iPad's growing competition from Android could quell Apple antitrust talk

Posted:
in iPad edited January 2014
Growing competition from tablets running the Google Android operating system may help Apple and its iOS subscription plans for the iPad avoid antitrust probes, at least in the eyes of the European Union.



Regulators with the European Commission have said they cannot yet judge whether Apple has a dominant position in the tablet market, according to Bloomberg. Though Apple sold millions of iPads last year and took the vast majority of touchscreen tablet sales, it is a market that is "relatively new and evolving," they said.



Apple caught the ire of European newspapers before it even formally announced its iOS recurring subscription plans, of which the Cupertino, Calif., company takes a 30 percent cut of all sales. Concerns from European publishers prompted Belgian lawmakers to file formal antitrust complaints with the European Union.



But in a response from EU commissioner Andris Piebalgs earlier this month, the possibility of an antitrust probe was downplayed: "Alternative applications platforms exist and several companies have recently launched or are expected to launch in the near future a number of devices similar in terms of functionality to the iPad."



On Tuesday, Apple unveiled its subscription plan for the iOS App Store on the iPad and iPhone. In addition to allowing content providers to offer recurring subscription billing, the company also takes a 30 percent cut of all sales and has banned links within App Store software to external websites that would allow users to purchase content or subscriptions at a lower price and without Apple's share.



Android-maker Google quickly countered by announcing its "One Pass" service for subscriptions just a day later. In the competing product, the search giant takes a smaller 10 percent cut of transactions and offers users the ability to view content in a Web browser on a variety of devices with a single login. But Google has also agreed to allow publishers to control subscribers' personal data, while Apple gives customers the option of providing a publisher with only their name, e-mail address and zip code when they subscribe.



While regulators in Europe for now do not seem convinced that Apple is engaged in antitrust practices, The Wall Street Journal reported that the U.S. Justice Department and Federal Trade Commission are currently looking into Apple's terms in a "preliminary stage." However, a formal investigation has yet to be launched. The report also cited the European Commission as saying it was "carefully monitoring the situation.
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Comments

  • Reply 1 of 93
    I don't think Apple/SJ want a monopoly even if they get one - they want to be the best, high-end option. Here's hoping we get competition from a decent third party who does want to cater for the entire market (a la Google) - but without the privacy concerns :/
  • Reply 2 of 93
    gwydiongwydion Posts: 1,067member
    In Europe they don't need to be a monopoly to be fined by anti competitive practices. Telefonica, Siemenes, etc have been fined with fines greater than 100 million ?
  • Reply 3 of 93
    how can you have an antitrust investigation when there's not even an operation going on?



    shakespeare said it; "much ado about nothing"
  • Reply 4 of 93
    Quote:
    Originally Posted by ezduzit View Post


    how can you have an antitrust investigation when there's not even an operation going on?



    shakespeare said it; "much ado about nothing"



    Much ado about nothing indeed.



    They aren;t using any monopoly power to squeeze out competition. You can agree to their ad rules or not. Nothing anti competitive about that in this case.
  • Reply 5 of 93
    pxtpxt Posts: 683member
    deleted.
  • Reply 6 of 93
    Yeah, some toll roads are more expensive than others...
  • Reply 7 of 93
    jcozjcoz Posts: 251member
    Quote:
    Originally Posted by oseame View Post


    I don't think Apple/SJ want a monopoly even if they get one - they want to be the best, high-end option. Here's hoping we get competition from a decent third party who does want to cater for the entire market (a la Google) - but without the privacy concerns :/



    If they wanted to be the best high end option, they wouldn't have priced the ipad at $499.



    Simple as that.



    They priced the iPad WAY TOO aggressively to defend that assertion.
  • Reply 8 of 93
    ronboronbo Posts: 669member
    Maybe this is news on other sites, but is anyone focusing the same attention on Amazon with its Kindle? Amazon has a local monopoly with its Kindle, and you get a take-it-or-leave-it set of options. And Sony can't sell its wares for the Kindle. They could sell you a DRM free format and let you put it on a Kindle if you wanted to, but they (probably correctly) don't feel that makes good business sense. Where's the outcry about that?
  • Reply 9 of 93
    Quote:
    Originally Posted by Jcoz View Post


    If they wanted to be the best high end option, they wouldn't have priced the ipad at $499.



    Simple as that.



    They priced the iPad WAY TOO aggressively to defend that assertion.



