actually the rules apply to everyone monopoly or otherwise, anti-competitive rules are not applied/enforced when there is a dominant market position only.
In some cases a monopoly is needed or wanted, like in credit card cases you don't want a million credit card types that all work in different subsections. In such cases regulations are to prevent such companies from having too much influence and bottlenecking everything else with high prices or forcing their own other products. EU already did this with credit cards.
Or you force and open standard and now you have different companies using the same system but with competing pricing.
If something "has to be a monopoly", there is a good case to be made that you are talking about a core public infrastructure piece which shouldn't be under control of a singular private entity.
Credit cards need to have personal connections with businesses since it is about mutual trust. A business doesn't want to deal with a shady credit card and credit card providers doesn't want to deal with shady businesses.
So you are talking about a technical solution to a social issue, that wont solve it.
Online pay providers show that it is very well possible. There are tons of payment providers which are widely supported. The only difference is that some of them have a physical presence while others do not.
With a common standard, the available of card-based payment providers would indeed increase. In europe, you often can't pay with Diner's Club or American Express. If they would not all have proprietary systems and were compatible, then their adoption would in-fact increase.
Naturally, not every grandmother and their dog should be able to use this standard but there must be a well-respected authority behind it. Taken to the extreme and we couldn't trust anybody we couldn't have root certificates.
Mutual trust doesn't scale. You really think that either Visa or Mastercard has a personal connection to every grocery store that accepts credit card payments?
If you're from the USA maybe you're used to effectively a single payment system (or a small number that all use the same card reader)
Many countries have far more payment systems. For example, Japan, 7/11 takes Line Pay, PayPay, Merupay, au Pay, R Pay, d払い, Smart Code, J-Coin, Bank Pay, QOU-Pay, WeChat Pay, Alipay, Nanco, R Edy, iD, QUICPay, 9 different train cards, Mastercard, Visa, American Express, JBC.
Some of them you insert the card, some use NFC, some you scan a QR Code, some you show a QR code.
Some have had big discounts or "points", probably to try to get market share. The discounts can go either way. Some are for the consumer (get 5% cash back for example). Others are for the merchant (zero fees for N months, etc...)
That’s arguably not a great example, since there are both more than one international credit/debit card networks, and even these have been subject to constant regulatory scrutiny.
There was a time when common wisdom was that telephone companies and many other infrastructure businesses needed to “obviously” be monopolies as well (sometimes state-owned, sometimes private, which is arguably the worst of both worlds). I really wouldn’t want to go back to that.
> That’s arguably not a great example, since there are both more than one international credit/debit card networks, and even these have been subject to constant regulatory scrutiny.
The two cards are essentially interchangeable so it is a duopoly. And the fact that they are subject to constant regulatory scrutiny without adding laws to force new entrants is why it is such a good example, it shows how well regulations can work without adding competition. To me in Europe credit cards works really great with low fees and no fuzz, I don't think that anything needs to be done about that more than is already done.
To card issuing banks, absolutely not. Visa and Mastercard compete for their business.
To merchants, yes, since they can't reasonably only accept one but not the other, as that would turn away a large fraction of their customer base. This is why most regulatory action happens here.
> subject to constant regulatory scrutiny without adding laws to force new entrants
There are absolutely measures taken to encourage new market entrants or at least more competition among the existing ones. (Whether they are effective is a different question.)
As one example, in the US, every debit card issuer is obliged to add at least one other brand/network to their cards, so that merchants do in fact have some routing choice. In Europe, some countries also have a domestic competing debit scheme, such as CB in France, Girocard in Germany etc.
> I don't think that anything needs to be done about that more than is already done.
I think you underestimate how unstable the current equilibrium is. The interchange cap regulation is relatively new, and I doubt that the networks will fail to come up with other ways to grow their market share and/or revenue that will, at some point, require further regulatory scrutiny.
Not sure I understand, what has the EU done to encourage a credit card monopoly? That there's basically a world wide Visa/MC duopoly isn't something the EU has actively encouraged as far as I know, only regulated as you mentioned.
For banking transfers there's SEPA so assuming a similar system could be set up for credit cards.
In that case it should be owned/regulated by the govts. In India's UPI has multiple banks talk to multiple consumer and vendor apps in one ecosystem standardized by govt agency. and it is damn good compared to other systems.
The DMA very much does not apply to everybody and was revised and tailored to exclude EU companies, by making sure the definition of “platform” includes the Big Tech firms + TikTok while excluding Spotify and Booking.
The job of the EU is protect and benefit the EU, not American companies. The DMA is not a “general” regulation like the GDPR that applies to all, this is a tailored approach to help EU companies.
Maybe not as much in the EU, but in the US it's completely insane:
"Stay in our ecosystem or else your friends/family will stop including you in group chats, stop sharing pictures with you, stop sharing video moments with you"
Apple leverages your personal social connections against you in the US...and by and large people don't seem to know or really care.
This was similar when the Bell Telephone company was running things, but at some point the regulator said no and other telephone operators were allowed on the same network.
