. You probably can't get your branded products into Trader Joe's, but nobody's calling them a monopoly.
  - molmalo 6y ago
    To be fair, Trader Joe's or any other store does not require me to go through them, without any other alternative, every time I want to modify or use in new ways my stuff after I bought it.
chipotle_coyote 6y ago
> This is monopoly bundling by definition. We've been having this debate for the better part of the last decade because whether this constitutes a monopoly really isn't clear as either side insists that it is. There's not much precedent for this specific kind of maybe-monopoly out there, and it's unclear to me whether the semi-precedents I can think of really support the notion that the App Store is a monopoly. Also, as people have pointed out elsewhere, a monopoly is not in and of itself illegal. European antitrust law focuses on anti-competitive behavior, but American antitrust law focuses on perceived consumer harm. Look at antitrust suits against Apple's iBooks from years ago -- Apple's collusion with publishers was to break Amazon's de facto monopoly on ebooks. Giving pricing control back to publishers would have increased competition, but it would have raised prices for consumers, and that was what the courts cared about. And this is actually a big thorn in the side of American antitrust action against Apple's app store. We can shout "walled garden" all we want (although I am getting super tired of that phrase, so let's not), but you need to find cases where this harmed consumers, not developers. Developers can line up around the block saying that Apple's policies are destroying their business, but unless America changes our standard of antitrust to be more like Europe's, that simply doesn't matter. Those cases are arguably out there -- I keep coming back to Apple's store policies that force Amazon to release a Kindle app that not only won't let you purchase books but can't even tell you a URL to go to -- but on the whole, this is a relatively high bar.
nodamage 6y ago
100% of lemonade sold on my front lawn is sold through my lemonade stand. Is that a monopoly too? Of course not, because it's not representative of the overall market and the alternative choices the consumer has. > It' doesn't matter than they're only ~11% marketshare of smartphones sold. It very much does, because it means the consumer can choose to buy an alternative smartphone that is better suited to them. Moreover, for the purposes of antitrust action, both the US and Europe have thresholds for the consideration of monopoly power that are well above 11%: US: Courts look at the firm's market share, but typically do not find monopoly power if the firm (or a group of firms acting in concert) has less than 50 percent of the sales of a particular product or service within a certain geographic area. [1] Europe: The Commission considers that low market shares are generally a good proxy for the absence of substantial market power. The Commission's experience suggests that dominance is not likely if the undertaking's market share is below 40 % in the relevant market. [2] [1] https://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/single-firm-conduct/monopolization-defined https://www.ftc.gov/tips-advice/competition-guidance/guide-a... [2] https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX%3A52009XC0224%2801%29 https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX%3A...

athms 6y ago

Being a monopoly is NOT illegal. It seems many people think once a company has a monopoly, they need to be broken into separate pieces. This is fiction. A monopoly would only be illegal if a business uses its monopoly power to stifle competition.

barrkel 6y ago
This is not the legal principal in the EU, where the case is raised. Mere exclusive purchase would be a problem if Apple is defined as a monopoly, and you are forced to use Apple as your vendor to release on iOS.
- Discombulator 6y ago
  My last course in competition law was a while ago, but I remember this: while there are many differences in detail between the US and the EU approach, the broad strokes are the same. Also in the EU, having a monopoly is not illegal (as long as it was obtained fairly) - abuse of monopoly power is. Surely being a monopolist means you are subject to additional rules, no doubt about that.

bilbo0s 6y ago

I could be wrong, but I think Telegram's lawyers are advancing on the grounds of anti-trust, not necessarily anti-monopoly. Which, as you correctly point out, would require convincing a court that a company with a minority market share is a monopoly. (Apple doesn't even have a threatening minority. They have maybe 25% if that.) In any case, I think they can make a convincing argument that Apple is operating as an illegal trust. (If you alter the historical definition of "Trust" a bit.) I think that's more what they are going for here. Whether the court will buy it? We'll see? I certainly would not plan on a win if I were Telegram, but it's worth a shot.

barrkel 6y ago

You don't get to charge what you want when your platform approaches monopoly in a market. The trick is defining the market. Apple already has 90+% market share in many less broadly defined markets - e.g. for young consumers, or in higher priced apps - and what happens depends on who successfully segments the market in the eyes of regulators.

nodamage 6y ago
You don't get to arbitrarily redefine the market until you hit your desired threshold either. The courts will typically consider whether the consumer has reasonable access to alternatives to your product. Which in the case of Apple, there definitely are.
- Dahoon 6y ago
  > whether the consumer has reasonable access to alternatives No, because in this case the alternative is not another phone but another app store.
  - nodamage 6y ago
    The apps available are part of the purchasing decision of which phone to buy, just like which games are available are part of the purchasing decision of which console to buy. You don't get to buy an Xbox and then demand to be able to play Mario Kart on it.
    - snowron6 6y ago
      This isn't a valid analogy. A more appropriate one would be if Nintendo wanted to release Mario kart on the Xbox but Microsoft refused to allow them unless Nintendo gave them 30% of the revenue from it.
      - nodamage 6y ago
        You realize that's actually the case, right? If Nintendo wanted to publish Mario Kart on the Xbox they would have to sign a publisher agreement with Microsoft and pay a royalty for every copy of Mario Kart sold on the Xbox.