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Comment by stanrivers | Hacker News Reader

This is an interesting point that people miss sometimes - so thank you for bringing it up.

I guess a comparison would be a utility that both owns the transmission lines and power plants? However, the transmission line rates are set by regulation. We have accepted as a society that the infrastructure needs to have regulated pricing.

So why is it all that different here?

The transmission of the products, just given the way the cellphone market works, is basically limited to either App Store or Android Store. I basically have no alternative.

Isn't that approaching a monopoly / duopoly where regulation starts to make sense?

I say this all as a fairly conservative person, but it just seems too similar to utilities to me...

Why am I wrong? (Serious Question)

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It took MANY decades before transmission lines, power generation and brokerage were forcibly separated and regulated. They traditionally were integrated, even through the 1980s in some countries.

Utility regulation only works when the product doesn’t change and is a fungible commodity - power is power. It also is about driving prices down for consumers for that commodity.

The iOS and Google platforms have barely existed more than a decade, and the platforms are constantly evolving. New platforms and ecosystems are emerging too, with Facebook/Oculus, Valve/Steam, Amazon with Fire/Alexa, etc.

Enshrining today’s dominant app platforms as the government sanctioned ones will surely stifle their evolution and innovation, because that’s what declaring something a utility is: a commodity with no differentiation.

The crux of this matter is that end consumers generally do not care about the 30% cut, It’s a retail cut they’re used to from other platforms like Sony PlayStation, or Ticketmaster for concert tickets. it barely impacts them (and arguably the curated stores are a better overall experience). I also don’t think almost any consumer of iOS would agree their App ecosystem experience is fungible with Android or anyone else. This is entirely driven by Devs and publishers that want better margins.

>It’s a retail cut they’re used to from other platforms like Sony PlayStation, or Ticketmaster for concert tickets.

The counterpoint being that Ticketmaster doesn't take a 30% cut on consession sales at the event AFAIK.

That's the real issue - these stores are distributing some apps for free and some for pay. Hence free apps can sidestep paying the Google/Apple cut and then offer in-app payments directly. But that's entirely due to their business model of allowing free apps and taking a cut on paid apps.

> Ticketmaster doesn't take a 30% cut on consession sales at the event

Ticketmaster doesn't provide as complex of a service as Apple does with the App Store.

To whom? Users want their non-malicious apps / non-fake tickets. Sellers want to sell their apps / tickets.

The service doesn't seem that complex. Executing the service well may very well be complex, but the service itself isn't.

If the App Store is more complex than Ticketmaster is by Apple's own doing. Certainly nothing that justifies taking 30% of all transactions that go near it.

Who gets to say it’s unjustified? As the judge said, there is zero evidence it is unjust.

Not sure what you mean, because Google/Apple also take a cut on in app payments.

That's the crux of the matter in the Epic suit, and my point being that Ticketmaster doesn't take a 30% cut in food and drink sales at the venue.

There is no law preventing them from trying!

Ticketmaster's parent company is Live Nation which owns some concert venues and also manages concert tours. In both those capacities they do sometimes collect a percentage of concessions sold.

But that's only if they own/operate the venue. And there is commercial separation between the ticketing service and venue.

So it's like you use Google Firebase as the backend for your app and they take a cut under that agreement, as opposed to the Play Store agreement.

Ticketmaster often negotiates exclusivity rights to venues. Meaning you can’t use a different ticket selling service for that venue.

There was an attempt to argue they were a monopoly that should be regulated due to the % of the ticket they retained (Pearl Jam spearheaded this in the 90s). It didn’t work.

Also I see nothing wrong as a business model with the Firebase analogy. If you could convince customers to go for it, then why not? Will the business model police arrest you?

What I don’t get about these arguments is that they’re trying to get the government to punish a couple of companies that built a very successful business model purely because others want some of that dough. This isn’t about monopoly by any historical definition, it’s about sour grapes.

>The crux of this matter is that end consumers generally do not care about the 30% cut, It’s a retail cut they’re used to from other platforms like Sony PlayStation, or Ticketmaster for concert tickets.

I think by inadvertently comparing them to ticketmaster (whom consumers actively loathe) you've inadvertently demonstrated just how much consumers do care.

Consumers just aren't necessarily able to understand the underlying market mechanism that gives rise to the shittiness they experience.

A better comparison may be banking, where a bank which acts as a market operator is not allowed to also participate in the market.

Banks don't offer the same services and prices, and they cann innovate by creating new financial products, which seems to address your fear of losing the innovation in a regulated market.

When a bank wants to participate in a market it operates, it is forced to create a subsidiary, which is not allowed to have a better deal, or insider information.

