[Silhouette]

Exactly. The typical problem with these huge, two-sided online marketplaces is that they are the big guy in any "negotiation" of terms with both sides of the market, which means they can effectively dictate the terms. And yet, they are just an intermediary. The only value they contribute is connecting the other parties and facilitating the transaction. In other words, they are the least important player, yet often they are taking a huge cut that inevitably pushes prices up for buyers and profits down for sellers.

I suspect the best way to bust those marketplaces and reduce them to making profits commensurate with the true value they offer is to prohibit them from handling any financial transactions between the two parties at all. Instead, let them simply get paid by the sellers on some agreed terms. If they offer enough value to justify the rate they ask, the sellers will pay it. If they are too greedy, the sellers will go somewhere else. And if they have a monopoly or monopsony position, they are subject to the same competition law as any other business buying or selling anything else in an exclusive or dominant position.

[simondotau]

Whatever your stance is on Apple's control over apps on iOS, it's a little bit beyond the pale to claim that Apple does nothing other than connect parties and facilitate the transaction.

Apple literally made the town in which their marketplace resides. They attracted residents to their town from the goodwill of their brand name, through the creation of a desirable product, and through substantial investments of marketing. People are continually attracted to this town because the crime rate is low and the city council's ordinances are suitable for the vast majority.

Apple literally built all of the existing buildings, provided anyone who wanted to participate in the economy with a garage full of tools, provided free and near-free training to anyone who wants it, and supplied people (again, for free) many of the basic raw materials which people used to build products.

Apple literally built the marketplace itself. They did an imperfect but not terrible job at minimising the number of outright hucksters. They made it so financial transactions were perceived as secure transactions[0], and that merchants' customers felt confident opening their wallets more often than in the adjacent town.

[0] This is more important than you remember. Ten years ago the concept of trusting your credit card through an app on your phone was new. By making the system highly trustworthy from the get-go, people's trust was rapidly won and rarely shaken.

[Silhouette]

Even if that is all true, having built the town and then prohibiting anyone else from setting up a marketplace is exploiting one monopoly you hold to benefit another, which is a big no-no in terms of economics and competition law. In your analogy, why are the townspeople better off because the town bans anyone else from providing shopping facilities for them?

[simondotau]

You assert that the town and the marketplace are two separate monopolies. I disagree and assert that they're a single entity, because they are not separable. Neither could have been created without the other. And their cumulative success is (in many respects) dependent on them being intertwined.

But even if you do insist on separating them, you don't get to arbitrarily bisect them wherever you want to suit your argument. The "retail" App Store is only the surface layer of the iOS app ecosystem which Apple has developed, it's certainly not the totality of it. There's the toolchain, APIs, documentation, training resources and many other things besides, which are all necessary parts to that marketplace's existence.

You might argue that Apple chose to give away their developer tools rather than license their use with a revenue share arrangement (like Epic does with Unreal Engine). You might argue that Apple charges for their tools with the $99 annual developer fee. I disagree that these are relevant. How Apple chooses to monetise their own work is up to them. For example, Apple could have instead defined their 30% revenue share requirement as a license condition for the use of their tools and libraries. The outcome for consumers and developers would be largely identical, but the "store monopoly" argument would make a lot less sense.

Even Epic themselves understand that developer ecosystems are valuable and it's fair for a percentage of top-line profit to go to them regardless how the app is sold or how payments work.

More broadly I must admit some occasional frustration by people who insist Apple must change, as this insistence is all too often paired with a somewhat arrogant paternalism, that they know better than I do what I should want. "Free market" is certainly the simplest argument to side with and the easiest one to wax lyrical about, but that doesn't automatically make it the best one.

I'm not going to spend too much time explaining why I think the iOS ecosystem would be worse if "free markets" were forced upon it, because unfortunately Hacker News debates on this topic generally see more people throwing down-votes rather than engaging with the debate. But fundamentally I see the difference of opinion stemming from whether you see the smartphone as a computing platform or an appliance bundled with systems administration services from the vendor. I think of my smartphone as an appliance, despite being a software developer by trade. But I'm glad that the market includes many brands of Android phone so that everyone who cares can have a choice.

[Silhouette]

You are arguing that the platform and the app marketplace are inseparable, but many other platforms for personal computing have not had such a store yet have been popular with both users and developers. They provided tools and documentation for developers, often for free, too. Plenty more have had multiple marketplace-like sources for new software, not necessarily provided by the same organisation that built the platform itself. From Windows to Linux distros and from Steam to the plug-in marketplaces for many large applications, there is no shortage of counter-examples to your position here.

[simondotau]

No, I am only arguing they are inseparable with respect to questions of antitrust. Obviously there's no technical impediment to iOS becoming a complete free-for-all where you can download and run any binary with root privileges using an innocuous shell script command piped from wget.

The question of what's been done elsewhere isn't relevant, because there are many elsewheres, each with their own origin stories. Most of them look more like iOS than macOS—the personal computer marketplace is something of an outlier when it comes to software distribution.

[Silhouette]

OK, but we still don't seem to have a solid argument for why Apple should be allowed, for competition law purposes, to treat different aspects of its business such as making physical devices, offering a marketplace for users of those devices to obtain software from third parties, and providing payment processing services, as inseparable. As we've been discussing and seem to agree, there is no technical reason those distinct activities couldn't be performed independently, and there are numerous examples of similar arrangements on other platforms where they are. Isn't this situation the epitome of what antitrust rules are supposed to prevent?