Good News that Makes Me a Little Bit Mad

Posted: August 2nd, 2009 | Author: | Filed under: Business, Technology | Tags: , , , , , | 5 Comments »

The FCC is investigating Apple’s decision to disable third-party iPhone apps that let users access Google Voice from their phones, and to reject Google’s own application providing the same service. At first, most tech commenters were eager to exonerate Apple by blaming it all on Big Bad AT&T;, who, as a telecom provider, obviously have a competitive reason to block any VOIP technology.

But as the FCC letter to AT&T; points out, AT&T; has no problem letting users access Google Voice over AT&T;’s network when they do it on a BlackBerry. As the FCC’s decision to send a letter to Google too highlights, there are legit fears of Google from Apple’s side as well: Google has its own phone, where it gets to engage in its own application cherry-picking.

Now Apple, who obviously don’t have anything approaching a monopoly on handsets, can’t be accused of monopolization (using market power to eliminate competitors) as Microsoft was a decade ago. AT&T;, if it turns out they were involved, could be accused of using market power over networks/connectivity that way. What Apple would be on the hook for is colluding with AT&T; in a way that bars competition. Even though it’s clear that banning Google Voice bars competition–ie VOIP competing with AT&T;’s network–it’s unclear to me whether that competition threatens Apple directly. Google, broadly, poses a threat to Apple, but this specific feature might not if it improves the appeal of the iPhone. I don’t know enough about the part of antitrust law that covers collusion (as opposed to the section covering monopolization) to know if the colluding company must be enhancing ITS OWN market power/eliminating ITS OWN competition to be guilty. Commenters, please help out?

On the whole, however, I’m glad the FCC is looking into it–that’s what antitrust regulators are for. What upsets me is that the regulators seem disproportionately inclined to take on cases of companies that upset consumers, where it’s clear how the man-on-the-street is negatively affected by the practice at hand. So because most consumers like Google, hate AT&T; and could care less about Apple, this case makes sense to the Feds.

Meanwhile, the Feds do not bite as often at companies who might be violating anti-trust law in a way that restricts the market at either a more abstract, or simply a less consumer-facing way. Consumers love Google and resent/mistrust the big names in paid content, so the Feds have, until this administration, overlooked the fact that behind the screens Google is establishing a sealed monopoly of online data that prices out whole sectors of content creation, whether that means new web-based news organizations or music, or book or film distribution channels, and impairs the monetization capacity of other sectors that might one day move online.

If the laws bar restrictions on competition (which they do), those laws need to be applied indiscriminately to all companies not only because that’s what rule of law means but also because the unchecked power of companies we like now may prevent the creation of companies we would like tomorrow.

5 Comments on “Good News that Makes Me a Little Bit Mad”

  1. 1 Damian said at 2:24 am on August 4th, 2009:

    I agree with you about the consumer facing bias – but disagree about why.

    I don't think its because of consumers likes or dislikes of google, apple and AT&T.;

    That mobile app stores, as currently set up, are accepted at all amazes me. To develop a product and than charge anyone who wants to develop software for that product and/or a meaningful use of the internet on that product AND retain the right to refuse people the right to develop software for that product more or less at a whim has never been acceptable in the past.

    Can you imagine if all software made for the Mac had to be pre-approved by apple and pay them royalties? I think this is the element that threatens consumers and the FCC have probably been looking for a way to challenge that for a while.

  2. 2 Damian said at 2:24 am on August 4th, 2009:

    Sorry that comment was a bit illiterate, its early here.

  3. 3 Preppy McPrepperson said at 9:14 am on August 4th, 2009:

    Well, yes the mobile app stores are legally highly suspect and need to be investigated. That'd be the 'good news' part of this post.

    But the illegality of the mobile app stores doesn't tell us anything about why other illegal things that are not consumer-facing get off the hook.

    I maintain that the FCC seems to think its job is to focus on consumers. You said you have another theory about why that is, but you haven't articulated it. Please do so?

  4. 4 Damian said at 9:48 am on August 4th, 2009:

    What I took issue with was your view that they were taking this case on because of the popularity of the companies – which i don't buy into in this case.

    As for the consumer angle – i'm not sure. Most i-phone users are famously happy with their handset and everything produced by the company that makes it.

    I think the reason this case is being pursued over others is perhaps because it is simpler. Though the monopoly angle is, as you say, hard if not impossible to prove and the collusion is dubious the "moral" case is fairly easy.

    Most people could understand that allowing companies to randomly block you from installing software on their products that they decide they'd rather you don't have is not a very good idea.

    The case with google is a little more complex to explain, though i'd argue both are equally important/unimportant to consumers.

  5. 5 Preppy McPrepperson said at 9:55 am on August 4th, 2009:

    But the "moral case" is inherently premised on consumer perception/opinion. What I'm arguing for is an antitrust law that doesn't pursue the moral case at all, but pursues the business case whereever it can be found.

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