These rules have been pivotal in the development of market operations, because they offered investors confidence that they had recourse against rigged markets.

In effect, that would mean that Apple and others. would be able to compete with app creators, but 1) Market owner's apps would have to pay the 30%, and 2) market owner would have to provide equivalent ToS enforcement for all services.

> The iOS and Google platforms have barely existed more than a decade, and the platforms are constantly evolving. New platforms and ecosystems are emerging too, with Facebook/Oculus, Valve/Steam, Amazon with Fire/Alexa, etc.

Once you have critical mass, failure is next to impossible, slow and even preventable. Microsoft has been dominating desktop computing since 1981 through MS DOS and 1991 through Windows (almost 40 years!). Android and iOS will probably be around for 50 years, even if they become just another layer. We still have radio, TV, heck, even the post and vinyl.

Computing has changed. It crossed the chasm.

I am no certain how can you make this judgement given that Android existed only for about 10 years (OK, 12 - I just checked)

It's a prediction.

Oh, and as a side comment. Which free/cheap/reasonably priced dominant OS died while its platform was still alive?

zOS is still the dominant OS for mainframes (60 years later!), MS-DOS was replaced by a product from the same company, Windows, that is still the dominant OS for desktops (30 years later). I don't see anything on the horizon that threatens zOS, nor Windows. Except their platforms disappearing, which is still at least 10-20 years from happening.

iOS is the dominant OS for its platform and Apple won't abandon it until the platform dies (I guess once we have wearables that completely replace smartphones?), Android is the dominant OS for all other smartphones. Microsoft poured billions into creating a smartphone app ecosystem and failed. Blackberry, Palm, Nokia, Amazon tried and failed. How, pray tell, would Android die if smartphones are still popular? The Google moat is HUGE.

> It took MANY decades before transmission lines, power generation and brokerage were forcibly separated and regulated. They traditionally were integrated, even through the 1980s in some countries.

It's worth noting that Media has gone in the opposite direction - One of the many reasons I was vehemently opposed to Comcast's acquisition of NBC was because it's just too vertically integrated to be good for the consumer.

I believe a better comparison would be Comcast also having a Netflix competitor… let's call it Xfinity Stream. And then they make Netflix have extra costs (say, having plans that have low monthly bandwidth caps that limit how much you would be able to use Netflix) but exclude their own service from having those costs. Essentially, making an artificial floor on competitor prices where their own service can ignore that floor.

… Let's just say there's a reason my example is oddly concrete.

In your example, as far as I know consumers do not actually interact with the power plants, and have no choice on what utility company to use; to do so would require duplicate infrastructure. In the (either) app store case there is — I can still install the Microsoft mail client instead of the Apple or Google ones.

Or to create a more direct comparison, that Comcast fully blocks Netflix unless they give 30% of fees and launches their own service which is heavily subsidised.

This wouldn’t work now, but if it was done when Netflix was growing it would have severely impacted their ability to compete.

Or to create a more direct comparison, it would be like Netflix distributing content inside the Xfinity OnDemand app and using Comcast’s streaming platform to do it, and paying Comcast a percentage of the revenue.

Which is exactly how Xfinity OnDemand works.

Apple’s creation, development, and control of the App Store is akin to Comcast’s Xfinity OnDemand. They are both retail stores owned, operated and curated by their private enterprise creators in order to sell some first party but mostly third-party content.

They did try to do something like that, where Netflix counted against your bandwidth cap but Comcast's own IPTV service did not. Maybe it was AT&T? I do recall it being a thing.

> Isn't that approaching a monopoly / duopoly where regulation starts to make sense?

Or it might be a cartel (few players are coordinating for maximum revenue, are not competing, prices are fixed), but we usually won't let that stand either.

It's good to remember that Google and Apple (and others) have been found to collude before when they made secret no-poaching deals. They settled for $415m.

I don't know how that would work though, without breaking up the companies.

“I guess a comparison would be a utility that both owns the transmission lines and power plants?”

Something like that happens a lot with mobile networks, where some operators both have a license for bandwidth and sell it to customers, and other operators buy bandwidth from them to sell it to customers (https://en.wikipedia.org/wiki/Mobile_virtual_network_operato...), with an important difference being that customers (sometimes after a few years of contract) are free to switch between providers.

But yes, the important discussion here is whether app stores should become utilities. AFAIK, there is no existing law there, so it will have to be created. Because there is no law, I don’t see Epic winning this in the sense that they will get paid for damages. They may win in the sense that things will change, though.

If you sell breakfast cereal, you’re competing against the grocery store’s store brand.

If one store charges outrageous fees for third party brands then customers will just shop at several stores. That doesn't work for appstores.

Apps are not food.

Apps used to mean appetizers, not applications.

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