Abuse of power problem for Apple?

ant1pathy said:

What does this mean? Unless I've missed it, and there's something in the CarPlay 2.0 portion that means that an auto OEM cannot also roll out Android Auto, then that's up to Google and the car maker to figure it out between them. Big time "not Apple's problem".

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In theory it's a choice.

But whose choice is it? Not the consumers choice.

This isn't about buying an accessory for your car, this is about the combination of your car and your phone.

If all the car manufacturers were consistently onboard with the major manufacturers it would be cool and I wouldn't care. Instead, multiple car companies have indicated a willingness to play favourites.

In the end, the consumer is stuck picking a sub-par vehicle or a sub-par phone based on which combination they prefer. In truth what generally happens then is they just get a subpar experience for using them together (because nobody is picking a car for a particular phone) and it all just sucks overall.

Competition is great; but there's no effective competition when the combination is outside of the end consumers control and influence.

We were approaching a nice-ish standard with Bluetooth, and now we've gone and fucked it all up with proprietary bullshit.

Mark086 said:

In theory it's a choice.

But whose choice is it? Not the consumers choice.

This isn't about buying an accessory for your car, this is about the combination of your car and your phone.

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Right-- and cars are not entirely fungible, and not trivial purchases.

Mark086 said:

If all the car manufacturers were consistently onboard with the major manufacturers it would be cool and I wouldn't care. Instead, multiple car companies have indicated a willingness to play favourites.

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In the past this was extremely common-- those of you who have skipped say 2017-2019 model cars missed some really bad years where you had to be exceedingly careful with companies making some schizophrenic decisions.

BMW/Mini for example were early adopters of the iPod connectivity. Pick an average 2019 BMW or Mini and it would have wired iPhone connectivity for iPod mode only, wireless for CarPlay only, no Android Auto support but if you wanted to use your phone app as a key, that was only supported on specific Android phones and not at all on iPhones (they've since worked around NFC limitations.) It was possible to get into a scenario where you couldn't buy a phone that supported every feature. They were very late to support Android Auto and for reasons not
germane here, I ended up with a Mini that supported CarPlay only after owning a car with AA.

In this particular case, I just could not tolerate the grossly inferior experience and sold the car.

The Korean manufacturers for obvious reasons did the opposite during those years. AA was well supported and they were early with wireless AA (originally only supported on Samsung phones, now universal.

Mark086 said:

In the end, the consumer is stuck picking a sub-par vehicle or a sub-par phone based on which combination they prefer. In truth what generally happens then is they just get a subpar experience for using them together (because nobody is picking a car for a particular phone) and it all just sucks overall.

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Eh, some do. I'm the counter-example in this scenario. It's frustrating because there are niches like that where the competition is exceedingly slim.

Mark086 said:

Competition is great; but there's no effective competition when the combination is outside of the end consumers control and influence.

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This one.

Consumers and even potentially car companies are the ones likely to suffer as what was a nearly settled universal standard (every car gets AA and CarPlay) gets disturbed. Consumers have already lost that choice if they wanted a particular GM model or a GM model that occupies a unique niche was their only real option.

Nevarre said:

It's not the reading from the CAN bus that's technically infeasible, in this case the data acquisition from the CAN bus breaks more of an agreed-upon segmentation that CarPlay would stay within the infotainment-y range of capabilities. The difference here is writing to the CAN bus in more ways-- like exposing HVAC or seat heaters being a trivial example. Still do-able but it's a change in how the car companies would agree to allow Apple to interface with the data.

Apple seems to have solved or claims to have solved the ultra-critical aspects of this-- like reading the raw speed and drawing a speedometer on the screen is one thing, but if an auto-braking alert comes in, that needs to be processed, displayed and acted upon regardless of what the phone is doing and with no added lag-- that has to work with the Apple overlay somehow.

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Yeah, I'm not actually a fan of Apple (or anyone else, for that matter) taking over anything safety-critical. Whether that's general readouts, safety or fault alerts, or taking UI control of e.g. traction control settings. The main advantage of CarPlay 2.0 I see would be casting turn-by-turn directions to something closer to driver line-of-sight (ideally a HUD, but only a handful of vehicles have that capability). Taking over the entirety of the instrument cluster is not really something I want, nor taking over most vehicle settings controls. I'm really hoping that my next vehicle will still have physical buttons for most of the commonly used stuff (bless you Kia/Hyundai for still keeping a decent amount of physical controls, even on your EVs), but that seems like yelling into the wind with how interior design is trending.

Schpyder said:

The main advantage of CarPlay 2.0 I see would be casting turn-by-turn directions to something closer to driver line-of-sight (ideally a HUD, but only a handful of vehicles have that capability). Taking over the entirety of the instrument cluster is not really something I want, nor taking over most vehicle settings controls.

