Driving the news: The U.S. The Supreme Court ruled that the Apple App Store with a monopolistic behavior could move forward.
The big picture: Here's why "market definitions" are so central to antitrust fights.
- If the market is defined as "restaurants" or "dining out," then you do.
- If the market is defined as "meal" or "food," well, people can buy groceries and cook, right?
- One way, you're a monopolist ̵
In the App Store suit users charge that Apple, forcing developers to sell iPhone apps only through Apple's storefront and taking
- Apple has argued that, among other things, users can access software and services through web browsers on their phones, and that most apps accessed from the App Store are free downloads.
If you define the market as "iPhone apps," Apple looks like a monopolist – it maintains complete control over the space.
- You can not Put a non-App Store app on an iPhone without "jail-breaking" it, tampering with the operating system in a way that violates Apple's terms and voids the warranty.
If you define the market, say, "smartphone apps, " you get a different outcome.
- That's because users are free to buy Android phones and access a very different universe of apps. Users have choice – presto, no monopoly.
The same principles apply in the debate over breaking up Facebook.
- In his recent essay arguing that Facebook has become too powerful, co-founder Chris Hughes argues that the company "is a powerful monopoly, eclipsing all of its competitors and erasing competition from the social networking category. "
- "The social networking category" is a way to define this market that most freely casts Facebook as a monopoly.
- But if you call it "messaging," then Apple, Snapchat, and the cellphone providers all look like hearty competitors.
Similarly, in many countries, Google looks like it has a monopoly in the search market. But if you define the market instead of "online information," the case is much more murky.
- Google's Android practices are also subject to anti-trust scrutiny. Last year's EU decision to punish Google for practices involving the Android Play Store announced that Google had a monopoly in that market.
Our thought bubble : In technology, market definitions are unusually fluid because hardware evolves quickly and software is infinitely malleable.