It's not about having a dominant position, it's about using your power in one market to further your position in another one. Apple control iOS and macOS which is always bundled with the hardware, and they use that to strengthen their own applications. Competitors cannot do it as they do not have the same access that Apple does regarding APIs and other features.
Apple uses their own technology to make their products better. That’s not a scandal. Their products aren’t the most dominant in streaming, maps, or payment. Most of the complaints are about what they aren’t doing (going out of their way to make proprietary features available to 3ps), not what they are doing (say: giving themselves special push notification permissions). So what influence are they exerting exactly? Why is it so pernicious?
They're exerting the same influence that Google did over their Android partners. They created a faux-open market with arbitrary rules that ensure their products always win. Google lost their case because of this and Apple should too.
Google lost their case because, among other things, they offered back room deals which favored a blessed few and were not available to all. E.g. you could not get the rate Spotify was getting charged for in app purchases (zero%).
The DOJ's 90 page lawsuit is a lot of things, but precise or even factual it is not. For example, it doesn't even cite the selling price or terms of the original iPhone correctly (off by almost 2x) and invents vague terms like "the performance smartphone market."
You didn’t ask “what was the price of the original iPhone”. Your questions were…
> So what influence are they exerting exactly? Why is it so pernicious?
Which are both answered in the document.
Almost the entire document is defining the performance smartphone market. It’s mentioned in the document 88 times. The definition isn’t “phones over $400” because it’s defined by the market forces that Apple creates - there’s a feedback loop
Okay. But what happened to the Windows Phone and its integration with the Windows OS? It simply failed.
There is a valid argument to be made here against Apple and how their firm grip is stopping a market from advancing further. But not by using their technical success in creating a great platform.
It's all about economical fair play. If you create a market, but position yourself as the de-facto winner, it will not be a healthy one. It was all good, especially when default apps provided by Apple were free, but now with Apple Music, Apple TV, and iCloud being paid services, competitors worry about being not able to compete.
Yes. That’s it. That’s anti-competitive. That’s where the consumer benefit was curtailed and competition was limited.
People usually talk about companies who cannot compete with Apple on fair grounds and then claim foul. Which sounds like they’re trying to punish a company for being successful not for playing unfairly.
> Your list of services where you claim Apple has a dominant position is entirely products where it does not have a dominant position.
I am not claiming that. I am claiming that Apple has a very dominant position over the most important sales channel lots of companies have to rely on to compete.
Just one example is the at this point famous App Store tax. From a 10$ Apple Music subscription, 9.8$ (lets use these cents for processing) goes to Apple.
For a 10$ Spotify subscription, Spotify makes 7$ after Apple takes their 30% fee. Sure one may say, hey, but Spotify isn't forced to use Apple's service for payments, except they are. Otherwise they loose access to *the* platform most people listen to their music nowadays. Spotify also isn't allow to make Apple subscriptions more expensive and inform users about cheaper subscriptions on their website, because otherwise they'd loose access to the important platform. I guess one can see how this could be considered a abuse of the dominant marked position?
Strictly speaking, for this example past tense would have been fitting. Not because Apple is so generous, but because the EU also considered much of this behavior to be anti-competitive. Hence me wondering if the US courts would be following this line of thinking.
What frustrates me the most is Apple's double dipping. They argue that those fees are required for the development of the platform and technology, pretending as if they didn't already charge a hefty price tag on the products they sell. And in the end, its still the user who is getting screwed. It's not like Spotify or any other provider is eating the platform cost, they charge it up to the user by making their services more expensive.
Also, in their defense in the EU hearings Apple argued that Spotify's success is in large part thanks to the App Store, so it would only be fair for them to pay that amount. The amount of arrogance in that statement is astonishing imho. Developing for a platform is a mutually beneficial relationship, not an altruistic development aid by Apple. What would iPhone sales look like if there was no third party Mail client, no Twitter app and no Instagram or Facebook for their phones?
TD;DR: easy demonstration of how Apple makes more money selling the same product, not because they're more efficient but because they make all the rules.
Your stylized example is unrelated to reality. Users cannot subscribe to Spotify in app, so Apple makes no money from them while providing all the R&D they use to play audio on the device for free. Next, people say that the hassle of subscribing to Spotify outside the app is an insurmountable friction for Spotify, yet somehow Spotify is the dominant streaming music provider.
So Apple has built all the key innovations which make mobile music streaming a viable product, gives it to the biggest music streaming service for free, and then gets slammed because it doesn’t also go out of its way to allow that service to integrate with Apple’s assistant AI product (except when it does build that functionality, the streaming service doesn’t even adopt it!).
> Users cannot subscribe to Spotify in app, so Apple makes no money from
They don’t? This is because of the limitation puts on the App. Apple Music users can easily subscribe thanks to Apple being not negatively affected by its own restrictions.
> while providing all the R&D they use to play audio on the device for free
So you’re saying the developers fees pay for their R&D. So am I with my phone purchase. So I’m simply paying twice. To quote yourself, that is
> Simply absurd logic.
> Apple has built all the key innovations which make mobile music streaming a viable product, gives it to the biggest music streaming service
Have they? Spotify was a thing on the desktop way before it was on iPhone. Apple didn’t invent mp3 and all sorts of other stuff. They built the platform for their phones, no more, no less.
> gives it to the biggest music streaming service for free
It’s not free, quite the opposite. It comes with a steep fee when you sell on their platform.
> They don’t? This is because of the limitation puts on the App.
