How is Apple a monopoly, exactly?

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On the most recent Windows Weekly, Paul asserted Apple is a monopoly because they have a billion plus iOS devices. Aren’t there a lot more Android devices? Last I saw, Apple had about 20% or less market share globally, and under 50% in the US, which is their largest market.

Comments (64)

64 responses to “How is Apple a monopoly, exactly?”

  1. MikeGalos

    First off, I Am Not A Lawyer. That said, I was a part of the Windows extended team during the DOJ v Microsoft era so I got to live a lot of this stuff.


    Monopoly status is based on whether your actions can change a market in ways that lower competition in that market. As such they are based on defining a market.


    If the market is "Smartphones" then it's not that likely that Apple would have monopoly power, but if the market is defined as things like "Application stores for iOS devices" then Apple clearly has monopoly power. There are literally hundreds of possible markets that Apple participates in. In fact, some of them can even be contradictory such as in DOJ v Microsoft in some charges Apple was considered a significant competitor in the same market as Windows where in other charges Apple was not considered to even participate in that market.


    Now please note that being a monopoly is not a bad thing legally. It isn't a crime in any way and many, many manufacturers are monopolies in many markets.


    What being a monopoly means is that you have power to cause harm to the market to benefit yourself. Doing so is Abusing Monopoly Power. To avoid that all monopolies are subject to certain rules of fair play that they have to follow. Not following those rules is what gets you in court and fined or subject to court ordered changes to your business.


    • lvthunder

      In reply to MikeGalos:

      I think it's unfair to call "Application stores for iOS devices" a market though. The choice happens at the phone level.

      • AnOldAmigaUser

        In reply to lvthunder:

        If the market is applications for iOS devices, then it is a monopoly. Again, this is not necessarily a bad thing, unless the monopoly is used to lower competition, which, arguably, Apple has done, by favoring their own applications or removing ones that compete with them.

        The anti-virus firms are trying to use the same argument against Microsoft since it has a competing product.


      • wp7mango

        In reply to lvthunder:

        Well, it is a market, even if it happens to be at phone level. It's a market where companies compete for business, i.e. for users' money. And that market includes Apple itself competing for those same users.


        So, the question is whether Apple is abusing its power in this market to benefit itself.


        • lvthunder

          In reply to WP7Mango:

          So then Sony, XBox, Nintendo, and countless others have a monopoly as well. Apple selling apps in it's own app store is like a store brand selling it's products alongside the others. Everyone does it. Plus does Apple charge anything for any of their apps? The one I hear people complain about is Apple Music, but that's not even in the store. It's part of the OS itself.

          • MikeGalos

            In reply to lvthunder:

            Sure. There are monopolies in virtually every type of business. Once again, being a monopoly is NOT a crime or even a bad thing. It just means you have power that can be abused. If you don't abuse it, no problem.

          • coeus89

            In reply to lvthunder:

            The complaint is that apple charges other services 30% of their revenue every time a user pays. (i think it eventually reduces to around 10%) Apple does not have this artificial burden on their competing services. That is definitely unfair but the question is, is it illegal? Monopolies aren't illegal and the real question is, 1) does apple have a monopoly, and 2) are they abusing it?


            I don't think anyone will question that IF they have a Monopoly that they are abusing it. But they have such low market share in most places the answer will probably be no. In the US (and maybe Europe), it might be yes.


            As for Sony, Xbox, and Nintendo, those markets are considerable smaller. Also, those companies make purpose built devices and not a general purpose OS/Devices. I am not saying that they can't ever be prosecuted like what is happening to Apple but it is less likely.

            • lvthunder

              In reply to coeus89:

              I would say iOS is a purpose built device since it only runs on Apple devices.


              Also Apple doesn't have their apps that use services in the store at all. Apple keeps 30% from competitors, but keeps 100% for their services.

          • vernonlvincent

            In reply to lvthunder:

            I don't believe XBOX or Sony or Nintendo would count as an anti-competitive monopoly because you are not forced to buy games directly from the console manufacturers. You may buy games for XBOX, PlayStation, Switch, etc., from Best Buy, Target, WalMart, Amazon, Newegg, or even resale stores like GameStop or Disc Replay.


