Home » Opinion: who is more anti-competitive – Alphabet or Apple?

Opinion: who is more anti-competitive – Alphabet or Apple?

by archyw

“Don’t be evil” has been Alphabet’s unofficial motto from its inception until the first half of 2018, when the company quietly removed the slogan from the code of conduct distributed to employees.

Simple enough, some would think, but in the adage that actions speak louder than words, it may have been deleted too late.

Apple AAPL,
-0,75 %,
GOOG d’Alphabet,
+0.38%
neighbors of California, enjoys an almost undisputed reputation for being both cool and innovative. And although the company has never explicitly written down its intention to avoid evil in its manual or make it an unofficial slogan, the world seems to appreciate Apple’s contributions to the world.

Also by Daniel Newman: Democrats’ new bills to regulate big tech are a reckless rewrite of antitrust law – and they won’t protect consumers

In the eyes of regulators, neither company is necessarily playing fairly, which has caught the attention of politicians, policymakers and regulators, all of whom are calling for greater regulation of “big tech”.

Alphabet has come under fire from regulators around the world, including recently becoming the defendant in a lawsuit brought against it by 36 state attorneys for violations of antitrust laws, including unfair developer terms. Apple, meanwhile, has faced its own barrage of antitrust investigations and prosecutions from the United States, the European Commission, the United Kingdom and, most recently, competition oversight in Germany. .

So, while regulation is rampant, the platform sits at the epicenter of the debate, and the iOS vs. Android battle is arguably the most visible of all.

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And for a simple reason. Mobile use generates more than half of all internet use, and that number continues to increase, meaning the apps we have on our devices are driving downstream use of social media, content. , e-commerce and more – putting the operating system and its coincident development platform at the top of the food chain.

We can’t even go to Facebook FB,
+0.85%
or Amazon AMZN,
-0,43 %
without one of these operating systems, which leaves little doubt as to why Facebook thought about creating its own.

Choice is the determinant of fairness

The focal point of most surveys on Apple and Android is the fees charged to developers and the options developers have to market in a different way. Essentially, being in the App Store is a toll, and are there any alternative avenues developers can take to build, market, and distribute their apps.

For whatever reason, this seems to be where courts, regulators, and lawmakers continue to get stuck. Still, it’s the apparent intersection of anti-competitive and unfair practices – at least for Apple. This is all due to the company’s closed ecosystem, strict rules for developers, and exorbitant fees (30%).

It’s quite simple: Apple does not let its developers take alternative routes, better known as “sideload” applications. This does not allow developers to avoid the toll even though the purchase path subverts this app store. If you want to put the Spotify SPOT,
+0.80%
app on your iPhone and use your paid account, Apple gets its pound of flesh.

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Android is certainly not perfect here. Alphabet faces its own unique challenges due to a reputation among developers for higher development costs, lower revenues, and demand for Android apps. Quality and security has long been an issue in the Play Store, but it has improved in recent years with the increase in app verification by the company.

However, Android allows sideloading, which means its consumers and developers have more choices. And if the experience of a side-loading application is worse due to a lack of verification and quality control, so be it. But the option to sell an app off the platform and use it on the device, in my opinion, means no one “has” to pay the toll. Instead, it’s a choice to sell on Amazon AMZN,
-0,43 %
or Shopify or eBay EBAY,
+0.42%
or just create your own e-commerce site.

It is that simple. Choice or no choice. Android gives its developers a choice, and Apple doesn’t, unless you plan to sell to no more than half of the addressable market in the United States. Something I guess regulators will need to determine?

Who really benefits from antitrust?

Android enjoys a larger global market share than Apple, but it is not even close when it comes to anti-competitive policies on the respective platform. Apple’s policies are much more restrictive, and the lawsuits brought against it by Spotify and Epic Games clearly illustrate how Apple can wield its power even against multi-billion dollar global brands.

If we talk about the United States, the case becomes even more obvious due to the overwhelming preference for iOS over Android, where Apple has 54% and well over double its 23% global market share.

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And while some questionable practices can lead to unfair terms for app developers, the real question should be whether all this big tech regulatory talk will lead to physical action. So far, this has only led to a series of hefty fines, which for companies the size of Alphabet and Apple is nothing more than a speed bump.

Perhaps the most provocative question of all, would the company in any way benefit from a meaningful antitrust ruling that not only penalizes but materially shatters or fractures the experience that platforms like iOS and Android offer its customers. users?

For most of society that would be a lot worse.

Daniel Newman is the senior analyst atfuture research, which provides or has provided research, analysis, advice and / or advice to Nvidia, Qualcomm, Microsoft, Amazon and dozens of other companies in the tech and digital industries. Neither he nor his company hold any stake in the companies mentioned. Follow him on twitter@danielnewmanUV.

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