Who does not like the game of Monopoly? It’s been around and popular since 1935 so you know the world had monopoly problems long before Hasbro made it popular among common folk.
Even Apple has been sucked up into the monopoly vortex with a recent Supreme Court ruling that says Apple can be sued because it operates a monopoly. Yep. For some, the App Store for iPhone and iPad is a monopoly. Or, is it?
SCOTUS voted 5-4 to allow App Store customers to sue Apple as a monopoly and with more than $200-billion in the bank, you know the lawyers are lining up to take their shots. The question is obvious.
Is Apple’s App Store a monopoly?
The answer, as always, is just as obvious. It depends. Apple says no. Some court somewhere in the not too distant future might disagree.
A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity.
If you want apps for your iPhone or iPad, then, well, where can you get them?
The App Store. Apple’s App Store. Yes, there are other and somewhat sneaky methods to side-load an application that is not available on the App Store, but that does not change the basic facts.
So, that must mean Apple has a monopoly on the App Store, right? Not so fast.
[Monopoly] contrasts with a monopsony which relates to a single entity’s control of a market to purchase a good or service
Good grief. This is getting complicated.
Again, Apple completely controls the App Store– which apps are allowed to be sold (or not)– and there are no viable and valid alternatives.
Let’s look at that monopoly definition again.
Monopolies are thus characterized by a lack of economic competition to produce the good or service, a lack of viable substitute goods, and the possibility of a high monopoly price well above the seller’s marginal cost that leads to a high monopoly profit.
The App Store doesn’t have competition, there is no viable substitute for apps, but does it matter if Apple does not control app prices? So, is there harm to the customer because Apple owns the App Store but does not set prices?
No. So, no monopoly, right?
In many jurisdictions, competition laws restrict monopolies. Holding a dominant position or a monopoly in a market is often not illegal in itself, however certain categories of behavior can be considered abusive and therefore incur legal sanctions when business is dominant.
Even if Apple’s position as the only App Store proprietor makes it a monopoly, one component of consideration for monopoly busters is control over prices. Apple does not control prices. Most apps on the App Store are free. Apple makes money by taking a percentage commission from each app, and determines which apps can be sold or distributed, therefore, completely controls the market, but not to the detriment of customers.
See how crazy all this monopolistic nonsense has become?
Unfortunately for everyone concerned– except lawyers— this will not end well for anyone, and it won’t end soon, even if Apple does not have a monopoly on well paid legal counsel.