            Conversely, there is only one place to buy iOS (and now iPadOS) apps: Apple. They control both the platform and the distribution model for the apps on that platform.

            • lvthunder

              In reply to vernonlvincent:

              That's about to change. They have already pulled the digital downloads from those stores and are starting to release consoles that don't take disks.

              • BeckoningEagle

                In reply to lvthunder:

                Still, anti-competitive practice would be, for example, not allowing Call of Duty in the store because Microsoft sells Halo. Owning the store is not the problem. In the case of apple, they release a new parental control feature in iOS and then get rid of every app that did that. They have a music service that competes with other providers and yet they take a bite out of other providers subscriptions. The user can go and buy the subscription in the web site, but now Apple guidelines do not allow the app to redirect to the website. It has to be done through the app. Nowadays most browsing is done through the phone, so Apple is basically shutting down that method of distribution for all competing products. If apple did not own a music store this would be fine.


                These are anti-competitive actions by Apple, there is no other way around it.

              • vernonlvincent

                In reply to lvthunder:

                Yes, and there is a mechanism to be in place that will allow a user to obtain a digital download code for physical discs they may have purchased. Further, I believe Microsoft will continue manufacturing XBOX devices that have a physical disc drive. Neither anti-competitive nor a monopoly.

            • skane2600

              In reply to vernonlvincent:

              Any game company that requires a license (often enforced through technology) before a third-party can produce a working game, is potentially being anti-competitive because it can limit consumer choice, although I don't think the government has ever charged a company for doing so. And of course, as I believe others have pointed out, you don't need to be a monopoly to be guilty of unlawful anti-competitive behavior.

          • bellbm

            In reply to lvthunder:


            Again a monopoly by itself is not illegal, it's the abuse of that competitive power. As we've seen from past cases, it doesn't really matter if they charge for their apps or not (IE was free and found to be illegally bundled).


            Apple charges for some apps/services, but they also take a 30% cut of all revenue generated in the iOS marketplace, even from competing apps/services, which places an undue burden on those competitors. That is the main thrust of the anti-competitive argument.

          • wright_is

            In reply to lvthunder:

            Yes and no, you can walk into a game store or electronics shop and buy a game for PlayStation or XBox, take it home and load it up, you don't have to buy through the PS or Xbox online stores.

      • MikeGalos

        In reply to lvthunder:

        Whether you think it's fair or not really isn't the issue. It IS a market. It does have no competition allowed by a vendor that has a lock-in on that market.


        You don't get to say what is and isn't a market.

        Apple doesn't get to say what is and isn't a market.

        The courts get to say.

        And they base that on potential competitors and potential users and potential customers and whether they are being restricted.

  2. Tony Barrett

    Apple are very anti-competitive, but are only a monopoly within their own walled garden ecosystem. They let no 3rd parties in - so you are totally dependent on Apple's services, which means they monopolize that content. No other company can make or license Apple hardware - Apple control it all. When you consider that around 88% of phones sold are Android, but Android users have complete flexibility and customization of their platform, can install apps from Google, 3rd parties or side-loading and can install/replace any default apps with ones of their choice, that is totally the opposite of Apple.

  3. Michael Sorrentino

    They are a monopoly because unlike with Android or Windows, you can not buy a Mac or iOS device that isn't both manufactured by Apple and sold by Apple. Heck before the iPhone and iPad, Apple didn't even allow devices to be sold to consumers by retailers you had to buy direct from Apple. With Windows and Android, there is choice of device manufacturer and choice of retailer, Microsoft and Google do not require customers to buy their self manufactured products or to buy them from their self owned stores.

    • jimchamplin

      In reply to msorrentino:

      There's a pretty massive fallacy here. Apple has always sold through third parties. Starting from the early days, they had Apple Authorized Retailers, adding big box stores in the 90s like Computer City, Best Buy, and CompUSA. The first Apple Store didn't open until 2001.


      And to this day, Apple sells products through multiple retail channels.


