Apple uses platform dominance to 'lock out' competition, says Elizabeth Warren

Posted:
in General Discussion edited June 2016
Massachusetts Senator Elizabeth Warren turned a critical eye to Silicon Valley in a keynote speech delivered at New America's Open Markets Program on Wednesday, saying industry leaders Apple, Amazon and Google use their respective platforms to the detriment of smaller, less powerful competitors.




Falling just shy of accusing the tech giants of running a monopoly, Sen. Warren's (D-Mass.) remarks are in stark contrast to those presumptive Democratic presidential nominee Hillary Clinton made in laying out her technology agenda on Tuesday, a plan viewed as chummy to Silicon Valley. Warren was invited on stage at yesterday's event, prompting speculation that she might join Clinton on the Democratic ticket.

At the Open Markets Program, Warren cautioned against "consolidation and concentration" of power in the tech sector, reports Re/code. The senator wagged a finger at industry heavyweights Apple, Amazon and Google for leveraging their respective platforms to effectively "lock out smaller guys and newer guys."

"Google, Apple and Amazon have created disruptive technologies that changed the world, and [...] they deserve to be highly profitable and successful," Warren said. "But the opportunity to compete must remain open for new entrants and smaller competitors that want their chance to change the world again."

As it applies to Apple, Warren took issue with the company's strict control over its various App Stores, saying sales regulations make it difficult for third-party streaming services to compete against products like Apple Music. The issue has been raised before by firms marketing music streaming services, which in 2015 branded Apple's App Store policies as anti-competitive.

Apple takes a customary 30 percent cut of all purchases made through the iOS and Mac App Stores, including in-app transactions, meaning companies like Spotify must charge users an extra fee to break even. Spotify's premium $10 subscription tier, for example, sells for $13 on iOS and Apple does not allow linking to external stores. In response, Spotify last year encouraged customers to save money by bypassing the App Store and signing up online.

To its credit, Apple is planning to loosen restrictions when a new revenue sharing model rolls out this fall. Instead of charging 30 percent across the board, the company will reduce its take to 15 percent for customers who hold subscriptions for more than one year. The idea is to drive sustainable income instead of one-time app buy-ins. Spotify says the changes are not enough.

The streaming music company also took the opportunity to chime in on Warren's comments.

"Apple has long used its control of iOS to squash competition in music, driving up the prices of its competitors, inappropriately forbidding us from telling our customers about lower prices, and giving itself unfair advantages across its platform through everything from the lock screen to Siri," said Jonathan Prince, Global Head of Communications and Public Policy at Spotify. "You know there's something wrong when Apple makes more off a Spotify subscription than it does off an Apple Music subscription and doesn't share any of that with the music industry. They want to have their cake and eat everyone else's too."

In her speech today, Warren knocked Google for "its dominant search engine to harm rivals of its Google Plus user review feature," while claiming Amazon "uses its position as the dominant bookseller to steer consumers to books published by Amazon to the detriment of other publishers."

The senator from Massachusetts is famously opposed to the consolidation of power by the few, hence her appearance at today's conference (incidentally, the meeting was titled "America's Monopoly Problem What Should the Next President Do About It?"). Warren's zeal for healthy competition extends far beyond the technology sector, though recent media coverage has focused on her interest in Silicon Valley's elite.
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Comments

  • Reply 1 of 87
    Fauxcahontus can rant all she wants, the reality is she's an unsuccessful hack with no concept of the reality of business. Which explains why she was in academia and moved to government. 
    apple ][soldbyrolandgregg thurmanjbdragonmwhiteredraider11magman1979brucemcicoco3h2p
  • Reply 2 of 87
    snovasnova Posts: 1,281member
    this maybe true, but is it really unique to Apple?
    repressthis
  • Reply 3 of 87
    There is always a level of barrier to entry.
    To compete, you need to overcome that barrier.

