Act Now or Apple Will Be the Next Microsoft Monopoly?

Paul Thurrott, iPhone Lover

Could Apple eventually gain monopoly status in one or more businesses, and become as "evil" (or worse) as Microsoft was when regulators went after them in the 1990s? Windows pundit Paul Thurrott thinks so, and thinks it's time to act now before it's too late.

Now, Thurrott is an interesting dichotomy, well-balanced on his Windows Weekly podcast yet Dvorak'ian in link-baiting on his blog. He's pro Microsoft all the way, but has still been unable to find anything as compelling as the iPhone or iPod in their respective spaces. So, assuming we're dealing with the more even handed podcasting and iPhone-using Thurrott, and we're not just biting his baited link, his argument here is this:

until very recently, Apple was the underdog, and they've been the underdog for almost their entire existence. This creates a certain mindset, and under Steve Jobs especially, it's created a very aggressive competitive spirit. This aggressiveness is fine when you are literally the underdog, just as was the case with Microsoft early in its career and it was trying to wrest the PC industry from IBM, Lotus, WordPerfect, and other tech dinosaurs. But once you have a dominant market position, that aggressive behavior--so important for an up-and-comer--isn't just bad, it's illegal. It's just hard to turn it off when it's been part of the corporate psyche for so long.

His answer?

With this obvious comparison of two very similarly belligerent companies--Microsoft of the mid-1990s and Apple of today--in mind, I think the time has come to rein Apple in. To examine Apple's exclusive relationships with wireless carriers. To force it to open up iTunes to competing players, and its iPhone and iPod devices to competing software and services. If we don't do this now, it will only be more difficult in the future. All you have to do is look at Microsoft's never-ending antitrust saga--which has now stretched on for 15 years, involved regulatory bodies on three continents, and gone on far longer than its actual bad behavior--to see why it's time.

The problem?

Apple is not yet a monopoly in any real business. They may own the Mac and the iPhone outright, but those are tiny blips in the big PC space and the increasingly vast smartphone space. Apple likely will never be a smartphone monopoly, and artificially defining a "consumer smartphone" is like defining a "Redmond MP3 player" space and pondering Zune regulation.

Speaking of MP3 players, in that space Apple could arguably be approaching monopoly status, though the market according to Apple themselves is now fading (hence their development of the iPhone). Even if Apple does mathematically hold an effective MP3 monopoly at some point, that's not illegal. Abusing such a monopoly would be, for example forcing Best Buy not to carry Zune's if they want iPods.

Otherwise, much as I (and Thurrott himself) find the notion of the EU's constant browser bashing of Microsoft ridiculous given the advances of Firefox and WebKit (Safari and Chrome), the idea of forcing open what's essentially content management software like iTunes is equally silly. (Note: Not letting iTunes run on Windows is a specious parallel, iTunes is an app, not a platform). What's next, PS3 isn't getting a fair shake so we have to force Nintendo to allow PS3 games and license Mario? Sigh.

As to movies and TV shows, if Big Media would drop their consumer-hostile DRM schemes, then just like MP3 both Apple and Microsoft (and others) could sell unlocked movies and TV Shows that users could play on or move between any device. That's not an Apple problem, it's a Hollywood problem, and consumers should channel that rage appropriately (especially towards legislators who are heavily funded and lobbied by Hollywood to "protect" their content from us evil customers).

Personally, I never left Microsoft because I thought they were "evil" (IE6 aside, of course), I left because I found better device(s) to suit my needs from another company (while Microsoft was being punished by the DOJ and EU, fancy that). If that happens again with Apple, I'll likely move again.

Maybe to Android. Oh, wait, Google is a monopoly in search and online advertising, and is slowly ensconcing themselves on every device and harvesting my data for... what? Maybe they're evil and should be stopped right now as well?

Slope, meet slippery.

Have something to say about this story? Leave a comment! Need help with something else? Ask in our forums!

Rene Ritchie

EiC of iMore, EP of Mobile Nations, Apple analyst, co-host of Debug, Iterate, Vector, Review, and MacBreak Weekly podcasts. Cook, grappler, photon wrangler. Follow him on Twitter and Google+.

More Posts



← Previously

Poll: Is Jailbreak the Answer to App Store Woes?