      Also, saying that Apple is a monopoly on iOS or macOS devices is like saying that Dodge has a monopoly on autos with Mopar parts.

      • skane2600

        In reply to jimchamplin:

        Well, MS was essentially judged to have a monopoly on Windows operating systems which is pretty much the same. Unix and Linux were excluded. The government and eventually the courts decide what the market consists of.

        • MikeGalos

          In reply to skane2600:

          It's actually more complicated than that.

          The market that was the monopoly involved in DOJ v Microsoft sometimes included Apple and sometimes didn't, sometimes included Unix and Linux and sometimes didn't.

          In the case of Apple, if they claimed harm then they were included, if they didn't they weren't so the OS monopoly looked more strong. It could vary by charge. And did.


          • skane2600

            In reply to MikeGalos:

            The problem with competitors driving the anti-trust investigation is that it can lead to the government acting as an agent for those companies rather than protecting the consumer which is what they should be doing.


            IMO all the charges related to Java in the Microsoft case were complete nonsense. There were very few Java developers who were interested in targeting Unix/Linux that used Windows for their development or likewise very few Unix developers who wanted to target Windows with their Java programs.


            Java's sweet spot at the time was allowing headless programs that could run on several non-compatible Unix systems without recompiling. Java is still unpopular for local programs except for tools to create Java programs.

      • Lauren Glenn

        In reply to jimchamplin:

        But does your Dodge stop working if you go to your mechanic down the street vs an authorized Apple repair shop? Like when you replace the screen, battery, or fingerprint reader on the iPhone?


    • curtisspendlove

      In reply to msorrentino:

      My Macintosh Performas, PowerPCs, and iPods would like to disagree with you. In fact, we didn’t even have a “local” (in-state) Apple store until around the time the iPhone was released.

  4. Paul Thurrott

    You can load apps from sources other than Google's Store, including from the web (side-loading) and from third-party stores like those from Amazon, Huawei, Samsung, and others. You can't do that on iOS.


    Monopoly isn't just about market share vs. some competitor. It's about size, impact on consumers, control, and protectionist behavior.

  5. Bats

    Monopoly isn't "about size, impact on consumers, control, and protectionist behavior" in that sense. That's ridiculous. Once I started hearing that explanation on the podcast, I stopped it and listened to something else. LOL....that's sounds like something a New York Time reporter would say.


    Monopoly is when the end user (or consumer) has no freedom in choice. People choose to use an iPhone and they do so knowing full well what they are getting into. Like, what ghostrider said, they are only a monopoly from withing their own walled garden and that's it. If a consumer doesn't like, then you go to Android.

    • skane2600

      In reply to Bats:

      The same thing could have been said about Microsoft and Windows: People choose to use Windows and they do so knowing full well what they are getting into.  Yet somehow Microsoft was found to be in violation of antitrust laws. So I think antitrust is a bit more nuanced than you imagine.

  6. red.radar

    I wouldn't classify Apple as a monopoly, but I say the discussion is whether they are being anti-competitive. In this case the claim that Spotify is raising is that Apple has a conflict of interest. The rules imposed on the developers that participate in platform uniquely benefit Apple when they compete head to head.


    The case is likely to revolve around this very narrow question and not the broader fodder of whether we should be allowed to side load onto iOS. That is a potential solution but not the question that needs ruled upon.


    I would imagine most are going to be disappointed in the outcome. I bet the court rules that Apple is behaving anti-competitively, but its going to take some real block buster evidence in discovery to determine motive. If its "security" and the benefit of all then I bet its a slap on the wrist and a forcing of Apple to adjust their policy's with a punitive fine. Now... if they discover business motivation reasons. Hold on.. this will get interesting.


    I think we just need to be patient and see what the process discovers. I do think this case and others will be a wake up call for legislators to tackle the policy issues on hand. They will be forced to deal with this because the EU and other regulator bodies are discussing the matter. If they don't get ahead and set the rules and precedent then it could place American Tech at a unique disadvantage.

  7. Lordbaal

    People overuse the word monopoly.

