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Apple and Google must allow other in-app payment systems, Korean law declares

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Re: Apple and Google must allow other in-app payment systems, Korean law declares

#441

Post by fsckboy »

mikehearn wrote: post #404

I have a question about monopolies and market abuses. Apple released their phone in 2007, the App Store in 2008, and in-app payments in 2009. During that time their marketshare was fairly small, and it didn't start to really grow until they expanded availability to the Verizon network in 2011. Right at launch of the App Store, Apple announced its sales commission would be 30%. Then they extended that same fee to in-a…

abuse of monopoly power is a big area, there's no one answer, but you're asking good questions. It's not really going to help future companies though, because any company in a position to think about this problem has the type and quality of attorneys who already best know the answers.

In any case, though, that's not what's going on with this Korean law. Antitrust violations of existing law are generally determined by courts and or regulatory agencies, whereas this is a new law from a legislature signalling that they want to encourage a competitive marketplace in this manner. Of course, with lobbying and nationalism, it's quite possible that this law was guided by powerful Korean interests or nationalist parties who simply want to hobble foreign entities in favor of local companies: still not an example of antitrust, except possibly in the other direction.

in any case, in the US it's not monopoly that's against the law, it's that market power being used to abuse market participants or influence prices. And there is no clearcut answer, but there are "guidelines", for example if you control 70% of a market and your major competitor controls 25%, you have a good basis to say that you are not a monopoly. Notice that Microsoft invested to prop up Apple when Apple was on the ropes in the late 90's. That type of action shows how tricky and pernicious these regulations can be, Microsoft gets the excuse "we have a major competitor" and also benefits from the success of the competitor.

But that's the market share part of the equation. The additional aspects are "can it be shown that the price of the good is being manipulated upward?" So, Microsoft offering big discounts to PC manufacturers to get them to exclusively offer MS OSes on their platform: are those discounts abuse of the market?

I'm not a particular expert on this, there are many places to quibble with what I've said, I'm just trying to offer the flavor of what I thought when I read your questions.

Oh, at what point did Apple cross the line? Has Apple even crossed the line now? Is not really the question. By the time enforcement actions are taken, companies are generally well over the line. The real question is "how much can we abuse our market power and get away with it before the clamor to regulate us gets too strong for politicians to ignore? And what is the temperament of the administration in office?"

Re: Apple and Google must allow other in-app payment systems, Korean law declares

#442

Post by hutzlibu »

simonh wrote: post #435
yholio wrote: post #423

Earlier quoted context omitted.

You are framing this as if there is a magical "growth curve" that must take you from an inovative startup to a 800 pound gorilla that has a complete chokehold over the market. No, if regulators do their job, nobody gets to ask that question because there is continuous competition. Getting to that monopoly or oligopoly requires sustained effort from would be monopolists, it's a strategy they have been executing for mo…

Not at all, there was nothing inevitable about Apple's success, many analysts, pundits and their competitors have been adamant Apple would fail for the first decade or so of the iPhone. After that these claims started looking a bit thin. You're presuming that market abuse has occurred and that market abuse is the only way to get popular, but I don't see that's a given. Maybe people simply genuinely like iPhones just…

"What changed to make them a market abuser and when did it happen, as you allege? That's the question OP is asking. "

There is no clear line or answer, as the topic is incredibly complex.

Electronic devices are not just gadgets anymore, but tools to participate in modern life. We never had that situation before.

So by traditional meassures like absolute market share, apple might not be a monopolist, but because of the massive lock in and market dominance (of the luxory segment), with all its implications, I surely would say they abuse their power since a long time. But I also do not believe in regulations as the magic bullet to really solve it, exactly because the lines are too blurry.

Re: Apple and Google must allow other in-app payment systems, Korean law declares

#443

Post by kyboren »

jaywalk wrote: post #183
Hnrobert42 wrote: post #152

Earlier quoted context omitted.

Why do Gooogle’s peers charge Google less money?

Peering is free by definition.

There is no exchange of value between the parties, but there is definitely a cost to peering. You need to physically get your data to the meet-me room, and that isn't free.

Re: Apple and Google must allow other in-app payment systems, Korean law declares

#444

Post by simonh »

bostik wrote: post #436
mikehearn wrote: post #404

I have a question about monopolies and market abuses. Apple released their phone in 2007, the App Store in 2008, and in-app payments in 2009. During that time their marketshare was fairly small, and it didn't start to really grow until they expanded availability to the Verizon network in 2011. Right at launch of the App Store, Apple announced its sales commission would be 30%. Then they extended that same fee to in-a…

30% was highway robbery from the start. Pure and simple. It was merely a less awful deal than most other indie commission models, with sites like Kongregate and their ilk demanding >80%. Against that kind of flaying and skinning, 30% was an improvement! I've said it before. A very good agent, who actually works for their client and arranges them with repeat lucrative contracts, gets 15%. App stores, as gatekeepers to…

>30% was highway robbery from the start.

