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Antitrust

How big is too big? And when does a company become so big that the government is forced to step in and make it smaller? Politicians have been struggling with those questions for at least a hundred years. But as the latest generation of tech companies has taken shape, the questions are becoming more and more relevant to internet giants like Google and Facebook. There’s a new movement in Washington to break up those companies, whether through a Justice Department lawsuit or an old-school appeal to the Sherman Antitrust Act. It’s a struggle Microsoft fended off in the ‘90s, and it has only grown more urgent in the years since. As Amazon has taken a stranglehold of online retail, Jeff Bezos’ company has started to attract antitrust attention as well, with figures like Sen. Elizabeth Warren and Lina Khan taking aim at Amazon’s cutthroat competitive strategies. If it succeeds, it would be one of the most ambitious government projects in a generation — but success is still a long way off.

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Apple is going to be stunned when it finds out how the Mac works.

The company put out a new statement today criticizing Spotify’s complaint to the EU about restrictions on its iOS app:

Fundamentally, their complaint is about trying to get limitless access to all of Apple’s tools without paying anything for the value Apple provides.

What kind of computing platform could possibly offer developers that kind of flexibility? Who would make such a thing?


DOJ’s Jonathan Kanter says the antitrust fight against Big Tech is just beginning

The assistant attorney general says ‘the resonance these issues have is something that I’ve never witnessed in my lifetime.’

Microsoft’s recent layoffs contradict what the company promised of its merger, the FTC says.

The Federal Trade Commission complained to a federal appeals court on Wednesday that Microsoft’s layoff of 1,900 employees in its video games division went against its representations in court as it fought to acquire Activision Blizzard.

The move undermines Microsoft’s claims that the companies would continue to operate independently, the FTC said, and will make it harder to get “effective relief” if the agency succeeds in its administrative proceeding.


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The Justice Department is still gunning for Ticketmaster.

But according to Bloomberg’s Leah Nylen, it’s delayed plans to file an antitrust complaint from late 2023 to sometime this year, continuing its investigation into the company’s business practices. It’s reportedly not too happy with Ticketmaster’s response, either:

Antitrust enforcers, who have been investigating the company for more than a year, have been frustrated with Ticketmaster over how slowly it has responded to the Justice Department’s requests, said two of the people. Because of that, the Justice Department has been forced to rely on third-parties to help make its case. In December, the Justice Department sent follow-up information requests to rival ticketing platforms, said two other people familiar with the matter. 


Google will face another antitrust trial September 9th, this time over ad tech.

The company will face off in federal court against the US Department of Justice in Virginia, after the DOJ claimed in January 2023 that Google violated US antitrust law by illegally monopolizing the digital ads market, allegedly boosting its profits while raising costs for advertisers. Google has said the DOJ’s reasoning “would slow innovation, raise advertising fees and make it harder for thousands of small businesses and publishers to grow.”

The ad tech trial will be Google’s second match-up against the DOJ in an antitrust case in a year, following a trial over its search business beginning last September. The parties will deliver closing arguments there in the coming months.


Apple is bringing sideloading and alternate app stores to the iPhone

iPhone users — but only those in the EU — will be able to download apps from third-party app stores as a result of the bloc’s new Digital Markets Act in March.

Apple thought it dealt with Epic v. Apple — has it really?

Apple has started letting developers link to third-party payment processors, but only if it’s on Apple’s own terms.

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Apple’s EU-induced iOS sideloading plans are starting to emerge.

Here’s the Wall Street Journal with a look at how Apple could maintain “close oversight” of iOS sideloading in the EU after the Digital Markets Act’s March deadline:

The company will give itself the ability to review each app downloaded outside of its App Store. Apple also plans to collect fees from developers that offer downloads outside of the App Store, said people familiar with the company’s plans.

I will be very interested to see if the EU is happy with such a tightly controlled approach. The EU’s top antitrust official Margrethe Vestager recently said it “stands absolutely ready to do noncompliance cases.


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JetBlue and Spirit aren’t giving up on their merger just yet.