    The iPad price scaled from $499 to $829, and their Mac lineup starts at $999. As much of a utility the iPad is, it is in no way as powerful as a Mac, so to price one at the same price (or more) would not make any sense. Steve Jobs presented the iPad as an in-between device, so the price needed to be in between a smartphone and a laptop as well (at least in Apple's ecosystem). The iPad price fits perfectly for the type of device Apple is trying to promote.
  • Reply 10 of 93
    macrulezmacrulez Posts: 2,455member
    deleted
  • Reply 11 of 93
    I suspect the real legal debate won't hinge on market share and anti-trust laws, which can get messy and often ends up inconclusive.



    No, the debate is really a public policy issue. Is the public interest best served by putting cell phone companies and those who make digital devices such as Apple's iPad and Amazon's Kindle under the digital equivalent of the common carrier laws that apply to the shipping industry? For the full details, check out the "common carrier" entry in Wikipedia.



    Here is how it works in practice. When you want to ship a package, you don't have to worry about whether the shipping firm you want to use allows you to ship through them or whether they will apply a 30% surcharge simply because you compete with a firm that the shipping company owns. The 30% surcharge is the package equivalent of what Apple wants to do with ebooks. FedEx and UPS can't enforce such surcharges.



    No, subject to safety regulations and weight limitations, a common carrier has to transport any package the public brings in and to do so at certain fixed rates. They can't charge one company one rate and another company a different rate. They particularly can't do so to restrict competition.



    The same is true for forms of communication that involve data rather than physical objects. Your landline telephone company can't block or impose surcharges on a call you might make to a cellular company under the assumption that you might be transferring your service to them. A common carrier has a public responsibility, enforced by law, to carry everyone's packages or data without discrimination or prejudice.



    What the Kindle does and what Apple wants the iPad to begin to do is discriminate between data in ways that a public carrier cannot. Apple wants mobi ebook data intended for the Kindle app to be subject to a 30% of the retail price surcharge over that same book's data, encoded as epub and intended for their own iBooks apt. They're doing precisely what a common carrier cannot do.



    Keep in mind that the law doesn't force every transporter of goods or data to be a public carrier. In part, the distinction lies in the public interest. Some private carriers (called contract carriers) are acceptable as long as the public also has access to common carriers, otherwise there would be no way goods could move freely about the country. Apple could argue that Google and the Droid OS are providing the common carrier OS, so they can be as restrictive as they like.



    But Apple faces two problems that have little to do with market share. First, Apple isn't refusing to permit ebook data to be transported to Amazon and Sony apps. It is simply demanding a hefty surcharge, one that is identical to the entire income that Amazon earns from those books. That's an obvious and deliberate anti-competitive activity that's not in the public interest, whatever Apple's market share.



    Even more important, in virtually every one of its ad campaigns, Apple identifies itself as a common carrier. When it promotes all the apps created by others that run on iPhones and iPads, it is strongly implying that any of those apps can access any data the user wants without unfair restrictions. Because of that advertising, Apple can't change, years after the iPhone came out, and suddenly transform itself into something much more restrictive. It can't sell tens of millions of devices under one claim and suddenly abandon that claim. Apple has made itself a de facto common carrier.



    Interestingly, the same is not true of Amazon's Kindle. Amazon has never claimed that its device has any primary purpose other than displaying books and magazines downloaded from Amazon. What other features it has are limited, restricted and clearly labeled experimental. Amazon has been very clear that features other than reading books and other material provided through Amazon may not always be there. Under law, it would seem that they've established themselves as a contract carrier. When someone activates a Kindle, they go through a procedure that establishes a formal contractual relationship between themselves and Amazon, a contract that involves the buying and selling of ebook data, with Amazon agreeing to provide certain services and the customer agreeing to pay for those services.



    I'm not a lawyer, although I did represent myself in a complex legal dispute that I won handily. But common carrier status seems to be the real legal issue we are disputing here.



    First, is it in the public interest to insist that all those who make devices like iPhones and iPads behave as common carriers unless they clearly market themselves as contract carriers. That would mean an end to many of the restrictions that both Apple and cell phone companies apply to their products, as well as all the niggling charges.

    Second, has Apple by its actions transformed itself into a de facto common carrier? If the latter is true, then Apple's behavior is clearly illegal.


