Two weeks ago, Apple and Google managed to defeat a major bill in North Dakota to force competition in app stores. This week, the Arizona House of Representatives defied the tech giants and passed the very same bill…Matt Stoller, “Apple Threatens North Dakota, Suffers Crushing Loss in Arizona: “A Lot of It is Just Fear”” at Substack
Even sovereign states like Australia have felt the heat from pushing back against the likes of Facebook. Facebook blocked access to the Australian government’s Facebook pages during the forest fire season, due to a dispute about payment for news links. Sources think that Facebook was threatening Canada, also contemplating legislation, with the same treatment. But Arizona has pushed ahead, with the bill passing 31–29 in the State House. What’s at stake?
The app stores we go to get independent applications for our phones are a very lucrative set of monopolies:
The problem with app stores is that the two main ones are under the tight control of the two firms, Apple and Google, that make the core software to run smartphones. You can only buy apps for your iPhone through Apple’s app store, because Apple bars rivals from setting up app stores on the iPhone. Moreover, you have to use Apple’s payment system to buy apps, because Apple also bars rival payment networks from its app store. Google has slightly less control for phones that run its mobile operating system, Android, though essentially the same setup.
Together, Google and Apple have 99% of the smartphone market. Because it’s basically impossible to sell mobile apps without going through their app stores, both can charge high prices – 30% of the take – for developers who want to sell apps on phones they control. For a sense of perspective, a credit card charges 2-3% to a merchant for access to a payment network, and this price is ten times that for a comparable feature.Matt Stoller, “Apple Threatens North Dakota, Suffers Crushing Loss in Arizona: “A Lot of It is Just Fear”” at Substack
Steve Jobs has also been shown to have designed the app store payment system to make it difficult to switch away from Apple’s iPhone.
Many sources are beginning to conclude that we are dealing with monopolies here. Stoller notes that, “state legislators, who were the key anti-monopolists of the 19th century, are starting to flex their muscles once again.” Other state legislatures, he notes, are considering moves to limit monopoly power in their jurisdictions.
You may also wish to read: Does Amazon’s near-monopoly justify its use of censorship? Caitlin Basset looks at the little-known Seattle law that might make Amazon’s censorship much more costly. Because Amazon is 83% of the market, publishers hesitate to publish what Amazon might ban. Meanwhile, readers are urged to act to protect classics.