Just because there’s some reason for why Apple does not make money from Spotify does not invalidate the fact. Meanwhile, your entire argument depended on a false premise.
> Have they? Spotify was a thing on the desktop way before it was on iPhone.
And Rhapsody was on desktop way before Spotify. There’s a reason it didn’t take off.
> It’s not free, quite the opposite. It comes with a steep fee when you sell on their platform.
What steep fee? The one that the biggest music streaming company does not pay? How can a fee be both required and uncollected?
It doesn’t matter. I’m not the one whose arguments depend on Apple making money from Spotify.
> The device owner paid for their device and the OS.
I have to assume people writing on Hacker News are not so naive about software business models. The vast majority of software is not sold with a free license to developers to build anything they want packaged with the hardware sale.
This entire comment is wildly misinformed. Are you forgetting Apple charges like $1200 for a phone these days? They’re the most profitable company on the planet. Are you suggesting that in order to cover the extensive research and development costs of music playback (sorry did you really say this?), they need to take a 30% cut of every song played on the device?
As far as I can tell, you don't dispute a single statement in my comment.
> Are you forgetting Apple charges like $1200 for a phone these days?
This is a strawman. iPhone starts at $429 in the US, and there is no law saying companies can only monetize with up-front hardware costs. Such a law would be unprecedented in software.
> Are you suggesting that in order to cover the extensive research and development costs of music playback (sorry did you really say this?)
I didn't say that. I said mobile music playback. Streaming the world's music catalog to a mobile phone reliably with all-day battery life would be unthinkable 17 years ago, and the primary innovator making it happen was Apple, not Spotify. Core Media APIs are simply the tip of the iceberg, yet are widely recognized as best in class by a lot. Android took over a decade to catch up to iOS audio latency in 2013: https://android-developers.googleblog.com/2021/03/an-update-....
Remember when Spotify released their take on music playing hardware with Car Thing? They literally couldn't sell their first run of inventory and ended up taking a 8+ figure write down. That project probably cost Spotify more than they've paid Apple in fees in the last decade, yet the Spotify in-car experience is great because of CarPlay, an Apple technology!
> they need to take a 30% cut of every song played on the device?
I made no claims about how much Apple should be paid for this. I simply pointed out that Apple is paid nothing for it by Spotify, yet people still are upset by that.
> the world's music catalog to a mobile phone reliably with all-day battery life would be unthinkable 17 years ago
The reliability of the streaming is more dependent on the internet connection and the quality of Spotify's services. Apple made bluetooth reliable, but most music enthusiasts see Apple's killing of the audio jack (because innovation?... no wait it was greed) was a huge step back for audio quality. Samsung phones have better battery life while Sony has better audio hands down.
> the primary innovator making it happen was Apple
Based on what metric? Apple utilized patents from Nokia, Qualcomm, Sony, etc.
> there is no law saying companies can only monetize with up-front hardware costs.
I didn't say there was. Your assertion that "so Apple makes no money from them while providing all the R&D they use to play audio on the device for free", is what I was responding to. Consumers are paying for that R&D. You strawmanned my strawman... Apple's most popular phone is $999.
> Core Media APIs are simply the tip of the iceberg, yet are widely recognized as best in class by a lot
Best in class by what measure? It's no surprise that when HackerNews attempts to explain the ins and outs of the music industry they start and end with APIs... Have you heard of Beyonce? I promise you Apple's customers don't give a shit about what APIs are used to listen to their music. They'll listen to their music on car speakers. It's completely irrelevant to customers. And the people that really do care about audio quality want cables, which again, Apple killed. The audio latency article you referenced has absolutely no bearing on music playback, it pertains to real-time communications and games with user interaction. Listening to music isn't impacted by this metric, unless you think an extra 80ms after hitting play on Spotify is worth a 30% cut of Spotify's revenue. But somehow I suspect you'll attempt to justify that.
Totally agreed. And does Apple has a "dominant position" in text messaging? They have around 60% of total phone market share [1], but that seems like a far cry from, say, 80% or 90%, which is what I'd consider "dominant."
Microsoft had over 90% market share of the world's personal computers in the 1990s [2], which I'd also consider dominant... and which did result in some similar antitrust lawsuits.
Saying they don't have a monopoly over those services is still a stawman. They don't have a monopoly on music streaming, but they actively force Spotify to effectively support their own competitor via their 30% fee. Apple TV+ does not have more subscribers than Netflix, but apple famously makes rules that hinder Netflix ability to be competitive on iOS.
And if Apple was all about making the better product, why don't they allow the app developers to use their own payment processors. If Apple IAP was so superior to everything else, users and developers alike would surely gladly pay the 20x markup?
But heck, they don't even allow an App developer to tell their users about a cheaper price on their website or why the product is more expensive on iOS.
Wether you like it or not, as soon as a platform becomes as big as iOS or Android, market watchdogs will come to town. And that is good thing, because with competition the user usually profits over the long term.
Apple does not force Spotify to support its competition. Spotify does not offer any IAP so in fact it’s Apple that is giving away all its R&D into AVFoundation and various other cutting edge APIs for free to its competition. Apple does not make any money from Spotify.
It’s true when you become as successful as Apple, the rentiers will come knocking. That doesn’t make the rentiers’ case particularly strong or honorable.
Apple doesn’t build the platform as a generous gift to developers on their platform. The build this stuff because they have to, otherwise iOS would be an awful platform for developers and by extension the users of Apples platform.
You are pretending you cannot build a foundational platform without double dipping, yet they do with macOS.
