[otterley]

I think it's true as long as they're not pricing as a monopolist would. One could argue that Standard Oil and AT&T (pre-1980s Bell System, that is) made people's lives better, but the prices they exacted from their customers were too high.

On the other hand, the increasing importance of intellectual property to the American economy (vs. the manufacturing economy) -- and the Constitutionally-sanctioned monopolies that come with it -- suggest that perhaps even monopolistic pricing is no longer the concern it once was.

[jdsully]

That's a common misconception about Standard Oil [1]. In fact they were instrumental in lowering prices (albeit not 1:1 with their reduced production costs). John Rockefeller was a conflicted man in terms of ethics - but it was clear he felt a moral obligation to provide quality products at reasonable prices.

The "predatory" part was towards his competition. In areas where they operated he dumped product below cost. He also had the guaranteed best prices with the railroads ensuring his costs would always be dramatically lower than the competition. However even here there was a benevolence not seen in modern business. Before destroying his competition he always offered them a buyout at a favourable valuation.

[1] https://pdfs.semanticscholar.org/5a78/95f431660f4c41e2050614...

[otterley]

Claiming that a monopolist is the good guy because he eliminates his competition by lowering prices is like closing a great novel halfway through. It's what happens _after_ all the competition has been killed off that's interesting: it's difficult to resist the temptation of raising prices significantly once there's nobody left to compete with you.

[jdsully]

John Rockefeller was an old man by the time the antitrust suit came - the gouging phase never came with him at the helm. Further, his peak market share occurred long before. At the time of the anti trust he had 65% share, vs the 85% at Standard Oil's peak 30 years prior.

Its quite possible his successors might have followed the standard playbook. But Rockefeller himself is not an example of this consumer harming tactic. This is why his biggest critic was the daughter of another oil man, not a harmed consumer.

If you take anything away from the Rockefeller story it should be that the consumers need not be currently harmed for a successful prosecution. The standard and false "common knowledge" actually defangs the law quite a bit.

[opo]

>...The "predatory" part was towards his competition. In areas where they operated he dumped product below cost.

Actually from reading your link, I don't get that impression that Standard Oil dumped product below cost to put competitors out of business. As your link states:

>...The testimonies studied by McGee and summarized in this research show that the Standard Oil did not acquire or out-compete its rivals by using predatory pricing. There is no clearcut case suggesting the opposite. In fact, Standard Oil was able to beat its competition by charging lower prices to the general public because its own average cost was significantly lower than the rest.

>...While there still remain a number of other allegations to which the Supreme Court found Standard Oil guilty, that remains beyond the scope of this research. What it can be concluded thus far is that the Supreme Court should not have found Standard Oil guilty of using predatory pricing.

The link makes a lot of references to the John McGee paper on this subject. I think that paper can be found here:

http://www-personal.umich.edu/~twod/oil/NEW_SCHOOL_COURSE200...

[jdsully]

I don't fully agree with the linked thesis, but it was a convenient link to show the average picture and his affect on consumers. Rockefeller absolutely participated in predatory pricing within local markets. Of course if you only look at national average data you won't see this.

Rockefeller would likely have still won even in a fair fight just because of his economy of scale. But that wasn't enough for him, and he resorted to underhanded tactics like having his own subsidiaries engage in fake price wars between each other. The full ownership of those subsidiaries was intentionally obscured. In this day national average data may be sufficient to build a picture, but at that time national companies were very rare and competition was heavily regional. Note that this was only a net negative for his competitors, consumers benefited from the low prices and the predicted gouging never came after.

There is a common line of thought that because consumers weren't immediately harmed that Rockefeller should never have been tried. I don't agree with that logic - the end does not justify the means.

[bilbo0s]

Correct.

This is the issue with the tech giants. Under current law, you need to find actual anticompetitive practices. Some way that Apple harms able competitors. Like maybe something they do to force people to switch to Apple phones. (Note: I did not say "entice", I said "Force".) It's anti-competitive if people would be obliged to buy Apple phones. Or if Apple controlled some essential component of mobile phone hardware and jacked up the price on that component for anyone who wanted to make an Android phone.

It has to be something like that. Something Apple is doing, which is at once negatively affecting Apple's competition and entirely dependent on Apple's market position. That's what an anti-competitive practice is.

[basch]

Gating the app store, banning apps and then cloning their functionality could be construed as anti-competitive.

It's the way Apple, Amazon, and Facebook work now. Clone a product, add it to your ecosystem with enhanced proprietary integrations to your other services. Your competitors cant compete because they dont have access to the same api or the same paas. It really has nothing to do with product pricing or selling client side phones.

[bilbo0s]

Gating the app store is not anti-competitive, because it doesn't harm any other app store. In fact, it could be argued that it helps other app stores since it restricts the number of products available on Apple's store. In theory, and in practice, a consumer would have access to far more product on other app stores than they would have on Apple's App store. So the other app stores have the advantage there. That coupled with the fact that the other app stores also happen to have the dominant market share position...

well, you can kind of see where a supreme court justice might be a little skeptical.

Banning apps could be anti-competitive, if the app can in no way be made available through other app stores. That is to say, if you can run the app, without restriction, on an android phone, from an android app store, you're gonna have a hard time convincing a judge or jury that Apple is engaging in anti-competitive practices.