> in open market profits will go to zero as competition increases
As they should. Innovators should be able to collect a profit for their hardwork. A decade later when your company gets captured by MBA grads it's not a great thing for the consumer or the economy as a whole if they just sit there and collect rent while lobbying for regulatory capture to keep any new talent from being able to do better than them.
And who will win? Those "smart people"(I hate this word, being nefarious is not smart, and stop gaslighting us by humanizing an evil multi trillion corporation doing illegal things, as "people") creating their own market monopoly, or the regulatory bodies of large governments that can regulate those monopolies in their regions?
History tells us that the institutions with laws, guns, judges and a monopoly on violence rules over "smart people" who just make phones.
Apple's only retaliation is making life shit for EU users or pulling out of the EU market which they won't because that would leave a China style vacuum that Google or a local EU competitor will take after a period of painfull transition for the EU consumers.
The EU consumers can live without iPhones. Can Apple's shareholders live without Eu's profits?
That's quite a large loss. Esp. given that there's another option - stay on the EU market while conforming to its rules. That will lower the profits, but not by that much.
Losing Europe as a market would have larger consequences, though. Software produced in EU would have worse support on Apple, people even in US having connections with Europeans would start installing alternative messengers etc. Apple's strength is in its network effect, cutting out a major part of it would be disastrous.
Americans already install alternative messengers on Apple and always have. That's not a real risk. I work in Europe and the people I know commonly switch between WhatsApp, iMessage, and Signal. I still use the Apple messenger by default because it is a noticeably superior product to the other two.
Similarly, my experience is that software produced in the EU commonly has worse support on Apple, including at companies I worked for. Again, that's already the reality. This fact was sometimes raised as a reason the apps had difficulty getting traction in iPhone heavy markets like the US.
There are reasons for Apple to stay in Europe but these aren't the reasons. I've commonly observed that the iPhone is more of a status symbol in Europe than in the US (where it is usually just the phone most people buy by default), which creates different market dynamics. In the US good interoperability with other iPhones is more important because that is a primary reason people buy them.
>Americans already install alternative messengers on Apple and always have.
Americans in Europe like you, or Americans in the US? Because for the latter, the statists would disagree, as in most use iPhones and just default to iMessage.
According to Apple's CFO [1] it's more like 7%, at least for the app-store, but it's hard to see how that wouldn't correlate to overall profits just as it does elsewhere. The regions are ... creatively named.
The EU is a subset of “Europe in that report. Pretty sure Gruber also mentioned that the Middle East is also lumped in there as well for some reason.
So yeah, the EU is bound to be a big number but it isn’t 25%. The biggest economies in the EU are Germany, France, Italy, Netherlands, Belgium? Big countries outside of it but included in Apple’s “Europe” catagory include the nordics, UK, Switzerland, Turkey, UAE, Saudi Arabia, Kuwait and probably something else.
Even if the EU makes up half of what Apple calls “Europe.” A fine of 10% of worldwide revenues is way beyond what the EU contributes to the bottom line. There’s no way Apple wants to take the nuclear option but if the EU threatens them with big enough fines they might think about it.
Most people in Europe use Whatsapp or FB Messenger, so they don't need Facetime or Apple Messages - major selling points of the Apple ecosystem. Alongside that, only 6% of people in the EU use macs, which further shows how Apple's ecosystem does not have a solid foothold in the EU.
Governments have a shot at this fortunately. But it seems that some US people have such an ingrained anti-government that they reject anything, even if it helps.
This is forum with a lot of top1% earners who can afford to pay Apple premium. And entrepreneurs who only dream to build the next apple and be able to abuse market power the same way.
Government regulation are kind a opposite side of that coin.
The CEO has to answer to shareholders when it comes to keeping his job and to legislators when it comes to abiding the regulations in every market. It's a tough act to follow if you try to maximize shareholder returns while also trying to stay out of prison.
I never said people aren't human, I said apple aren't human they're a corporation.
And people who knowingly leverage their gigantic corporation to make life worse for others in the name of shareholder profit can and should be dehumanized. There nothing humane in hurting others for greed.
Ship of Theseus. If you replace every single human at Apple with someone different, it's still Apple. Apple is, at this point, a separate entity, under control by a given group of humans at a given time, but that can change.
The problem is considering "Apple" itself a person, as corporate personhood does. Thinking of companies, even in limited contexts, as a "person" allows the individuals actually making decisions to be largely immune from liability on a personal level. Maybe that should change.
Technically a person is just a bunch of cells, but those cells are interchangable, replaceable (indeed few last more than a couple of decades), and if you lose an individual cell nothing happens to the person, but the cell can’t function.
we don’t say the cells make decisions, we say people do. With a corporation it’s the corporation that makes the decisions, not the individual cells.
Agreed, there's definitely the emergence principle at work when looking at how groups of people function.
The population of a city or a nation is similarly greater than the sum of its parts, and there is an emergent property in both cases. Same as an ant colony.