The two airlines have filed a notice of appeal, pushing back against a federal judge’s decision to block the $3.8 billion merger over antitrust concerns.


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Don’t hold your breath for Apple’s EU App Store changes to be available globally.

Writing in his Power On newsletter, Bloomberg’s Mark Gurman reports that Apple is planning on “splitting the App Store in two” to comply with the European Union’s new Digital Markets Act. One for EU countries, where it’ll have to allow third-party app stores and third-party payments, and one for “the US and everywhere else.” Expect the changes by March 7th.


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Tech leaders are meeting with the EU’s antitrust head next week.

Apple CEO Tim Cook, Google CEO Sundar Pichai, Nvidia CEO Jensen Huang, and OpenAI CTO Mira Murati are all on the list to meet with European Commission executive vice president Margrethe Vestager, according to a report from Reuters. We’ll be on the lookout for what (if anything) comes out of the meetings.


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Japan plans to crack down on Apple and Google app stores.

Japanese lawmakers are preparing legislation that requires companies like Apple and Google to allow other app stores or payment processors onto their phone ecosystems.

The bill won’t be sent to parliament until 2024 but would empower the Japanese Fair Trade Commission to fine violators and likely only impact foreign companies, according to Nikkei Asia.


Adobe explains why it abandoned the Figma deal

‘The only way to solve a future competition issue... is to not do the deal.’

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The EU will reportedly crack down on Apple’s Spotify payment restrictions.

Bloomberg says an antitrust order on the anti-steering provisions — which stop music services from pushing subscriptions outside the App Store — is coming next year:

The probe was sparked by a complaint nearly four years ago from Sweden’s Spotify Technoloy SA, which claimed it was forced to ramp up the price of its monthly subscriptions to cover costs associated with Apple’s alleged stranglehold on how the App Store operates. The European Commission homed in on Apple’s anti-steering rules in a formal charge sheet in February, saying the conditions are unnecessary and mean customers may end up paying more.


Epic CEO Tim Sweeney: the post-trial interview

An interview with Epic Games CEO Tim Sweeney.

Epic v. Google: everything we’re learning live in Fortnite court

The jury has returned a verdict, and it’s in Epic’s favor — follow the updates live here.

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Valve CEO Gabe Newell has to appear in person to defend Steam store fees.

In an update to a federal antitrust lawsuit originally brought on by Humble Bundle owner Wolfire Games in 2021, Newell’s request to conduct a remote deposition in fear of contracting covid has been denied. It’s especially notable as the Valve boss rarely makes appearances, even including our talk about Steam Machines or more recent comments about New Zealand and the Steam Deck.

This litigation lines up as part of a larger battle over digital stores like Steam, Apple, Google, and others and the billions of dollars they pull in by taking a cut of software sales.


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Apple pushes back against the EU’s Digital Markets Act.

The EU Court of Justice confirmed that Apple has joined Meta and ByteDance in appealing its designation under the tough new rules. The European Commission labeled three of Apple’s products as “core platform services” in September.

It’s not been officially confirmed which of these Apple is contesting, but last week, Bloomberg reported that its filings would concern the App Store and iMessage.


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‘I’m on the edge of revolt now that Google’s actions are so punitive.’

That’s a line from Expedia’s senior executive Barry Diller’s strongly-worded email to Google that Bloomberg reported on last month in the ongoing Google antitrust trial.

Diller complained that Google search ads costs ballooned from “$21M to almost $300M” from 2015 to 2019. But just look at these excerpts, written with the most “I said good day!” energy of anything I’ve read in the last year.

What could possibly justify such increases - it’s not as if you’re selling sugar against a world drought. The only conclusion is that Google has systematically moved every lever in its hegemony over search to disembowel our businesses.

We are not owners of horses begging for automobile manufacturers to keep us alive as technology replaces us. We are vibrant innovative enterprises that deliver value for consumers and I believe you are unfairly using your monopoly power to bleed us dry.


Google offered Epic $147 million to launch Fortnite on the Play Store

A ‘contagion’ of defecting developers could have shaved billions off its Android revenue, Google feared.