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Why the Anti-Trust Argument Against Apple Is Wrong

8/19/2020

 
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I heard Marco Arment make an attempt to explain why he’s on Epic’s side in this AppStore battle. His argument boils down to 5 words, “because Apple is so big”. He doesn’t support the government exerting control over game consoles “because they’re not so big”.
​I also saw a writer for Forbes start his article out with “imagine everyone on the eastern seaboard had to buy their merchandise from the same store”.  He’s basically making the same argument as Marco Arment. 
 
However, these guys seem to have never studied business law and have no idea where the original case for anti-trust began. Because if they were familiar with the original cases, they would see that it doesn’t apply to Apple. Of course, Anti-trust has since been twisted to extend into other areas. But that doesn’t negate the genesis of true anti-trust and what brought it all about in the first place. 
 
Anti-trust law was never about forcing retailers to start offering competitors products on their own platforms. It was about retailers sabotaging other retail platforms. For instance, lets say you sold oil in Texas. However a new oil company was starting up. If you lowered your prices below your cost in order to drive that new company out of business you would be guilty of anti-competitive practices. It’s illegal to start dumping product at below cost prices temporarily in order to drive away competition. 
 
Apple spends billions on iOS and it’s the glue that holds everything together. But Apple isn’t sabotaging other platforms and it isn’t even the largest platform. Furthermore, Apple isn’t giving away services below cost. In fact, developers have the opposite complaint, that the prices are too high. Anti-Trust is about companies whose prices are too low.
 
If we lived in a world where there was no Google. And Windows, Blackberry, and Apple were all competing for market share and developers. There might be more of an anti-trust case against Apple if they started offering their phones below cost and charging developers extremely low fees to sell their apps on the AppStore. The aim would be to drive Windows and Blackberry out of business. This is exactly the opposite of what Apple is doing now. Apple charges high prices for their hardware and at least a fair price for their AppStore commission. 
 
But there is a Google. And Anti-trust behavior would look a lot more like what they are doing. No one but Apple can compete with the largest phone OS on the planet when Google is offering their software platform at zero cost. Blackberry and Windows gave up. Apple is the only one left. This is almost textbook anti-trust right there. The largest company in the industry is offering their product at a price at which no one else can compete with. 
 
Android OS is on over 4 out of 5 phones on the planet and developers are trying to kill the only alternative to that. A scrappy company who has managed to compete via higher quality and out-innovating the 800-pound gorilla. It’s not easy competing with a company that gives away their OS for free. 
 
Google pays for their OS development by surveilling their customers and selling targeted ads to other companies. It’s a different business model. Apple pays for their OS development through selling hardware and software commissions. There is nothing anti-trust about this. Ironically, the developers are attacking the only company that stands between Android and world domination. 
 
Anti-trust was about sabotaging other platforms. It was never intended to force companies to start actively supporting their competitors on their own platform. Size has nothing to do with this. The word to describe Apple’s situation where billions of people choose to pay more for their products, success. 

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    Robert Perez

    Manufacturing and distribution analysis since 1993.

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