Epic vs. Google: Google Loses

So every store is a monopoly? You are going to have to be a bit more rigorous than adding “-place” and call it a day.

This is why monopolies aren’t illegal per se, and it requires a couple of components for it to venture into unlawful territory.

One is that the monopoly is powerful enough that it can be exerted to pressure other parties in an anti-competitive way, and another is that that power is actively used. There are more, but for the sake of simplicity, these are the important ones in this debate.

Disallowing competitors to exist, in this case, means passively making it possible for competitors to exist.

The omission of an act (passive) will never be as substantial as an indicator as an active act to quash competition.

The App Store hasn’t changed much since its inception. Commission rates have decreased since its inception, making it harder to argue that Apple is squeezing developers now that it has more power.

The analogy with the thermostat hypothetical is accurate. If I create a new smart thermostat startup, I create a new market, the software distribution on the thermostats I manufacture.

This is analogous to the market definition people use to argue that Apple is violating antitrust laws. If it makes it easier to grasp what I'm saying, then instead, imagine I start manufacturing a new smartphone.

They launched the iPhone and, by doing so, created a new market, the iOS app distribution market.

The only difference is that the iOS app distribution market has grown exponentially, but the relevant legal realities are the same. The law currently doesn’t have a mechanism to say, “Ok, now you’ve grown, so now it’s illegal.”

Instead, it looks at abuse of power, where acts weigh heavier than the omission of acts.

The main difference between the Google and Apple’s case is that the former went out of its way to stifle competition by making demands and setting requirements (akin to Microsoft back in the day).

Some now say that the only reason this difference exists is because Apple doesn’t have to pressure others like Google did, but that’s not a difference to be shrugged away. It’s an essential difference.

It makes the difference between one giant who throws its weight around and another who never had to do that because the terms have been the same from the get-go (however favorable it was for them).

It is for that very reason that the Google case won’t have much bearing on the Apple case.

Apple decided where the boundary of competition lies by deciding to bundle their phone, their operating system, their app store, and their code signing policies into a package deal. A thicket of copyright laws forbid you from unbundling any combination of these. For example, I can't legally run iOS on my Pixel 8 Pro. It is legal to run Android on an iPhone, except the hardware boot ROM is designed to reject anything not signed by Apple, and Apple won't sign Android. You can circumvent that by taking advantage of security vulnerabilities in the boot ROM[0], and that's legal, too, but you can't legally tell anyone about those vulnerabilities because telling people how to break copy protection is a felony.

This same logic applies to application software. It's legal to jailbreak[1] your phone to install non-App-Store apps, but illegal to provide the jailbreak tool necessary to install those apps. If Epic had decided to release a jailbreak to install the Epic Games Store, instead of releasing a hotfix for third-party in-app billing and suing for antitrust, Tim Sweeney would have been thrown in jail for violating 17 USC 1201.

In copyright law, there's a concept of copyright misuse, which is what the courts call using copyright to break antitrust law. Copyright allows you monopoly control over your work, but you are not allowed to use that control to maintain an illegal monopoly that's outside of the copyright bargain. In other words, you don't get to opt-out of forms of competition you don't like. Congress decides those.

So no, "build your own phone and app store" is not enough. And letting Apple dictate the conduct of their competitors is effectively giving them antitrust immunity.

[0] Which are, BTW, once-in-a-decade. We've had a grand total of two bugs that can be used to install alternative operating systems on an iPhone.

[1] Jailbreak bugs aren't as scarce as boot ROM bugs, but they've been getting scarcer over time. This is not because Apple is doing a good security job, but because the NSA is hoarding all the good bugs for themselves.