The popular argument I’ve heard is that they have a vertical integration model which has been deemed monopolistic within other industries in the past.
The common example that would have been used is the old Hollywood studio system, when studios not only owned their lots where the movies were made, but they handled all of the distribution, owned most of the theaters where the films would premiere, owned their own film formats, and locked their big-name stars into contracts which had strict non-compete agreements.
It wasn’t impossible to be an independent theater owner and have the ability to choose what films you wanted to show, but it was very hard and required accepting a number of conditions:
You will pay more for movies than the studio-owned theaters effectively do, which means your tickets need to be more expensive to pay your costs.
You are subjected to “block booking”, where you can’t show only popular movies, you are also forced to buy a studio’s less popular films as bundles and give them appropriate screen time or the studios won’t sell.
You also need to buy a studio’s proprietary projection equipment, because it is made intentionally incompatible with the formats of other studios.
The studio system was eventually deemed monopolistic by the US Supreme Court in their ruling US v. Paramount, and that allowed independent theaters to thrive and for artists to switch to contract work without the strict non-compete agreements. But I have to say “the common example that would have been used,” because the conservative-stacked Supreme Court revisited their ruling in US v. Paramount that banned the vertical integration model in Hollywood and decided it was no longer needed, so studios are once again free to resume those old practices if they wish.
So in the case of Apple, the monopoly criticism applies to their vertical integration model which draws some parallels to the old Hollywood studio system that was once deemed monopolistic:
Apple designs and produces their own devices.
Apple produces their own operating systems, which are exclusive to those devices.
Apple produces their own suite of core apps, which are given preferential treatment by their operating systems.
Apple develops their own technology standards, which are not available to third parties without additional licensing fees (e.g. the Lightning connector, up until the EU forced them to start adopting USB-C).
Apple hosts their own app store, which is the only app distribution method allowed on their mobile platforms.
Apple requires third-party apps to agree to their store’s terms to be published on the platform, which prohibits any pricing model in which Apple does not get a cut.
For third-party app developers, it means that even if you have your own revenue model beyond Apple’s involvement, you are not allowed to extend that to your iOS app without giving Apple their cut, which is why you see so many apps now just declaring that they are “for subscribers” without allowing you to subscribe in the app or giving instructions for where to subscribe. And it’s not possible to publish an app on iOS without going through Apple’s store and agreeing to their business model because Apple does not allow third-party app stores and heavily restricts sideloading.
Because Apple also gives preferential treatment to their own apps, it is hard to be “as good” as their own offerings, and there will always be a risk of Apple deciding to make some new category of app for a use case that third-parties currently satisfy but may get shut out of.
The popular argument I’ve heard is that they have a vertical integration model which has been deemed monopolistic within other industries in the past.
The common example that would have been used is the old Hollywood studio system, when studios not only owned their lots where the movies were made, but they handled all of the distribution, owned most of the theaters where the films would premiere, owned their own film formats, and locked their big-name stars into contracts which had strict non-compete agreements.
It wasn’t impossible to be an independent theater owner and have the ability to choose what films you wanted to show, but it was very hard and required accepting a number of conditions:
The studio system was eventually deemed monopolistic by the US Supreme Court in their ruling US v. Paramount, and that allowed independent theaters to thrive and for artists to switch to contract work without the strict non-compete agreements. But I have to say “the common example that would have been used,” because the conservative-stacked Supreme Court revisited their ruling in US v. Paramount that banned the vertical integration model in Hollywood and decided it was no longer needed, so studios are once again free to resume those old practices if they wish.
So in the case of Apple, the monopoly criticism applies to their vertical integration model which draws some parallels to the old Hollywood studio system that was once deemed monopolistic:
For third-party app developers, it means that even if you have your own revenue model beyond Apple’s involvement, you are not allowed to extend that to your iOS app without giving Apple their cut, which is why you see so many apps now just declaring that they are “for subscribers” without allowing you to subscribe in the app or giving instructions for where to subscribe. And it’s not possible to publish an app on iOS without going through Apple’s store and agreeing to their business model because Apple does not allow third-party app stores and heavily restricts sideloading.
Because Apple also gives preferential treatment to their own apps, it is hard to be “as good” as their own offerings, and there will always be a risk of Apple deciding to make some new category of app for a use case that third-parties currently satisfy but may get shut out of.