Next up →

Motorola MOTOROKR S305 Bluetooth Stereo Headphones for iPhone 3GS & iPhone 3G

Reader comments

Act Now or Apple Will Be the Next Microsoft Monopoly?


He has some interesting thoughts but I agree iTunes is just an application. Apple isn't bullying developers and retailers to only develop for the iPhone or only sell Apple modile devices. That's what got Microsoft in trouble with the DOJ (The EU thing with IE is just plain silly IMO). When you stop seeing Zunes and other players next to the iPods at stores then maybe we can worry. Last time I was at Best Buy they had dozens upon dozens of other phones right next to the iPhones as well. As far as I know you can also sync iPods with other software with plug-ins if you really want.

It's pretty hard to prevent a monopoly from arising in the absence of mergers forming one.
To do so requires ex anti facto measures: punishment before any actual wrongdoing.
If you end up becoming a monopoly by user choice (as iTunes is STARTING to be) then steps to preserve the ability for others to enter the online music sales busness are appropriate.
This would include looking clostly at the music industry to assure it remains open to new resellers.
This would also include looking closely at devices to assure they can accept music from multiple sources.
Apple forcing all music installation on the iPhone to go thru their sales engine is pretty close to anticompetitive. There should be no imediment to sideloading music thru USB.

It never ceases to amaze me how many people do not know the meaning of the word "monopoly".
A simple lack of worthy competition is not the same as a lack of actual competition.
There is plenty of competition in every space in which Apple operates.

I agree that Apple doesn't have a monopoly in anything, and I don't see any legal basis for reigning them in. They're certainly evil, though, and have been for a long, long time. I have a friend who delights in reminding me of their "look-and-feel" lawsuits in the 80s, which had the FSF up in arms because the precedent could have made all the GNU software illegal (interesting, since they use it now!). Nowadays we have Apple's App Store policies, some of which could be called evil. But they're not doing anything illegal that I know of, they're just looking out for their profits like any company has to do.

IMHO, this "monopoly thing" is blown out of proportion. Don't you have anything better to discuss?

I hear what you're saying, but Apple is not completely forcing iPhone owners through their sales engine--ripped CDs and non DRM music like my eMusic and Amazon tracks work fine.
That said, I do use iTunes as my music sync solution and have no need to use other media sync techniques.
(maybe we need to start moaning about video DRM. Oy there's a new 'bag of hurt!) ;-)

Apple does not need to be required to support anything, it just needs to be made to quit keeping others from accessing hardware purchased from Appple. Why can't other app stores load to iPhone or other synchronizing/music management software work with iPhone? Apple does not need to support a thing, that's the other software makers' problem. Apple just needs to quit actively blocking their use.

This is one of the worst editorials you have written to date. The last thing Apple needs is more blind followers; stick to delivering the news. I came here for news but now it's just the devoted preaching to the devoted.

Mainly to ICE BIKE i have brought 5 songs of the 11339 songs in my library from itunes ... apple doesnt care where i buy my songs from ... why would i wnat to use another program to load my iPhone when i can just use iTunes and I'm not forced to buy or pay for anything to use it ... your an idiot

Ignoring for now yet another specious console comparison, both you are Thurott are missing the relevant precedents.
The relevant portion of competition law for iTunes is not the Sherman Act, but the essential facilities doctrine. First tested in 1912, essential facilities deals not with a monopoly position, but control over a specific type of bottleneck in a market. Unless you want to argue that iTunes is an indivisible part of both the Music Store and the iPhone, it is at least reasonable to debate that Apple has created such a bottleneck in iTunes.
While in the USA essential facilities usually requires a monopoly position, in both Europe and (I think) Australia only the presence of bottleneck where competitors are denied access is required. I am not saying that iTunes does run afoul of essential facilities in any jurisdiction, but that, the more Apple actively tries to block others, the more likely one of those governments is going to take a long look.

Monopoly in what? B--tching? Sure.
Apple is already evil. Perhaps the most evil of the software giants.

"why would i wnat to use another program to load my iPhone"
Because iTunes sucks (and blows simultaneously) on Windows. Because I hate the interface (why can't it show a pane with the songs in the current play list along with the whole library, among other things). Because it does not do as good a job of managing my library as, say, Media Monkey, just to name a few.
Just because you don't have a reason for not using iTunes doesn't mean nobody else does.