    It's difficult to build successful platforms, so nobody is going to lay down the red carpet for you to just walk-in and compete.
    edited June 2016 P-DogNCbaconstangrepressthislollivergregg thurmanEsquireCatscintosmagman1979bestkeptsecreturahara
  • Reply 4 of 87
    staticx57staticx57 Posts: 394member
    snova said:
    this maybe true, but is it really unique to Apple?
    I am guessing you didnt read the first line of the article.
    revenantrepressthismacky the mackymagman1979uraharah2pcornchip
  • Reply 5 of 87
    Boo fucking boo. It's Apples store and they can run it how they like. Walmart doesn't have to allow anyone sell their products in their store so why should Apple?
    baconstangfoadlollivergregg thurmanjbdragonradarthekatjkichlinelatifbpcintosmagman1979
  • Reply 6 of 87
    Boo fucking boo. It's Apples store and they can run it how they like. Walmart doesn't have to allow anyone sell their products in their store so why should Apple?
    Because if the government regulates it, it opens up new opportunities for graft. That's the goal of people like Warren. 
    repressthisgregg thurmanSpamSandwichbrucemch2pcullycornchip
  • Reply 7 of 87
    DeelronDeelron Posts: 24member
    "They want to have their cake and eat everyone else's too."

    Says the people who haven't ever had cake. If you can't make money off of 10 million users paying $10 a month, maybe, just maybe the problem isn't the stores, it's that nobody without a piece in hardware makes anything streaming music, even with the meager artist royalties. Wonder why that is.
    calistompybaconstangrepressthislollivergregg thurmanjbdragonEsquireCatsmagman1979cornchip
  • Reply 8 of 87
    I'm all-in with Apple and proudly so, but the guy from Spotify has a very valid point. How can they make a straight profit from Spotify's monthly subscription, and far exceed their own services' profit? In and of itself that fact leads to shutting out the competition because pricing can't be competitive. 

    Then again, Apple created the App Store and should have full control over it and it's pricing if they want to, but when you become a platform allowing 3rd parties to participate and sell, that should have limitations in terms of competition. As it stands today, they're not breaking any laws and deserve to reap whatever income they can, but morally they can't be opposed to Prince's statement in my opinion. 
    welshdogbaconstangrepressthispentaeh2p
  • Reply 9 of 87
    revenantrevenant Posts: 460member
    how is this unfair competition? wall street and other blogs/news sites continuously tell us how much apple is doomed/sucks/no innovation. clearly apple is still trying to overcome the barriers put in place by wall street and gang.
    calibaconstangrepressthisfoadlolliverai46teejay2012gregg thurmanjbdragonericthehalfbee
  • Reply 10 of 87
    ...how do streaming services such as Spotify & Apple compensation compare directly to 'smaller guys & newer guys' artists...?
    calibaconstangrepressthislollivergregg thurman
  • Reply 11 of 87
    Isn't this the psycho that was trumping up Hilary?

    sheesh. Does she ever speak with actual facts? Or is she only capable of making stuff up to fuel. Mob mentality, taking advantage of easily confused issues. 


    So in her opinion, a company that WAS "the little guy" played by the rules and created an ecosystem from nothing that people would buy into and provided satisfaction and security to consumers... Is now somehow "wrong."

    good going lady. Now please GET going. And don't come back. 
    edited June 2016 calimwhiteredraider11magman1979h2pcullyindyfx
  • Reply 12 of 87
    apple ][apple ][ Posts: 8,360member
    Isn't this the psycho that was trumping up Hilary?

    sheesh. 
    Yep, the fake Indian. They'll make a great team. :#
    mwhiteh2pcullyindyfx
  • Reply 13 of 87
    calicali Posts: 3,495member
    Apple WORKED for their "monopoly" and deserve every penny plus MORE for what they've created. The App Store alone has generated BILLIONS for the little guys who couldn't make a buck out of their passion because they weren't a corporation.
    baconstanglolliverBACgregg thurmanmwhiteroundaboutnowmagman1979uraharabrucemcpalomine
  • Reply 14 of 87
    blastdoorblastdoor Posts: 1,814member
    The standards of what's acceptable behavior depends on marketshare. With 0% marketshare, Blastdoor Inc can require that all third parties pay 100% of their profits to Blastdoor Inc on sales through the Blastdoor App Store for BlastdoorOS devices. That's acceptable because, given its 0% marketshare, Blastdoor Inc has zero coercive power over anybody. 