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On my car, the primary instrument cluster has a region where the infotainment is allowed to do an overlay. If you're not in turn-by-turn, the vehicle's built-in nav just passively shows the streets/roads you're on and when in navigation in CarPlay (and AA) that zone is used for turn-by turn. If you were using the vehicle's nav, it would show its turn-by-turn there as well, and throws a warning that "Navigation is active in CarPlay/AA" in that area if you try to use the built-in nav when the casting phone is doing an active navigation. Presumably it could do the same to a HUD, but I don't have that option.

I know that area's overlay is handled by the infotainment computer, because I can do a reboot of the infotainement computer (which also runs vehicle nav) and that section of the screen goes blank while the rest of the instrument cluster is fine. There's no reason why CarPlay can't display to that area, but that does get a lot of safety stuff involved. The car is OK with where and how to draw emergency alerts because it's only allowing specific hand-off of information from CarPlay, and the built-in computer is drawing the arrows, etc. IOW this is a solved problem already without allowing Apple to theme and configure your instrument cluster.

This is news today, the EU announced that Apple could be in violation of the DMA but they have until March 2025 to make a final pronouncement.

Interestingly, the EU brought up possible penalties:

The commission noted that it "can impose fines up to 10 percent of the gatekeeper's total worldwide turnover," or up to 20 percent for repeat infringements. For "systematic infringements," the European regulator could respond by requiring "a gatekeeper to sell a business or parts of it, or banning the gatekeeper from acquisitions of additional services related to the systemic non-compliance."

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Apple revenues last year were $383.29 billion so potentially a fine of over $38 billion.

DMA has been in effect since May 2023.

I don't think they've fined anyone yet. If and when they do, there would probably be some appeals process and failing that some kind of litigation?

There's a problem when you carry a big stick and threaten to use it.

At some point you actually have to show you'll use it, and I suspect they've realized the results of doing that won't be what they want to achieve.

"We're not sure if you're breaking the rules, we'll give ourselves till next year to figure that out and get back to you" isn't confidence inspiring.

Well they warned MS about bundling Teams and apparently made the same point about potential 10% of global revenues.

So they want to collect tens of billions in fines but it's not even clear that the alleged abuses have anywhere near that kind of economic impact.

Punitive damages generally don't have to be sized according to economic damages. The point is to punish and incentivize not violating anti-trust policy.

papadage said:

Punitive damages generally don't have to be sized according to economic damages. The point is to punish and incentivize not violating anti-trust policy.

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Well the EU is accused of imposing damages and fines without even establishing economic damages.

The COC seemed particularly concerned that the EU's upcoming guidance is too lax, allowing enforcement following complaints of potential harms that are unlinked to "actual effects or harm" currently found in markets. On top of that, the EU seemed to be "openly targeting US companies for enforcement," despite "serious concerns" raised by US Secretary of Commerce Gina Raimondo that EU's stricter digital laws would "disproportionately impact” US tech companies.

"There are growing concerns in the US— among policymakers and in the business community—that the Commission is using competition policy to promote a protectionist agenda," the COC said, suggesting that the EU was seeking to update laws to benefit domestic companies over foreign rivals.

"The proposed guidelines raise questions about whether the Commission intends to utilize its abuse of dominance review solely to exercise significant discretionary authority over American companies without training its review on any European companies," the COC said.

Microsoft did not submit feedback, but Google raised additional concerns that, seemingly contradictory to the EC's purposes, the guidelines depart from case law.

According to Google, case law "has reiterated that anticompetitive effects must be more than merely plausible" and "that any doubt regarding the existence of potential effects must benefit" dominant companies.

Google agreed with the COC that the EU risked "lowering" the "relevant standard for intervention" under TFEU, "particularly given the Commission’s position" that "it is sufficient for effects to be 'potential,' that it is not necessary to conduct a counterfactual analysis, or show 'full causality,' or determine whether the alleged foreclosure effects may be due to competitors’ lesser efficiency or attractiveness."

"A finding of anticompetitive foreclosure should, at a minimum, require establishing that the impugned conduct compromises rivals’ ability and incentive to compete effectively in the market," Google suggested.

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This MS Teams investigation was precipitated by Slack owner Salesforce and a German maker of video-conferencing software complaints to the EC.

We have a separate thread for the Teams discussion

I’m ripping myself off from a long post I made on a recent front page article on this, but to me the most concerning part of how the EU is proceeding with the DMA is just how fast they were moving.

A decent comparison for the idea of gatekeepers as a novel economic concept needing regulation is the rise of trusts in the late 1800s. The Sherman Antitrust Act was passed in 1890, and like the EU with the DMA the US started filing lawsuits under it almost immediately. But there was a huge difference in targets. The first Sherman Antitrust case notable enough to get mentioned in the Wikipedia article came in 1893, three years after the law passed. It took until 1906, 16 years after passage, before the government went after Standard Oil, and then another three years for the decree of dissolution to be issued (appeals dragged it out further, until 1911). By contrast, the ink wasn’t even dry on the DMA before the EU declared 22 products by six different companies to be Gatekeepers, and the results from those initial rulings haven’t even played out before they were on to round two.

