The Verge:
enator Elizabeth Warren proposed breaking up Amazon, Google, and Facebook yesterday in a post published on Medium. Her plan, which comes as the Democratic presidential primary contest continues to heat up, would classify any company that runs a marketplace and makes more than $25 billion a year in revenue as a “platform utility” and prohibit those companies from using those platforms from selling their own products.
But Warren’s proposal didn’t mention Apple, which clearly matches the same set of criteria: the company makes far more than $25 billion a year in revenue, and it operates the iOS App Store, in which it distributes its own apps.
This is just electioneering and won’t amount to anything but I thought it odd that, when asked why she didn’t include Apple in her original post, the senator said, “No reason.” Apple is larger than all of the other companies she originally mentioned.
She still doesn’t have a reason. Weakest candidate of the bunch anyway.
The reason is the need for strong antitrust laws, which has never been greater.
Warren is a champion of consumers’ rights and an excellent analyst of the excesses of unregulated capitalism. She’s only “weak” if you measure her by a willingness to sell policy decisions to the highest bidder.
I like Warren, but I haven’t heard a sensible explanation from her on this topic. These criteria strike me as arbitrary, intended to capture certain companies rather than specific problematic behaviors.
Her office later clarified; yes, this includes Apple as well. No matter. Very, very few of us can genuinely benefit from the ever-growing power of multinational corporations who’ve effectively cleared away any obstacles to their growth.
I’ve admired Elizabeth Warren ever since seeing her 2007 speech at UC Berkeley, “The Coming Collapse of the Middle Class.” I wish she was my Senator.
Gizmodo published a tech series, “Life without the Tech Giants.” I don’t completely agree with all of its points, but it does turn out our online life is very tightly coupled to F/A/A/N/M/G.
The one most infuriating to me is how to avoid Facebook. I’m pretty much ready to kick my FB account to the curb, but I’m hard locked into Facebook due to WhatsApp. I wish FB never was allowed to acquire them; the reduced competition between WhatsApp and Messenger was not good for consumers.
I definitely think big mergers and competition by acquisition are major issues. I’m not sure Warren’s proposal actually addresses those issues in a way that is likely to hold up.
“prohibit those companies from using those platforms from selling their own products”
That’s … what, like, what?
WHY? Because Apple’s going to push out other music by selling Apple Made Music?
Because the App Store is full of only Apple products that third-parties can’t compete with?
Why would she think that makes any sense at all?
Like hell she is.
Her “studies” about bankruptcy were awful.
Her “protection” of consumers via a no-oversight agency aren’t.
She’s “weak” at economics, but “strong” on selling people the belief she’s “helping”.
How effective was that agency actually allowed to be after the conservatives got through crippling it?
Gizmodo published a tech series, “Life without the Tech Giants.” I don’t completely agree with all of its points, but it does turn out our online life is very tightly coupled to F/A/A/N/M/G.
The one most infuriating to me is how to avoid Facebook. I’m pretty much ready to kick my FB account to the curb, but I’m hard locked into Facebook due to WhatsApp. I wish FB never was allowed to acquire them; the reduced competition between WhatsApp and Messenger was not good for consumers.
Janak touches on this, but the real issue – and it IS an issue – is that the largest companies are so big that they can buy any prospective competitor and offer terms that it would be silly to turn down. Instagram could have been a real threat to Facebook but they walked in when it was 4 guys and said ‘hey, want a billion dollars?” and you can’t blame the IG guys for saying Yes. Whatsapp the same.
When Amazon bought Whole Foods it was a $14b stock deal. The announcement bumped Amazon stock by more than that… the next day. The acquistion was basically paid for by announcing that it happened.
It’s a bad thing when a handful of companies so dominate the landscape that competition in their realms is basically impossible. However, I don’t see Apple in that light and I dont really think Warren’s criteria get at the problem adequately.
Let me get this straight. Final Cut Pro couldn’t be sold on the App Store?
Not only that, but they are so intertwined in the core internet infrastructure that they know which upstarts are likely to be successful even before the companies themselves know. Google and Facebook know who people are visiting and who they risk losing share to.
Because Apple has a significant financial advantage by double dipping. Apple forces Spotify to pay Apple 15-30% off the top for subscriptions. Even if their cost basis of Apple Music and Spotify are identical, this gives Apple a big competitive advantage over other media companies.
By looking at pricing power advantage. For example in music, Apple forces Spotify to pay Apple 15-30% off the top for subscriptions. Even if their cost basis of Apple Music and Spotify are identical, this gives Apple a big competitive advantage over other media companies. Do the same in streaming video, etc.
That same dynamic happens in most retail models. I do think Apple’s cut is high in many cases, but why single out these companies and not all the others?
Market share and power. iOS has 45% and Android has 55%. Outside of them you have no choice. In the retail world, Walmart is the leader with 15% and you have a ton of options outside of them and Target.
Microsoft was a bigger company than either with more historical leverage and they couldn’t force market adoption of their platform. How much of this has to do with Apple and Google and how much with the fact that developer appetite and ROI for supporting multiple platforms is minimal?
What is the harm caused by the dominance of iOS and Android in this space?
Microsoft had less leverage (or rather used it more judiciously). You could install any browser or application that you wanted on your PC without a cut going to Microsoft. Lotus didn’t have to give a 30% cut to Microsoft as Excel ate 123’s lunch. You could choose the default application for different file types. If I wanted my default browser to be Netscape and my default email application to be Eudora, I could. MS never forced users to default to IE and Outlook. There is literally only one browser allowed on iOS as the rest are just reskinned versions of the rendering engine and Apple forces you to default to Safari, Maps or Mail.
The harm caused is that there ends up being less consumer choice and competition. The problem isn’t the dominance of the OS’s the problem is when the dominance of the OS is used in other areas to establish dominance in areas like music, video and news.
Microsoft lost a massive anti-trust case related to their anti-competitive practices around IE. Microsoft has also historically charged large fees to Xbox developers to use the platform. Apple doesn’t take a cut of Mac application sales outside the App Store.
The fact that Windows Phone / Mobile failed and couldn’t compete with iOS and Android demonstrates that “less consumer choice” isn’t the problem it is made out to be. It is simply not viable to have large numbers of choices in many markets and issues like security and privacy (which more restrictive marketplaces tend to be better able to deliver) are not valueless to consumers.