  8. itclasses

    thanks for share knowledge

  9. brainsphere

    Apple has a USP that other Android devices are not having . Cannot say Apple a monopoly, there are other companies which gives tough competition to Apple. Brainsphere has done a case study on this

  10. Lauren Glenn

    I guess it's like this... if Microsoft required you to go through their store to be able to install software of which they always take a 30% cut with no ability to sideload, then it's a monopoly in that regard. The most popular app market (I assume) and the only way to tap it is via a 30% Apple tax. Android lets you sideload things even if they don't recommend it..... it's a use at your own risk... which you can't do on Apple.

    • skolvikings

      In reply to alissa914:

      But that's not a monopoly. There's literally thousands of closed ecosystems that work exactly that same way. Xbox, Playstation, and Switch being among them.


      From the FTP website:

      "Courts look at the firm's market share, but typically do not find monopoly power if the firm (or a group of firms acting in concert) has less than 50 percent of the sales of a particular product or service within a certain geographic area. Some courts have required much higher percentages."

      • mikegalos

        In reply to Skolvikings:

        And all of those ARE monopolies.


        Being a monopoly is not against the law.


        What's against the law is using the power you have as a monopoly in ways that hurt the market. It's ABUSE of monopoly power that's illegal not being a monopoly.

  11. cavalier_eternal

    A monopoly is more about influence and control than market share. That said, I personally feel like Paul often uses the word monopoly as a catch all for antitrust violation. The U.S. has two major antitrust laws, the Sherman act and the Clayton Act. Both lay out anticompetitive behavior that is illegal an abuse of a monopoly is just one of them. For a lot of people though monopoly = antitrust so it is probably easier to say monopoly that to delve into the details specifics of price fixing, cartels, collusion ... Using it as a catch all does carry with it the potential to confuse the conversation a bit.

  12. RM2016

    Roughly 60 % share in the U.S. of mobile OS market for starters. I advise everyone to review the D.C. Circuit Court of Appeals decision in Microsoft with the caveat that the U.S. Supreme Court was not asked to review that decision. Apple was able to get away with this stuff when they held a small portion of the desktop market. That is not the case any more. Here is the case citation: 253 F.3d 34 Well worth the read. I do think there is a major market play to be made here by Microsoft. If Apple wishes to overcharge gamers then gamers need a better mobile option and leave Apple the incessant selfie crowd. However, lacking that I think Apple is about to be microsofted. For goodness sakes you are required to use their browser even when you don't think you are. If Microsoft did that they would be back in court the same day.



  13. norahensl

    I found an article on ProtonMail about Apple's authoritarian regimes. The European Commission announced it would be opening an investigation into Apple's App Store practices, which constitutes an illegal breach of EU competition law. Apple's IOS controls 25% of the global smartphone market, what means that a billion people should use the App Store to install apps. This gives enormous influence to Apple. Moreover, Apple could ban apps from the store if they refuse to "offer in-app purchases for paid features that are available for purchase elsewhere". So, in this case, Apple wants "Apple wants a 1/3 cut of your sales, regardless of whether you want to sell on this platform or not".


    Regards, Nora

  14. ghostrider

    Is Apple using its own platform dominance to obtain a business advantage, ie, it's Apple's hardware, Apple's O/S, Apple's app-store, Apple's rules. There is no alternative if you step into their garden - they make all the rules, and you play by them or you're out. The thing is, are Apple's own applications subject to the same scrutiny? Are Apple's applications taking advantage of undocumented API's to maintain an advantage? Have Apple knowingly undermined an alternative application to their own? Have Apple knowingly blocked apps from their app store that could compete or offer an viable alternative to their own solutions?


    This hasn't even touched on their cut of App-store purchases, or their blocking of in app alternative payment systems that don't go through their systems. Lots of questions, and if you asked the average person, they probably say 'almost certainly' to most of them, but proving it is another thing altogether. Besides, Apple are a darling of the US government and the stock market - they make a lot of people a lot of money, and money is everything to them.