That’s concerning because gatekeepers are a novel economic theory. That doesn’t make it incorrect, but when you’re treading new ground a certain amount of caution is warranted. You don’t know the outcomes of what you’re doing, so a reasonable amount of humility and caution is warranted. The classic example of antitrust action, the suit against Standard Oil, wasn’t filed until 1906, 16 years after the passage of Sherman. The final breakup order didn’t come down until 1909, and appeals meant it didn’t happen until 1911. And despite that caution, the breakup of Standard Oil still was a major contributor to a market panic that dropped the stock market by a massive 25% and took a full year to recover.

I have no interest whatsoever in arguing against the breakup of Standard Oil, but that’s the kind of consequence you should at least be considering when making such a move even if it’s ultimately justified. I also don’t think any one company in 2024 has the kind of importance to the economy Standard Oil did, but the EU is also aiming a whole lot wider. And history says they’re more concerned with intentions and spirit of the law without being very careful in considering unintended consequences.

My point in all of this? Trial and error is ok, as is easing into this. Start the enforcement at a smaller level and see if things actually get the results you want or if you’re creating another counterproductive GDPR-esque mess. Don’t instantly jump to talk of fundamentally transforming business models and immediately jump to maximum allowable fines of 10% of global revenue (20% for repeat offenders!) and breaking up companies, both of which Margrethe Vestager is using as her opening position. Basically have some humility, allow that you may be wrong and the world doesn’t necessarily work the way you want it to, and give things a chance to transition more carefully from hypothetical theory to the real world.

Horatio said:

We have a separate thread for the Teams discussion

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You posted this as I was writing my above wall of text, but do you think the DMA crosses across enough boundaries that it should have its own thread untied from any particular company/platform?

Chris FOM said:

You posted this as I was writing my above wall of text, but do you think the DMA crosses across enough boundaries that it should have its own thread untied from any particular company/platform?

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Yeah, probably, it would possibly be a soap box thread as well, though the digital nature makes the BF an equally strong fit

Chris FOM said:

That’s concerning because gatekeepers are a novel economic theory. That doesn’t make it incorrect, but when you’re treading new ground a certain amount of caution is warranted. You don’t know the outcomes of what you’re doing, so a reasonable amount of humility and caution is warranted. The classic example of antitrust action, the suit against Standard Oil, wasn’t filed until 1906, 16 years after the passage of Sherman.

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I dont disagree with your basic thesis that ‘go slow’ is likely preferable. That said, I do think the sort of platform power that gatekeepers represent is categorically different than the type of power that Standard Oil represented. Oil is totally fungible. The day you break up Standard Oil, consumers of oil can use anyone’s oil. With gatekeepers, the lock-in effect is much harder to undo.

Will organizations stop using Teams and move to Slack after their IT team has deeply integrated Teams into their workflows? That seems pretty unlikely to me - Teams is sticky. Even if Apple completely leveled the playing field between the App Store and competing App Stores (user gets to pick their App Store at start up) would most users move to another app store? Not after they’ve massively invested in apps on Apple’s store they won’t.

So even if the EU were to make massive punitive moves to level the playing field tomorrow, the results would take 5+ years to work their way through the market. I’d argue that effect makes gatekeepers very different from things like Standard Oil.

I’m still with you that going a bit slow and having humility about unknown ways the market may react is warranted. But waiting 16 years like they did with Standard Oil doesn’t make sense for gatekeepers.

wrylachlan said:

I dont disagree with your basic thesis that ‘go slow’ is likely preferable. That said, I do think the sort of platform power that gatekeepers represent is categorically different than the type of power that Standard Oil represented. Oil is totally fungible. The day you break up Standard Oil, consumers of oil can use anyone’s oil. With gatekeepers, the lock-in effect is much harder to undo.

Will organizations stop using Teams and move to Slack after their IT team has deeply integrated Teams into their workflows? That seems pretty unlikely to me - Teams is sticky. Even if Apple completely leveled the playing field between the App Store and competing App Stores (user gets to pick their App Store at start up) would most users move to another app store? Not after they’ve massively invested in apps on Apple’s store they won’t.

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This, plus the DMA enforcement is at least aware of the potential multiplicative effect of ecosystems.

wrylachlan said:

So even if the EU were to make massive punitive moves to level the playing field tomorrow, the results would take 5+ years to work their way through the market. I’d argue that effect makes gatekeepers very different from things like Standard Oil.

I’m still with you that going a bit slow and having humility about unknown ways the market may react is warranted. But waiting 16 years like they did with Standard Oil doesn’t make sense for gatekeepers.

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These companies are moving at a speed that Rockefeller, Vanderbilt and Carnegie probably couldn't even dream of. The EU does need to show significant caution, especially as they propose fines based on global revenue and not EU revenue, but the EU wasn't particularly fast to address the threat of Apple's ecosystem establishing multiple closed markets and Apple building tendrils reaching far into huge numbers of business verticals that differ greatly from their original core desktop PC business. The time for starting regulation to ensure Apple doesn't end up as the "In the future all restaurants are Taco Bell" single company that dominates most computing-like and many media-related verticals is probably already in the past and threading that needle between speed and caution is hard.