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Is Apple Considered A Monopoly?

Is Apple Considered A Monopoly?

Technology

Apple street sign at night

Recently, the sentiment that Apple is a monopoly has been gaining traction. The following points could explain whether Apple is a technology monopoly company.

Monopoly is defined as a single seller or producer that excludes competition from providing the same product or service in the market. In other words, the company has complete control over its industry and holds significant market power. This economic term often refers to large companies that exploit their influence to control the market and maximize profits.

Apple, one of the world’s largest tech companies, has extended its business to multiple sectors. It has dominated the smartphone industry for years since the iPhone was developed and launched by Steve Jobs and his team in 2007. According to CNET, in 2022, Apple took the first spot in the fourth quarter with 25% of the market share, followed by Korea’s electronics giant Samsung at 20% and China’s  Xiaomi at 11%. Apple’s market share does not significantly differ from those of Samsung and Xiaomi.

Therefore, it cannot become determined whether Apple is a monopoly by solely evaluating its market share.

Apple logo black.svg

However, unlike Android smartphones, iPhones utilize the iOS system, allowing Apple to set up its policy and distribute its products through online and retail stores. Meanwhile, app developers must pay a 30% additional commission fee for all internal sales in the app. Which is considerably high in the industry! Nonetheless, there are some exceptions and nuances to this policy.

Although the commission rate is high, Apple alleges that the App Store policy is essential to maintain its quality and security across different platforms. All apps should follow strict distributing principles, helping to avoid malware deployment.

Apple TV logo

Regarding fees paid by app developers, Apple can become considered a monopoly.

Since Apple is dominant in the smartphone market, app developers have to agree with the commission policy to avoid losing Apple’s large user base. While the major apps can still make a profit, the minor ones that are still in their beta version or have a small volume can hardly make a profit. A US Congressional Report found that Apple exerted “monopoly power” in the mobile App Store market by favoring its apps and disadvantaging its rivals. Moreover, Apple’s supremacy hurts innovation and choices for consumers through increased prices.

iPad

Furthermore, according to CNN, the US Supreme Court opinion notably did not accuse Apple of violating antitrust law in 2019. However, it held that consumers have the right to sue the company for monopolistic behavior because they purchase apps directly from Apple. The lawsuit indicated that Apple’s commission was anti-competitive, which might lead to increasing prices for consumers. Apple argued that it was not a monopoly but a platform for app developers to set prices. Some say if the court allows the case to proceed, it will disrupt the e-commerce market.

Besides smartphones, Apple has a prominent position in the personal computer sector. In the fourth quarter of 2022, Apple shipped 17.2 percent of all PC units in the United States, which was lower than that of its smartphone sales. Compared to the Windows system, macOS is very popular among consumers. However, several companies, such as Asus, Lenovo, and Dell, are more prominent than Apple in the PC area.

Apple developed a reputation for its clean code base regarding source code, environment, and library.

MacBook Air

It developed MacOS, IOS, and the software development platform Xcode. The source codes are unique and can only become run on their systems, but all of these tools are not the solitary choice that the programmers have in hand.

In conclusion, it is somewhat difficult to determine if Apple is a monopoly. Indeed, Apple has power in some industries, including smartphones, PC, and software, and employs its advantages to seek profit. However, it still has several competitors in the above sectors. Whether or not Apple’s practices are anti-competitive remains a matter of debate. However the outcome of ongoing legal challenges will be crucial in securing the answer. Eventually, lawmakers and regulators will decide if Apple is a technology monopoly.

Written by Albert Zhan

Edited by Boyu Yang, Ruizhe Li, Avhan Misra & Luxy Sun

Technology

Is Apple Considered A Monopoly?