Over on Threads, Walt Mossberg has commented on the Apple/DOJ case. First up, if you do not respect Walt's opinions, you're a fool. Walt is one of my tech journalism heroes. That said, I think he's missing a couple of points here.
Walt is correct that the vertically integrated model has been Apple's since the start. But what is permissible when you're a small company or in a nascent market is no longer permissible when you are in a position of market power. And no one doubts that Apple is in a position of significant market power, not least Apple itself.
Second, like most people, Walt is being tripped up by the word "monopoly". The DOJ definition makes absolutely no mention of a percentage: it talks only of "market power". That's why the DOJ's filing is careful to refer to Apple having both market power AND significant market share.
Back to market power. Does Apple have it? Well, Apple has certainly -- publicly -- said so. Remember Apple very happily talking about the $1.1 trillion in developer billings and sales made through the App Store in 2022? As Apple owns that app store, it's almost a dictionary definition of market power being exerted.
And this is another thing which people will get tripped up over: market power doesn't just mean power over the market where you sell goods: it's also about your control of markets adjacent to that.
For example: Microsoft had no market power in PC manufacturing. It didn't make PCs. But it did have huge market power in operating system software, which it could (and did) leverage to control things in PCs to its favour. OEMs didn't have to sign the contract which MS put in front of them, in theory. In practice, they did, even though MS wasn't a part of their market, because of the power Microsoft had in operating systems.
This was one of the new aspects of the Microsoft/DOJ case which, outside academic circles, didn't get noted: it was the first major case which focused on the network effects of having monopoly power in one market could mean in other markets. Although the Clayton Act made tying one product to another illegal, generally that was within the same market, not in adjacent ones.
If you are keen to know more about how the Microsoft/DOJ case redefined some aspects of antitrust, this paper from 2010 is a good read.
Walt notes that he doesn't think there's a right for other companies to use Apple's IP, which is proprietary to them. And he's right, up to now. But in a situation where monopoly power exists, the game changes. Remember that IBM's 1956 consent decree forced it to not only publish technical data freely but also license its patents under fair terms (including some which had to be royalty-free).
This is another case of "what was legal becoming illegal". IBM developed those patents: it's monopoly power meant that it was prevented from using them in a way which would otherwise be legal. And, of course, the IBM 1956 consent decree basically created the PC industry as we know it.
All of this is going to trip many people up. How can a company have market power when it doesn't have a 80%+ share of a market? Why are we talking about third-party developers when Apple doesn't compete (much) against them? Isn't Apple just trying to protect their customers?
I would urge everyone to read The Verge's coverage because they really know their stuff when it comes to legals. There's going to be a lot of opinions (including from me, sorry). But it will be fun: writing tech news while Microsoft/DOJ and Microsoft/European Commission were on was some of the best fun I had as a reporter. Settle in for a long ride.
One final point: currently, we only have a filing. This is not the point where the DOJ starts talking about/showing its evidence. Does the DOJ have a case? Until we (or rather, the judge) sees evidence, anyone who says they absolutely know is wrong.
Disclosure of the evidence is where things REALLY get interesting. And it's also where things get dangerous for Apple because it has carefully cultivated a brand which focuses on being pro-consumer. Documents which show collusion, patterns of bad behaviour, and more could damage that brand. Get the popcorn ready.