    The problem with antitrust arguments against Apple is that Apple doesn't have all that large of a share of most markets. The iPhone makes up less than 20% of global smartphone sales, and about 50% in the US. That's better than Blastdoor Inc, but t's not anywhere near a monopoly -- certainly not near the share of the market that Microsoft had with Windows when the DOJ went after them. 


    gregg thurmanlostkiwih2pcornchipindyfxDeelron
  • Reply 15 of 87
    kevin keekevin kee Posts: 829member
    hface119 said:
    I'm all-in with Apple and proudly so, but the guy from Spotify has a very valid point.
    He might have a valid point, but he conveniently forgotten if he wanted to attract more people (especially those who own iDevice) to use Spotify - he had to use Apple AppStore platform (including its policy). Otherwise there is no lock to chain him up, he is free to exit from AppStore and don't have to pay Apple. It's a fair trade.

    Also, it's hardly a 'monopoly' when iDevice only counts 20% of marketshare. On the other hand, Android which counts close to 80% of marketshare...
    edited June 2016 stompygregg thurmanmwhitelostkiwiuraharamessagepad2100indyfxDeelron
  • Reply 16 of 87
    sflocalsflocal Posts: 4,094member
    kevin kee said:
    hface119 said:
    I'm all-in with Apple and proudly so, but the guy from Spotify has a very valid point.
    He might have a valid point, but he conveniently forgotten if he wanted to attract more people (especially those who own iDevice) to use Spotify - he had to use Apple AppStore platform (including its policy). Otherwise there is no lock to chain him up, he is free to exit from AppStore and don't have to pay Apple. It's a fair trade.

    Also, it's hardly a 'monopoly' when iDevice only counts 20% of marketshare. On the other hand, Android which counts close to 80% of marketshare...
    Exactly.  I guess this is Spotify's way of whining "We're not making any money off of Android users, so let's bitch about having to pay more to access Apple users!"

    It's just unbelievable that a competitor has the gall to make any vile attempt to force Apple to give preferential access to Apple's own customers.

    Apple develops the hardware (iPhone), runs and maintains the infrastructure, payments, and logistics so that asshats like Spotify doesn't have to do it, and they Spotify complains that the 30% fee is too much.  Spotify is more than welcome to go out and develop their own fucking ecosystem and phone if they want.
    gregg thurmanfreerangedsdh2pindyfx
  • Reply 17 of 87
    foadfoad Posts: 697member
    Maybe, just maybe, there's no money in streaming music. Apple is probably doing solely as a value add to their platform. They also pay more to artists. Maybe that's why they get exclusives. 


    h2pindyfx
  • Reply 18 of 87
    felixerfelixer Posts: 33member
    Jeeez. I USED to like her. This is America. Either you are good and you succeed, or you aren't and you keep working. I'm so sick of people attacking Apple for being the best. They should be praised. 
    BACgregg thurmanmagman1979icoco3h2ppotatoleeksoupmessagepad2100indyfx
  • Reply 19 of 87
    crowleycrowley Posts: 5,414member
    I like Apples hardware, I like apples software and I like Apple services, but it is a little annoying that they're all prejudiced towards each other, both in price and functionality, whereby Apple's software gets preferential treatment on the hardware, and Apples services get a preferential pricing scheme.  It'd be easier to praise Apples individual products if they operated on a more even play field; even when that field is an Apple platform.

    I'm not sure that I think Apple shouldn't be allowed to do such things on their own platforms and stores, but that doesn't mean I have to like it.
  • Reply 20 of 87
    If there is a God in heaven, she will be picked as Grandma's vice president. Nothing could be more repugnant than these shrill Blues Sisters out on the campaign trail together. Neither of them has ever created anything except hysteria. Yet they are out criticizing the the people who create jobs and opportunity. What a wretched creature she is!!
    gregg thurmanmagman1979h2ppotatoleeksoupstevehcullyindyfx
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