Firstly, it can be demonstrated in court that your app is available to a larger number of handsets than is Apple's app. (You'd not believe how devastating a download and install demonstration is to a lack of market access argument in open court.) Secondly, there is no mechanism by which Apple is able to use its own App store, to squash the presence of apps on other App stores. That's the sort of mechanism that you'd need under current law. (That mechanism doesn't even have to be Apple's App Store by the way. It could be any mechanism that Apple is using to keep apps off of other app stores. Provided that Apple is the only competitor able to use that mechanism.)

This is all a good example actually of why I've been a big proponent of changing the laws first, and then going after the tech firms. But it seems there is no stomach for that out there right now. Now if we had changed the laws, we might have had a more clear attack vector. We could have said that Apple, is acting as a market participant in its own marketplace. (Not currently illegal under current law.)

There are definitely ways being a market participant, in what is effectively your own market, can be anti-competitive. Problem is, the entire economy has been polluted with companies engaging in this practice over the past 40 or 50 years. I suspect this is part of the reason there is no stomach for cracking down on the practice with new laws. You'd have everyone from Costco and Walgreens, to AMC theaters and Clothing retailers trying to restructure themselves. (Think about it. I create some new wiz bang dog food in my garage that I think is the next big thing in pet food. I try to get it into Costco but they say no. Was that anti-competitive in support of their own brand of dog food? or did my dog food genuinely fall short of their quality guidelines? Or maybe they just made a retailing decision that they have too many dog foods on offer?)

So I can see where new laws might create kind of a mess in the short to medium term, but I really think they are needed right now.

[basch]

>Gating the app store is not anti-competitive, because it doesn't harm any other app store.

You make a shopping app. Apple makes a rule that says "your app type isnt allowed anymore" but then builds that banned app type itself. Its anti competitive towards shopping apps, not app stores.

Not allowing the user to set a default map app is anti competitive. No matter what map app I prefer, when I click an address it opens in Apple Maps (unless the app i clicked it in supports passing the address to a different map, which is circumventing the os protocol handlers.) The OS and App Store working in tangent to force users to use certain apps, or make the experience with competing apps infinitely more cumbersome, is absolutely anti-competitive.

Saying "you must integrate Sign in with Apple" or your app will be removed from the app store is Apple using its power to force adoption, at the expense of competing sign in solutions. Whether or not that is abuse, would be for a judge to decide.

[bilbo0s]

No no no.

You have to separate these two ideas, because I guarantee you lawyers and judges will. Is gating the anti-competitive practice? Absolutely not. There are a good many legitimate reasons for gating at a retail establishment. Quality, stock levels, etc etc etc. (In fact, you can even gate customers if you want. It's your right. Though it's rarely done except for issues like, "This guy is only dressed in a thong, he can't come in my store.")

What I said might be anti-competitive, and what you are talking about in your first two examples, is banning apps. If Apple bans a shopping app, is that anti-competitive? Again, the judges would look at a lot more than just the act itself, but I was saying that I believe the act itself to be anti-competitive. But it's completely legal under current law, and our economy has grown around the idea of marketplace owners participating in their own marketplaces. (Which is what I believe to be the root anti-competitive practice here. Again, a practice completely legal under current law.) Since so much of our economy has become dependent on this sort of practice, I'm suspecting that's the reason there is little political will to try to change it.

But yeah, Apple or Android, or even your shopping app telling me that I can't put my shopping app on your shopping app is anti-competitive in my eyes. (But probably not in the eyes of a judge or legal scholar if there are other reasons at play. For example, quality.)

I think the integrate with Apple Sign in thing is a bit of a stretch, but we could try it I suppose? I'm pretty sure that one wouldn't go anywhere though.

The best bet in my mind is the "marketplace owner participating in its own market" angle. But, again, even that one would be a more sure thing if we could change the laws so that even the act of doing that is a violation. Instead of what it is now, where if you have a good reason, ie-that manufacturer's dog food simply fell short of quality standards, then the courts have to defer to that judgement. Currently, courts can't force Walgreen's, for instance, to carry Bob's Bargain Basement Garlic Flavored Mouthwash simply because Walgreen's has its own mouthwash brand in Walgreen's own stores. Walgreen's has the right to say, "garlic flavored mouthwash sucks, and none of my customers will buy it."

[scarface74]

When I click on an address after searching Google in Safari, guess which app opens?

Guess what happens when I say “take me to X using Google Maps”?

[r00fus]

Is it a monopoly if all other options are ad-infested and privacy lacking?

If Apple is considered to have a monopoly on privacy-first devices and ecosystem, then let's first judge the system that allows the other (clearly undesirable) options to even exist.

Monopoly as a definitive term has criteria, and Apple doesn't meet those. By your same argument, any luxury brand "prices like a monopolist" and should be shunned.

[otterley]

I don't contend that Apple is a monopolist. We're discussing a hypothetical that assumes that they are, and whether it would be tolerated by law and society in today's climate as opposed to how monopolies were treated in previous generations.

[r00fus]

So you're comparing a hypothetical assertion to previous actual monopolies?

Sounds unproductive other than to lend credence to the (false) assertion.

[scarface74]

AT&T was a government sanctioned monopoly before they were broken up and their rates were regulated by the government.