Whether the current definition of a monopoly needs to change.
If you are mixing the two arguments discourse can go nowhere because you're substantively discussing cause and effect. The current definition of a monopoly needs to change, imo, then we can talk about whether Apple is a monopoly.
I'm also interested in discussing conglomerates and whether they are good or bad, and how to control them similar to monopolies, but that discourse can't be had until we can agree on something like the definition of a monopoly.
In my opinion we don't need to change the definition of monopoly, we need to integrate "conflict of interest" more into anti-competitive practice discourse.
Apple, Google, etc. are having their cake and eating it, too. They have platform which they charge others to use (ok), and then they study usage data (somewhat shady) and then launch direct competitors (<<super>> shady).
That's the root of the problem in many cases.
Of course, this needs to be coupled with stronger anti-cartel enforcement. Because tech is rarely a pure monopoly, but extremely often is ends up under the control of a cartel.
Honestly the shadiest practitioner here is Amazon. Google and Facebook are possibly second and third. I think Apple is a pretty distant one, maybe behind folks like Netflix.
Most of the apps that Apple sells are already in highly competitive markets like music, video streaming, cloud storage, etc.
I really don’t feel bad if some developer selling a leveler app for 99¢ goes out of business because Apple pre-installs a free leveling app on the iPhone.
Agreed. Lina Khan is one of my favorite voices on this matter for that reason.
Edit:
Stating my opinion without why isn't very HN-ly of me, eh?
She's been on Planet Money and discussed her ideas, where they come from, etc before. I don't think I'd quite do them justice explaining them myself. Apparently she's now a chair of the FTC as well (which I was unaware of).
In one of the podcasts she dives into the history of anti-trust. She talks about how after Standard Oil we convinced ourselves everything was a monopoly and stifled a lot of innovation, which led to some reforms later and the anti-trust we have today which are demonstrably too permissive. She has picked on Amazon (as a wider corporation) quite a bit, but a lot of it has to do with the practices of their ecommerce division and the extent to which Amazon can compete with it's vendors. Basically, she believes there's a middleground to be found between the two anti-trust time periods and that it's important to be concise in how we do that. You can see some of her specific criticisms in the article above.
I initially downvoted but thought it would be better to ask for the information I think would make your comment more helpful.
Would you mind linking to something pertinent, in order to add to the discussion? What does she say? Where does she say it? Why does that appeal to you?
To be fair, when Hacker News publishes "____ Has Died" posts and makes the title bar black, 99% of the time I have absolutely zero idea who "____" was. So I don't think it's terribly over-burdensome to expect the curious to highlight a name, right-click, and select "Search".
In this case, the opening of the person's Wikipedia page probably sums it up right away:
> In the article, Khan argued that the current American antitrust law framework, which focuses on keeping consumer prices down, cannot account for the anticompetitive effects of platform-based business models such as that of Amazon. She proposed alternative approaches for doing so, including "restoring traditional antitrust and competition policy principles or applying common carrier obligations and duties."
She's been on Planet Money and discussed her ideas, where they come from, etc before. I don't think I'd quite do them justice explaining them myself. Apparently she's now a chair of the FTC as well (which I was unaware of).
In one of the podcasts she dives into the history of anti-trust. She talks about how after Standard Oil we convinced ourselves everything was a monopoly and stifled a lot of innovation, which led to some reforms later and the anti-trust we have today which are demonstrably too permissive. She has picked on Amazon (as a wider corporation) quite a bit, but a lot of it has to do with the practices of their ecommerce division and the extent to which Amazon can compete with it's vendors. Basically, she believes there's a middleground to be found between the two anti-trust time periods and that it's important to be concise in how we do that. You can see some of her specific criticisms in the article above.
The problem is that the proposed new definition of "monopoly" generally goes something like "any company who has a product that I like and does anything at all with that product that I don't like." Like, regardless of what the iPhone's market share is, if I like to use my iPhone, but I don't like one aspect of the iPhone, that means that Apple is acting like a monopoly because they're not completely honoring my personal preferences and the only option I have is to switch to another smartphone which I don't want to do.
The issue is more that they are conglomerates - they control the device, the discovery mechanism, the payment mechanism, and the identity mechanism. In each of those areas, they may or may not be a monopoly - but together their broad control creates an anti-competitive environment.
How would you like the definition of a monopoly to change? Or to avoid sniping over details if you're not sure of a definition text, how would you like it to change and to what objective?
Personally? I think we should get away from "monopoly" and move towards "excessively large market entity."
The problems now have more to do with market capitalization / revenue than they do with physical control.
Apple or Google aren't trying to buy all the railroad tracks between Cincinnati and Kansas City (app stores aside). They're trying to assemble a company that owns all the disparate but critical pieces in an ecosystem, then leverage those into extracting higher than free market rents.
Consequently, remedies shouldn't be the same as for monopolies (read: breaking up companies). They should instead of targeted on (1) classifying corporations by their size & (2) placing limits on their actions, in places where that size provides its own monopolistic-esque advantage.
Afaict, these should take the form of prohibiting acquisitions of competitors (Facebook shouldn't be able to buy Instagram or WhatsApp, but Instagram and WhatsApp should have been allowed to buy each other / merge) and stricter limits on market entry (FAANGM or SoftBank deciding they want to throw stupid money into a hole to poison the well and capture market share).
I'd rather stay away from focusing on the size of the org itself, and moreso on the "markets" that they create.
