What’s wrong with Apple One’s bundling?

Editor’s note: This article is from Tencent Technology

a>, reviewer: Jiao Han.

According to media reports, Apple’s new bundled subscription service Apple One will give consumers the opportunity to try out multiple Apple services and may save some expenses. But not everyone is celebrating the release of this new package, Apple Music rival Spotify is the case. Soon after Apple announced the launch of Apple One last Tuesday, Spotify criticized the bundled subscription service, calling it “anti-competitive.” Spotify calls on regulators to carefully review Apple One.

Apple has faced some antitrust scrutiny before: the popular mobile game “Fortnite” was removed from Apple and Google App Stores, and developer Epic Games is currently suing Apple and Google in the United States, claiming that these two companies operate There is market monopoly in the application store. Google and Apple said that “Fortnite” was removed because it violated the app store policy, and Apple also counterclaimed Epic Games.

Following complaints from music service provider Spotify and e-commerce platform Rakuten, European regulators announced in June this year that they had launched a formal antitrust investigation into the in-app purchase policy of the Apple App Store and the Apple payment system. In response to an investigation conducted in Europe, Apple stated that it was “deeply disappointed” to see the European Commission proceeding with an investigation based on “a few company baseless complaints.” Apple said, “These companies just want to ride a ride and don’t want to follow the same rules as other companies.”

When talking about the Apple One bundled subscription service, Spotify said: “Apple once again used its dominant position and unfair practices to put competitors at a disadvantage and deprive consumers of the benefits by supporting its own services.”

Spotify said that if it is not controlled, Apple’s bundling services will harm the interests of competitors and may limit consumer choice.

But Apple said that users can still “discover and enjoy alternatives to every Apple service.”

“We launched Apple One because it is of great value to customers andIt is an easy way to get all Apple subscription services,” an Apple spokesperson said in a statement. “We will recommend the Apple One plan to you based on the number of subscriptions you already have, and it will save you the most money. It is perfect for those who like our services and want more services with less money, especially for home users. In addition, some of the services included in Apple One can also be used on non-Apple devices, and you can cancel at any time. “

Legal experts say that Spotify opposes Apple One because it has reason to believe that by bundling Apple Music with other Apple services, it is easier for consumers to choose Apple Music than Spotify and other music services. Individual packages for Apple Music and Spotify start at $9.99 per month (both companies also offer student packages for $4.99), while the basic package for Apple One starts at $14.95 per month, which also includes two other subscription services and 50GB iCloud storage space. Therefore, by bundling services, consumers only need to spend an extra $5 a month to get three Apple services.

Some legal experts believe that Spotify’s allegations may be legal enough to attract the attention of antitrust regulators. But the anti-monopoly law is too complicated, and it will be difficult for regulators to win this war.

Christopher Sagers, a law professor at Cleveland State University, said: “In Europe and the United States, there must be a theory of liability, and monopolists may be sued for bundling different services together. .” “But it’s very difficult–especially according to U.S. law, it is extremely difficult to prove that binding is illegal.”

Is there anything wrong with bundling?

Maurice Stucke, a professor at the University of Tennessee School of Law, said that from the perspective of bundled services alone, in order to win antitrust lawsuits, one must first prove that any one of Apple’s bundled services possesses a considerable amount of service. Market share (maybe more than 30%). Stocker added that because users can still purchase Apple’s services separately, regulators need to further prove that Apple’s bundled service pricing is so attractive that consumers will pay for them even if they don’t need all the services.

This view believes that in this case, consumers will no longer be willing to buy services from third-party companies.

Based on this analysis, the lawsuit against Apple may not be successful. Although Apple has not announced the number of users of all services, experts believe that it is unlikely that any one of Apple’s bundled services will have a large enough market share. As for the second point, consumers can still purchase Apple’s items separatelyServices, if they don’t actually want all of them, then the savings of a few dollars may not be enough to make them have to buy bundled services, Segers said.

Since Apple did not require consumers to purchase bundled services, Segers said the court is more likely to see Apple One as an example of price competition, and this is not illegal.

Segges explained, “It’s not that you are making people buy more things, but that you are making your products cheaper so that people will only choose them.”

The huge advantages of Apple’s iOS

Apple’s huge iOS platform runs on nearly 1 billion mobile devices around the world. Compared with other application developers, this gives Apple a natural advantage: Apple can pre-install its own applications on its own devices. Legal experts say that by providing bundled services, consumers can save money on pre-installed app services, and Apple can make it easier and more attractive for consumers to choose their own services than install competitor apps.

Ketan Jhaveri, co-founder and president of legal technology platform Bodhala and former U.S. Department of Justice antitrust attorney, said, “In the environment of Spotify, because Apple controls the iOS system, it provides these services The installation package will make it easy for users to use Apple Music services, which will interfere with the streaming media service market.”

This statement can be traced back to the US government’s antitrust case against Microsoft in the late 1990s. At that time, Microsoft was accused of making it difficult for consumers to use other companies’ browsers due to the pre-installed IE browser on Windows devices. The judge found that Microsoft monopolized the personal computer operating system market and its actions harmed the interests of consumers. Microsoft agreed to reach a settlement agreement that restricts some of its actions that exclude competitors.

But Apple may have a strong line of defense. It might say that its iOS platform is smaller than Google’s Android platform, while people can still easily download Spotify from the Apple App Store.

Apple has another possible defense: bundling is good for its customers.

Lori Malm, Apple’s service director, said at the press conference last Tuesday, “We hope that everyone can easily discover and enjoy “Apple services,” and “Apple One can serve the entire family. Everything is provided, and the price is incredible.”

Javiri said that in the United States, the view that something can save consumers money often succeeds in avoiding antitrust cases. This is an argument that can win everything. If it is better for consumers, then everything is feasible. “

Broader concerns about large technology companies

As people worry about siliconThe strength of Gu’s large technology companies, in many cases, the antitrust review of these large companies is mainly focused on their ability to use their own huge platforms to place their own products and services above other companies.

For example, at a congressional hearing in July this year, Amazon CEO Jeff Bezos was asked whether the company used data provided by third-party sellers on its platform to Private label product offering decisions-this is a key question about how the company competes. Bezos admitted that the company may have such behavior.

The U.S. Department of Justice’s investigation of Google also included whether setting Google search as the default search engine for Android devices would be detrimental to other search engines. Google said it is working with investigators to focus on “providing services, helping consumers, supporting thousands of businesses, and increasing choice and competition.”

“These are all potential concerns about self-preference,” said Stocker of the University of Tennessee, who is also the co-author of “Excessive Competition.” “You want them to innovate, but once they start to compete with others on their own platform, they will have the motivation to benefit themselves and disadvantage their opponents.”

In recent years, antitrust claims in the EU have been more successful than in the United States, which may explain why Spotify is still there so far.

Javiri said: “The European Union has become the dominant antitrust agency.” “They have a subtle point of view: If you drive away all your competitors, it will ultimately be bad for consumers.”