That was not at all obvious to anyone in 2008. It's a pretty typical margin from the console industry, which was the main point of reference at the time. Apple spent several billion building the App Store infrastructure, the SDK and setting up the review and payments system and it took years for App Store revenue to catch up with the sunk investment and expenses. Also practically everyone in the industry at the time was saying Microsoft and Google would imminently wipe Apple out of the mobile market.

This is a tough one, I think 30% made perfect sense in 2008 but does seem steep now. Apple makes huge profits on the App Store, but it mostly seems to have happened by accident, their original strategy seems to have genuinely been to just break even and maybe make a modest margin, with the store mainly just being a competitive advantage. The huge success and profits have been a windfall.

However that all happened and we are where we are. I don't object to Apple's app store margins or IAP charges, it's their product, their rules.

I do think banning developers from informing users of how to get subscriptions and such outside the store is foolish. That's clear overreach. I see why they do it, otherwise subscription services can cut Apple out and free-ride, but they probably just have to take the hit.

Re: Apple and Google must allow other in-app payment systems, Korean law declares

#445

Post by jonny_eh »

pcr910303 wrote: post #103

It’s not usual for news on my country to be on top of HN. Very unexpected. I’m guessing though that the South Korean market is be significant enough for Apple and Google to not just pull out it’s business from South Korea and call it a day. I guess this is, in some kind, a victory against the huge companies. But… personally I do find sad that this would be detrimental to South Korean app UX. Stripe isn’t a thing here…

> home-grown web-based payment systems have… like super shitty UX

They now have a reason to make it better, since they can now actually compete with Apple Pay and Google Pay.

Re: Apple and Google must allow other in-app payment systems, Korean law declares

#446

Post by yyyk »

mikehearn wrote: post #404

I have a question about monopolies and market abuses. Apple released their phone in 2007, the App Store in 2008, and in-app payments in 2009. During that time their marketshare was fairly small, and it didn't start to really grow until they expanded availability to the Verizon network in 2011. Right at launch of the App Store, Apple announced its sales commission would be 30%. Then they extended that same fee to in-a…

>So in terms of the framing of "market abuse", at what point between the launch of these rules and now did Apple cross that threshold between free-market competitor who can legally control their own platform to monopolist abusing its power?

When Apple launched Apple Pay (in 2014, not that long ago), its App Store rules turned from dubious to outright market abuse by using one market where it had a strong position to infiltrate another very different market of payment processing (there are other issues, but this story is about payment processors).

By the way, 'monopoly' has little to do with it. It's about market power, monopoly is an nigh irrelevant term to the issue.

Re: Apple and Google must allow other in-app payment systems, Korean law declares

#447

Post by yyyk »

ilikehurdles wrote: post #329

As a consumer, I’m pretty sad about this. I don’t miss the days of having to go through 5 different user flows to cancel 5 different subscriptions. With iTunes, all of my purchases and subscriptions are in once place. Losing that sucks.

There's nothing stopping Apple from still managing subscriptions. The difference is an extra call to the payment processor, either done by the vendor or Apple.

Re: Apple and Google must allow other in-app payment systems, Korean law declares

#448

Post by threeseed »

saagarjha wrote: post #416
elefanten wrote: post #263

Earlier quoted context omitted.

It’s way less than 1% Waay less.

That's because Apple has waged war on these stores for over a decade. The fraction used to be much, much higher several years ago.

They've merely fixed the security holes in iOS that allowed these stores to exist.

Unless you're suggesting Apple ignore them which would be insane.

Re: Apple and Google must allow other in-app payment systems, Korean law declares

#449

Post by threeseed »

bloppe wrote: post #411

This is going in the wrong direction. Government shouldn't be imposing regulations on monopolistic app stores when competition can naturally break the monopolies and bring them in line with developer and consumer needs. Let there be multiple app stores, charging developers competitive fees and implementing competitive security and convenience features. Don't let the platform favor any particular app store, or raise b…

> See how long 30% fees and hostile policies last

And then see how the ecosystem degrades to the lowest common denominator and we re-enter the Windows 95 era.

Race to build malware apps, virus and malware checker apps to prevent the malware etc.

Re: Apple and Google must allow other in-app payment systems, Korean law declares

#450

Post by saagarjha »

threeseed wrote: post #448
saagarjha wrote: post #416

Earlier quoted context omitted.

That's because Apple has waged war on these stores for over a decade. The fraction used to be much, much higher several years ago.

They've merely fixed the security holes in iOS that allowed these stores to exist. Unless you're suggesting Apple ignore them which would be insane.

Perhaps the iOS security model is incorrect if it only allows Apple’s store to exist?
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