When a platform or market is created by an entity, and that platform reaches a certain scale, they must allow free competition within that market.
Here's an extreme example. Say somewhere down the line Facebook invents some metaverse or VR world. This becomes the primary form of interaction between people... 99% of interactions take place in this virtual world. It's clear the scale and extent to which this platform impacts people's lives is substantial. So Facebook logically would have to allow other sellers to enter this virtual world and compete to drive prices towards a free market equilibrium.
Past monopoly legislation has focused on competition outside the walls, product vs product. But nowadays the walled gardens are getting big enough to the point that these companies have large control over our lives.
Maybe that example just muddies things, but the important thing in my mind is to identify "private markets" and enforce that competition be allowed.
It's a good point. To quantify it, I guess you'd look at total user count and percent of all users on the platform?
Most of the ills we're trying to avoid don't seem to easily slip around, if there's a law that says "If you control more than 25% of a market of more than 1M users..."
I don't think anyone is arguing that Apple shouldn't be allowed to create an iEcosystem.
But what we all want is a future where Apple's ownership of the iEcosystem can't be used in such a way, and generate enough profit, that no one can ever overturn Apple's position.
Your describing a monopoly. IMO the real question is what actually harms consumers.
Requiring companies to open their platforms is one option for regulation, but perhaps not ideal. Great for tech companies sure, but possibly a huge opportunity for scammers. Consumers and companies are often at odds, banning app coins for example is great for gamers and the opposite of an open platform.
A flat regulation that all software platforms are limited to X% fees might be a better option.
What probably harms consumers the most is that companies with large purses have an outsized influence on policy and typically write their own regulations that serve to generate additional profit and make it difficult for new entrants to the market to emerge. You don't need to have a monopoly for that, just a good old fasioned colluding industry and a politician who cares more about their individual wealth than the collective good of their electorate that they represent.
You're right that the analogy was not quite right.
Here's a better one. Facebook creates a virtual world where 50% of the population choose. Apple creates a different virtual world which the other 50% choose.
If you simply look at the boundary/entrance you can say there's freedom of choice. But whether you choose apple or Facebook, there's 0 competition once you're inside that world.
Further, once you've established a home and connections within one world, switching to the other becomes quite expensive.
Competition at the gates, monopoly within.
I might add that this is very similar to the concept of company scrip whereby the local coal mine had a monopoly over local jobs and gouged workers for basic necessities. Absolutely you could have moved a town over, but the cost to do so was deemed too high in many cases.
When cost of switching is high, monopolistic power can be enforced upon customers. It's a similar situation with a lot of SaaS who have pricing power to strong arm their customers into high margins due to the cost of switching to alternative technologies. In a truly competitive market, SaaS margins should be close to 0. Obviously that's not the case today.
Regulation will catch up to all of these tricks, just a question of the timeline. Capitalism only works well when there's an environment of competition, and leveraging high costs of switching or large gated systems to enable profit margins well beyond what a competitive market would bear is antithetical to this concept.
That's why antitrust law is so important, and needs to evolve to handle modern business structures.
That’s not really it though, HN like most websites are 100% HN once your inside their walled garden. That’s the normal situation, nobody complains because McDonalds happy meals only contain toys sourced by McDonalds. In the past it’s only monopolies where companies dominate positions gave them leverage that was an issue, otherwise consumer choice was upfront and that worked.
Xbox, iOS, and Windows are platforms that also provide basic utility where third parties are part of the basic product. It’s by owning a platform they gain some control over that relationship between consumers and those other companies. Such complex relationships aren’t completely new, malls are gatekeepers for the stores within. But, such relations are normally heavily regulated.
The obvious difference is the scale. Sometimes difference in scale is difference in nature.
All of what you listed are easily substituted, and not very impactful to somebody's life.
The same games exist on Xbox and Playstation (95% overlap). McDonald's is a buy one time product, where you can easily choose on a given day to go to BK or Wendy's. You buy an iphone, you aren't going to just buy an Android the next day if Apple raises costs. Isn't it obvious how different these are?
You can bet that if Microsoft charged any third party apps on windows 30% of their revenue they would have been regulated long ago. You really think otherwise?
I don't understand the Apple defenders. Encouraging actual competition within the platform is the pro business stance. Competition is the basic element that makes capitalism work.
You don't have competition if cost of switching is high, it's that simple.
Platforms with sufficient impact on people's lives, and sufficiently high cost of switching will be regulated to require competition. It's as simple as that, though fanboys will kick and scream for the next few years until it passes into law. It's the obvious outcome, and china is already paving the way on legislation.
I just want take the time to compliment this question. I find it difficult to articulate exactly what you've done here, but I wish I saw it more often.
Why would we want to change a term that is used in countless legal and economic contexts just to dumb down the definition for the sake of a few people who haven’t bothered to do a bit of light reading on the topic?
Have you any idea of how many laws would need to change, not to mention all the academic papers, legal and academic commentaries and textbooks?
The current definition of a monopoly.
Whether the current definition of a monopoly needs to change.
If you are mixing the two arguments discourse can go nowhere because you're substantively discussing cause and effect. The current definition of a monopoly needs to change, imo, then we can talk about whether Apple is a monopoly.
I'm also interested in discussing conglomerates and whether they are good or bad, and how to control them similar to monopolies, but that discourse can't be had until we can agree on something like the definition of a monopoly.