2 things though.
The constituant parts of a corporation are human, unlike an ant colony. So in that sense they are human, and ant colonies are ant.
Regarding ourselves, we absolutely are an assembly of cells, it wouldn't be wrong to define us as such, although not terribly convenient. But interchangeable the cells are not, well not like a person to a corporation.
A cell can't move from one person to another, if it somehow disagreed with a decision of the central nervous system.
The human brain is made up of billions of cells, and decisions of the brain are heavily dictated by the digestive system and various hormones.
A corporate board is at the most, what, maybe a few dozen people? There isn't the same level of responsibility of each component.
Finally, if the entire corporation decides as one entity, how to punish for wrongdoing?
Should every component of the corporation be put in jail if the corporation kills people (looking at you Boeing), or just the humans at the top that made those decisions?
Another way of looking at it:
Is the entirety of the Palestinian population responsible for the decisions of the dozens of humans that are the Hamas leadership?
The decision makers still have agency, but structures exist to prevent those who would make un-profitable decisions from reaching the top of the corporation in the first place. Once they’re there, their choices are constrained somewhat and (with nuances) profitable decisions are incentivized over others. The consequence is that, while individuals possess agency, we can also observe that the average individual’s behavior is predictable and in service of the corporate machine in aggregate. You can punish the ghoulish person who decided, along with a few others, to dump toxic waste into the river, while still recognizing that their actions were an inevitable result of the incentives we created for them. The most productive thing, of course, would be to change the incentives, but baby steps.
Looking at a corporation as a single entity from the outside it seems more like some sociopathic, mildly superhuman ai than a group of people. Of course it’s composed of people, but is that really the most useful frame to view it through? It’s nothing like a book club.
Yes - they have more legs. But what they are not is a homogenised mass, all as equally guilty or innocent of issues as the other. If 3 executives do something bad, those 3 executives are to blame. And not some nothing-to-do-with-people corporation.
I don’t see the future, but argument for Apple could go like this:
- it is Apple vs EU
- US gov has guns and influence and various levers
- US gov will definitely protect Apple from guns of EU (so regulator with guns is a bit mute point)
- Apple is important to americans (I think they feel it’s their symbol or something), so officials in US gov might think it’s good opportunity to grab some political points.
- US gov might act to help out Apple in this dispute (Nothing like a war, but some slight nod or handshake; maybe via diplomatic backwater; maybe in exchange for something)
Though most probably apple will give “something” even if minor change in the rules, at least just so EU would not loose face, to keep relationship friendly.
(But it will be move in the right direction)
There is a deep misunderstanding here of US politics and foreign policy.
The US might act in various ways to protect American manufacturers, or oil industry, or other industries that are responsible for a lot of jobs in the US or are a strategic resource in some other way. See the 100% tax import for Chinese EVs. The US government doesn't care about Apple. Apple's economic impact is basically irrelevant for the US, because it doesn't provide a noteworthy number of jobs or any significant supply chain within the US. Apple's use as a strategic resource is completely irrelevant based on their antagonistic behavior towards the US government and they've shown themselves to be as eager to comply with Chinese laws as they are to flout US government policies.
I'd maybe see the US do something to protect Microsoft, with its deep ties to the military industrial complex, or Intel, which has both these ties and is clearly a strategic resource because of the advanced chips it provides, but really only if there were an existential threat that would also prevent Microsoft or Intel from performing their necessary roles in the US economy, the military and in US foreign policy.
But to suggest that US guns are in any way relevant, or that the US would bother trying to protect Apple, is frankly absurd.
The EU has smacked down Meta, Google and Microsoft already for things they felt were anti-competitive. The US didn't give a shit. Why would it be any different here?
The billions in agricultural subsidies, strict regulations, and non-tariff barriers that make it difficult for non-EU companies to compete suggest otherwise to me.
Parent didn’t say when smart people figured it out.
This is also why Nintendo (when they moved into video games) set up their business model as platform-holder, not just game developer. And their own games are primarily there to seed the platform.
Rather, the goal was to lower ("subsidise") the purchase price (initial barrier) of the NES/SNES and then recoup it on licenses for cartridges. It makes each purchase of a console cheaper. It's the rational way to maximize revenue.
I'm not sure how you're framing that as a subsidy. It's a killer app that gets people over the threshold to purchase the platform (console). And then once the install base is established, everyone else wants to make their own games and has to pay you (a lot) for the privilege.
Developing first-party games costs more money, to both Nintendo and consumers, so it's the opposite of a subsidy. But they're compelling enough, they clear the purchase threshold and establish the platform on which the rest of the business is built.
Parent commenter meant subsidizing the actual hardware costs. The same is true of pretty much every other console, they can also sell the hardware cheaper for this reason
Nintendo is a funny example here though, since they are notably the one major player which actually makes a profit on their hardware sales directly. They do also make a cut on the other games still, though.
Solution: create your own alternative to open market - be the market (and write rules for it)
Apple will do a lot to keep this cash cow at peak performance.