    --Michael W. Perry, Seattle
  • Reply 12 of 93
    Quote:
    Originally Posted by MacRulez View Post


    Is the web broken?



    Why spend all that money making an app for one platform when you can make a web app for your content and get 100% of all people using all web-capable devices?



    That's exactly what Google is trying to do with Google Books, and (potentially) Google Music. Just understand that every word you read and listen to, Google will track it, store it, and sell it to the highest bidder.
  • Reply 13 of 93
    Quote:
    Originally Posted by hittrj01 View Post


    That's exactly what Google is trying to do with Google Books, and (potentially) Google Music. Just understand that every word you read and listen to, Google will track it, store it, and sell it to the highest bidder.



    The words you typed were tracked by Tribal Fusion, Google Analytics, Google AdSense, Quantcast, Federated Media, OpenX, Crowd Science, Advertising.com, ValueClick Media, AdHere and Doubleclick, courtesy of AI. AI sells you to all of these advertisers, and more. They know who you are. They know what you write. They know what makes you click.



    That is no different from anything that Apple and Google are doing together. These companies need to make money. You think they should provide content and services to you for free?
  • Reply 14 of 93
    Quote:
    Originally Posted by Inkling View Post


    I suspect the real legal debate won't hinge on market share and anti-trust laws, which can get messy and often ends up inconclusive.



    No, the debate is really a public policy issue. Is the public interest best served by putting cell phone companies and those who make digital devices such as Apple's iPad and Amazon's Kindle under the digital equivalent of the common carrier laws that apply to the shipping industry? For the full details, check out the "common carrier" entry in Wikipedia.



    Here is how it works in practice. When you want to ship a package, you don't have to worry about whether the shipping firm you want to use allows you to ship through them or whether they will apply a 30% surcharge simply because you compete with a firm that the shipping company owns. The 30% surcharge is the package equivalent of what Apple wants to do with ebooks. FedEx and UPS can't enforce such surcharges. ...



    Nonsense.
  • Reply 15 of 93
    herbapouherbapou Posts: 2,221member
    Quote:
    Originally Posted by Jcoz View Post


    They priced the iPad WAY TOO aggressively to defend that assertion.



    Have you seen Apple lastest earnings ? They sure aint giving them away.
  • Reply 16 of 93
    Quote:
    Originally Posted by AppleInsider View Post


    Regulators with the European Commission have said they cannot yet judge whether Apple has a dominant position in the tablet market, according to Bloomberg. Though Apple sold millions of iPads last year and took the vast majority of touchscreen tablet sales, it is a market that is "relatively new and evolving," they said.



    Let's hope that US regulators (FTC, DoJ) will have half the brains of these EU folks, and don't, through their overzealousness, choke off this exciting new market.



    Let it play out. At least for a while. The self-destruction of the traditional media is near-totally self-induced, and it is past time to stop paying attention to those caterwaulers.
  • Reply 17 of 93
    Quote:
    Originally Posted by anonymouse View Post


    Nonsense.



    Once again you have no clue, nothing intelligent to say, and yet you put down others comments.
  • Reply 18 of 93
    As much as I despise parts of the newly enforced app store rules, I oppose government intervention. The Market will sort this out via their wallet.



    With that said, the app store rules for content providers such as Hulu, Netflix, Amazon (Kindle app), Barnes and Noble etc. are truly over the top. None of these vendors work on a margin that would allow them to give-up 30% of their revenue. I would argue their apps have spurred many iPads sales. Maybe they should get a cut of that revenue from Apple?
  • Reply 19 of 93
    Quote:
    Originally Posted by anantksundaram View Post


    Let's hope that US regulators (FTC, DoJ) will have half the brains of these EU folks, and don't, through their overzealousness, choke off this exciting new market.



    Apple is the one trying to choke off the market and elimiate other sales channels. Why not have the FTC, or perhaps an act of Congress, allow fair price competition on different distrubution methods and providers? Why not let Apple charge whatever fees they want for in app purchases, but prohibit apple from requiring the in app price be the same or lower and why not prohibit apple from banning links to other competing purchasing options?



    I have a hard time seeing how anti-competitive behavior that resticts choice is going to promote an exciting new market.
  • Reply 20 of 93
    Quote:
    Originally Posted by AIaddict View Post


    Once again you have no clue, nothing intelligent to say, and yet you put down others comments.



    Bullshit is bullshit. There's no point in wasting time replying to long-winded nonsense.
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