  15. coeus89

    I think the logic is that they are not a monopoly like Standard Oil was a monopoly. They are a monopoly in that they have an enormous user base (1 billion plus users). They are also a walled garden, in that they don't allow competing stores. They also, in addition to being the billion user platform maker, have decided to compete on unfair terms with the app makers for that platform. So it isn't in terms of market share, it is in terms of scope. I am not sure how I feel about this 'redefinition' of monopoly yet but I think that is the idea.

  16. Greg Green

    People are misusing the word monopoly when they should be calling it anti competitive practices.


    In the end some attorneys are like bank robbers, they go where the money is. And at least in the US many legislators are attorneys.

    • MikeGalos

      In reply to Greg Green:

      No

      You can be a monopoly if you aren't anti-competitive.

      You can be anti-competitive if you aren't a monopoly.

      You can't be BOTH.


      • jgraebner

        In reply to MikeGalos:

        That's actually pretty much the opposite of how the law works. It is being anti-competitive that is illegal, not being a monopoly.


        The best example of this is the eBook decision from a few years back. Apple was found guilty of price fixing (an anti-competitive act) with Amazon cited as the primary victim of the behavior. This despite the fact that Apple was a new entrant into that market and Amazon had such a commanding market share as to be effectively a monopoly.

        • MikeGalos

          In reply to jgraebner:

          Actually, had Apple set artificially high prices in that case they would likely not have been guilty since they had, as you say, no power in that market (although their control of the store might have been seen as an issue but let's ignore that for this example).

          What made Apple guilty was that they colluded with a monopoly power in that market to be anti-competitive thus being part of a conspiracy to commit abuse of monopoly power by not competing with the monopoly and, instead, assisting Amazon in price-fixing.

  17. vernonlvincent

    Nilay Patel had the attorney that represented the plaintiffs in the SCOTUS decision on the VergeCast. His argument was that the monopoly possessed by Apple was anti-competitive due to their control of distribution of iOS apps. Within the market for iOS apps, they control 100% of distribution. They grant themselves exceptions that others do not or cannot receive. And because ofg their control - a software developer is at the whim of Apple when it comes to iOS app store. There are no other conventional venues for getting iOS apps on the phone. (TestFlight is not a distribution model; and neither is the use of enterprise certificates to get apps installed).


    This is contrasted with Google, where there are multiple app stores for Distribution (I have a Samsung phone and have two app stores on my device - Google's and Samsung's).


    Companies are allowed to have monopolies. What they are not allowed to be is anti-competitive.

  18. Brett Barbier

    Thanks for the replies so far!


    A few comments...


    Defining “iOS apps” as a market seems a bit nuts to me. With that logic, every single store is a monopoly.


    Amazon has has a monopoly on AWS services.


    Microsoft has a monopoly on Azure, and XBox games (they have authority over games even if some are sold in stores).


    Walmart controls what is sold in their stores, and they sell their own products alongside the 3rd party products.


    Amazon also controls what is sold at amazon.com, and they make money from sales, and they also have their own Amazon Basics products that they sell alongside the 3rd party products.


    There are are ways of getting iOS apps on an iOS device without the App Store, by the way. Legitimate ways (via enterprise tools, and side loading with a developer account, for example).


    • Sprtfan

      In reply to Brett_B:

      I think that vernonlvincent answer most of what you said, but I think the concept that keeps getting missed is "Companies are allowed to have monopolies. What they are not allowed to be is anti-competitive." If you think that Apple is not being anti-competitive, that is fine but the examples of other monopiles does nothing to make your case.

    • wright_is

      In reply to Brett_B:
      Defining “iOS apps” as a market seems a bit nuts to me. With that logic, every single store is a monopoly.

      Yes and no. With Android, macOS (currently), Windows and Linux, you can choose whether to use the official App Store or to install the apps from another source - another app store, "side loading" on Android, or an installer or source code directly on the machine with a desktop OS.

      With iOS, there is the Apple app store and that's it (unless you root the device). That is what makes it a monopoly.

      Azure is a rental service and you get a fairly wide selection of OSes (Windows and a few variants of Linux) and you can put your own software on those machines. You can also user Docker, Kubernetes etc.

