> Now we want to talk about apps and phones. If you have a "phone" -- the broad product definition you want to use -- then do you have competition for app stores?
Apple's argument, which I tend to agree with, is that the user does have a choice of app store, which they make by buying an iPhone instead of an Android phone (or a Xiaomi phone, or a Kindle, or whatever).
The reason I agree with this is that, for me, the App Store and how it's handled is one of the big draws of the iPhone; I've heard a lot fewer stories about malicious software, re-uploaded software with malware installed, software that walks you through the process of enabling sideloading or enabling adb connections so that you can install this one thing one time, all of which users might have to deal with without necessarily understanding the repercussions of what they're doing.
So once you've purchased an iPhone you don't have a choice of App Store, but you do make that choice, arguably, when you purchase your phone. The biggest argument against this is that if you've already invested a lot into apps on the App Store, then there's not a lot of option to switch app stores, but there is still a choice that users can make.
> The strongest argument that this isn't the case is that it's common for people to buy multiple different consoles at once, so if the customer can't get a game on one console, they could still get the same game on another one because they actually own multiple consoles at the same time.
I'm not sure this is actually the case for most people. I don't think the typical person is going to spend, for example, $600 on a Playstation 5, and then decide that they don't like how Sony handles their store so they go and buy an XBox Series X for another $600 so that they can get the best of both worlds, or get access to a different store with different policies.
> Apple's argument, which I tend to agree with, is that the user does have a choice of app store, which they make by buying an iPhone instead of an Android phone (or a Xiaomi phone, or a Kindle, or whatever).
The problem with this is that then you have to make the choice of app store together with the choice of the entire platform including the hardware and operating system and everything. Moreover, once you make the choice, it's hard to change because there are significant transition costs, even if the apps available in the stores change.
Suppose I bought an iPhone two months ago and today I want to install Fortnite. When I bought the iPhone it was available, but how does that help me now?
Or suppose I want an iPhone exclusively so that I'm not giving my data to Google and for no other reason. Then my choice of app store is being constrained by my choice of platforms -- basically the definition of an anti-competitive restraint.
> I'm not sure this is actually the case for most people.
So then you're making the case that they do have a monopoly.
> So then you're making the case that they do have a monopoly.
I'm making the case that the phone situation is the same as the console situation, and that if you condemn one you have to condemn them all.
In fact, the situation reminds me a lot of the Atari v. Nintendo case of the 1980's[1], where Atari sued Nintendo because Nintendo was controlling manufacturing, distribution, and allocation (in other words, Nintendo allocated manufacturing resources between games however it saw fit). Again, the argument here was quality control and consumer satisfaction.
The case was eventually decided in favor of Nintendo, but the lawsuits didn't wrap up until about 1994 or so.
> The problem with this is that then you have to make the choice of app store together with the choice of the entire platform including the hardware and operating system and everything. Moreover, once you make the choice, it's hard to change because there are significant transition costs, even if the apps available in the stores change.
This is no different than buying an Xbox or a Playstation or Switch knowing that you will only have access to certain games on each platform. Yes, once you've bought the Xbox you're limited to Xbox-compatible games and it will cost a lot of money to switch to a Switch. But it doesn't mean you didn't have a choice.
> Or suppose I want an iPhone exclusively so that I'm not giving my data to Google and for no other reason. Then my choice of app store is being constrained by my choice of platforms -- basically the definition of an anti-competitive restraint.
Your choice being constrained by your personal preference is well outside the scope of antitrust law.
> This is no different than buying an Xbox or a Playstation or Switch knowing that you will only have access to certain games on each platform. Yes, once you've bought the Xbox you're limited to Xbox-compatible games and it will cost a lot of money to switch to a Switch.
Except, as previously mentioned, you don't switch to a Switch. If you have an Xbox and then go out and buy a Switch, you still have an Xbox. At which point the stores actually have to compete with one another because you could buy a game for either one.
That isn't what people do with phones. They're not going to carry two phones around all the time, but having only one destroys the competition between stores when a given phone can only use one store.
Also notice that the cost of a game (typically $50) is a lot closer to the cost of a console (<$500) than the cost of an app (typically $1) is to the cost of the average iPhone ($800).
> Your choice being constrained by your personal preference is well outside the scope of antitrust law.
How is this not like saying that a monopoly on gasoline is fine because you're only being constrained by your "personal preference" to drive a car instead of riding a horse?
Okay, but how is any of that is relevant to the original point that "you have to make the choice of app store together with the choice of the entire platform including the hardware and operating system".
It seems to me, when you make the choice of what gaming console to buy, you take the entire ecosystem into account. When you make the choice of what phone to buy, you do the same thing. That's not an unreasonable thing to do in either case.
You're framing it as if you had no choice of what phone to buy and now you're somehow stuck with an iPhone with all these restrictions you don't like. But you did have a choice when you made the original purchase!
> Also notice that the cost of a game (typically $50) is a lot closer to the cost of a console (<$500) than the cost of an app (typically $1) is to the cost of the average iPhone ($800).
Again, not sure why this is relevant. The vast majority of apps are free anyway (in which case there is no cost to switch) and other apps may come with you because your account is separate from the app itself (Netflix, etc).
> How is this not like saying that a monopoly on gasoline is fine because you're only being constrained by your "personal preference" to drive a car instead of riding a horse?
A horse is not a "reasonably interchangeable substitute" for a car. An Xbox is a "reasonably interchangeable substitute" for a Playstation.
>Apple's argument, which I tend to agree with, is that the user does have a choice of app store, which they make by buying an iPhone instead of an Android phone
"We're a Duopoly, not a Monopoly" isn't a winning argument.
Apple's argument, which I tend to agree with, is that the user does have a choice of app store, which they make by buying an iPhone instead of an Android phone (or a Xiaomi phone, or a Kindle, or whatever).
The reason I agree with this is that, for me, the App Store and how it's handled is one of the big draws of the iPhone; I've heard a lot fewer stories about malicious software, re-uploaded software with malware installed, software that walks you through the process of enabling sideloading or enabling adb connections so that you can install this one thing one time, all of which users might have to deal with without necessarily understanding the repercussions of what they're doing.
So once you've purchased an iPhone you don't have a choice of App Store, but you do make that choice, arguably, when you purchase your phone. The biggest argument against this is that if you've already invested a lot into apps on the App Store, then there's not a lot of option to switch app stores, but there is still a choice that users can make.
> The strongest argument that this isn't the case is that it's common for people to buy multiple different consoles at once, so if the customer can't get a game on one console, they could still get the same game on another one because they actually own multiple consoles at the same time.
I'm not sure this is actually the case for most people. I don't think the typical person is going to spend, for example, $600 on a Playstation 5, and then decide that they don't like how Sony handles their store so they go and buy an XBox Series X for another $600 so that they can get the best of both worlds, or get access to a different store with different policies.