      XBox, I can buy over the store or walk into the local games or electronics retailer and buy a packaged game - although there is the question of the games being licensed for the platform, the same with PlayStation, Nintendo etc.

      Walmart - is just one retailer. You are looking at it back to front. If I want milk or bread, I can go to one of hundreds of stores to get it - in my town, we have 4 independent bakeries, half a dozen different supermarket brands and gas stations that all sell bread. If I really want to, I could probably order it online as well; although we tend to "compile" our own bread from source, as it were.

      The same with Amazon, they are a monopoly, in that they have the lions share of online sales, but you can still buy most of the products elsewhere and where they have an Amazon Basics equivalent to a brand name product, you aren't forced to buy the AB product and they don't stop the brand names from being sold in other stores (not yet, at least).

      Enterprise account and developer account - for both of those, you have to pay Apple for the privelege and that isn't something the average consumer can do. With my phone, I have the Google Play Store, the Huawei App Gallery store and, on my work phone also the T-Mobile app store available. There are also other I could use.

      But, whatever, being a monopoly isn't illegal, as long as you use your position benevolently and don't abuse it, with the example of Apple, with things like extortion.

      • Brett Barbier

        In reply to wright_is:

        Can’t one just use an Android phone, just like you can just go to a store that isn’t Walmart to buy bread? Paul has mentioned multiple times how easily he switches between platforms. I’ve switched back and forth too - the vast majority of mobile apps are available on both, and things generally work fine.

        • skane2600

          In reply to Brett_B:

          There's no expectation that bread is going to be usable for years as would be the case for apps. Bread doesn't require a pre-investment in specific equipment to be eaten. There's no requirement that a company that sells you an iOS app has to let you use the same app on an Android phone free of charge (assuming that the app is even available on Android).


          Although Paul, as a tech writer, can justify bouncing back and forth between iPhones and Android phones, many people can't and they shouldn't have to just to satisfy Apple's business model.

          • Brett Barbier

            In reply to skane2600:

            So, is Apple allowed to have any rules for their app store, in your opinion?

            • skane2600

              In reply to Brett_B:

              I'd like to see as few rules as possible on any of these app stores. The PC and the Mac had no rules for decades and it worked very well. One can only imagine how much less would have been accomplished if program development had been limited to what could be approved by Apple or Microsoft in the early days of personal computers.


              Apple is under scrutiny precisely because their rules are more restrictive and anti-competitive than those of other apps stores.



        • wright_is

          In reply to Brett_B:

          We are talking about Apple and i-Devices. Yes, you could take an Android device, but it wouldn't be an i-Device. If you use an i-Device, you have no option, other than to use Apple's Store and developers have no option other than to pay their tithe to Apple.

    • vernonlvincent

      In reply to Brett_B:
      == Legitimate ways (via enterprise tools, and side loading with a developer account, for example).==
      Those are not legitimate ways for the typical consumer to get apps. A developer account costs $99 and a user must have a computer running macOS to take advantage of that option. Enterprise tools are likewise not an option for consumers. No consumer would ever think that getting an enterprise certificate in order to install an app is a reasonable way to get an app on a device.

      Likewise - every single store is not a monopoly. Samsung's store is not a monopoly because some of the same apps are available in the Google Play Store. Samsung apps may be more 'optimized' for Samsung phones - but there is no requirement that a user install apps from the Samsung store if they have an Android device. Likewise, Android phones allow users to install apps manually instead of using any app store (such as what Epic Games did with FortNite). Again - for the typical consumer - there is no such option on devices running iOS or (presumably) iPadOS.

      And, to anticipate a further argument: Security is not a defense against antitrust or anti-competitive behavior. AT&T tried the same argument back in the 70s by saying that customers couldn't buy their own phones because 3rd party phones couldn't be guaranteed to work on the AT&T telephone network - they could break things and were of lesser quality. That argument was not persuasive then, and it's not now.


  19. Paul Thurrott

    Time to wrap up the comments here, folks. There's nothing more to say: Apple has a monopoly and is under investigation in multiple jurisdictions around the world for abusing that monopoly.

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