Oh I thought of the most important reason why one might wish to use something other than iTunes to sync with. It does not permit any other programs to sync through it with the iPhone.
Think about how it was in the days of Palm. They gave you a sync program and people like DataViz wrote conduits that worked with the sync program so you could set a folder on your PC for the conduit to monitor and when you change an excel spreadsheet on the PC it was loaded to the phone and vice versa.
With iPhone, the only way for third parties to get data on the phone is by WiFi and on an app by app basis. This is horribly cumbersome and really needs to change. If Apple won't do it somebody else needs to. Oh, wait, Apple has locked out other sync programs.

This isn't the same thing I suppose, but can't you right click on a playlist and "Open in New Window"? You get your whole library and the playlist visible at once.
I also thought there are third party utilities that can let you directly manipulate the media stores on the phone. It isn't perfect, I am just suggesting that there may be alternatives.

how exactly is apple "evil"? is something happening I'm unaware of? Are they comtroling the weather? Holding an oil rich country for ransom? I mean what is it? Or are you one of these bleeding hearts that think anyone who makes a dime in this capitalist society is evil!

i don't understand why everyone is constantly complaining about what they are not allowed to do with the iphone. just jailbreak your phone and you can do literally anything you want to the phone. if you are concerned about warranty status all you have to do is restore the settings through itunes and then take it in and you are good to go.
so in reality the iphone straight from the box and with literally 3 minutes of running jailbreak software you are well on your way to a device that can do anything you want it to (within it's hardware capabilities).

We sell Apple products at my workplace. Apple ain't forcing competitors of our shelves, our customers are (they just won't buy anything that isn't an Apple iPod)
To punish Apple for that would be utterly ridiculous!


It never ceases to amaze me how many people do not know the meaning of the word “monopoly”.
A simple lack of worthy competition is not the same as a lack of actual competition.

Put away your dictionary.
The LEGAL standard is all that applies here. Webster does not get a vote.
Nor do monopolies have to be complete for the government to decide to step in.

Well Itunes software IS Apple's sales platform.
Since th iPhone won't let you sideload music via any other method, it seems pretty blatant to me.
Most other phones I've seen let you treat it like a USB thumb drive.
You can't do that with the iPhone. I don't even know if its possible with various iPod models. It is possible with most third party mp3 Players and other phones I've used.
That was my only point. I don't think Apple has a complete monopoly on anything yet.
But you don't need a total monopoly to run afoul of the laws in various countries. Near dominance is sufficient, especially in the EU.
Its clear APPLE is trying to use the market dominance of the iTunes store to achieve dominance in other areas. I don't think they have achieved this yet, (although 692% of online music sales argues otherwise).


if you are concerned about warranty status all you have to do is restore the settings through itunes and then take it in and you are good to go.

Restore is pretty hard to do on a bricked phone, or one with an internal problem like so many 3G phones had around the 2.0 software period.
In those days you had to stand in line to return your phone because there were so many bricks out there.
Yes, we could all jailbreak. But recommending that we break our warranty to do something we should be allowed to do anyway is a silly form of surrender.

I am getting pretty tired of the "beautiful jail" that Apple is. It is the most closed system I've ever worked in. I am very tempted to go with Windows 7, and I will be going back to my Blackberry. If apple would just make it easier for me to get what I'd want, I'd stay with their stuff. For instance, allow OS X to be VM'd like windows and linux and every other OS. That would make it very happy. But instead, they insist on keeping me in their hardware jail. I'm leaving soon

Granted this article has some points invalidating the notion of Apple having a monopoly it is worth noting a few things about the iPod/iTunes/iPhone/Apple TV ecosystem.
1) Apple's QuickTime + iTunes software can be considered both as applications within an OS and platforms themselves for media playback, content authoring and/or streaming etc.
In the same way the web browser has become a platform in itself -- Microsoft's worst fears of the browser were realized of it making the Windows OS irrelevant as browsers could be cross platform compatible among other operating systems. Also developers could write web applications or even native plugins and extensions like the Google Toolbar, Yahoo Toolbar etc for browsers that given the browsers ability to run on different operating systems you can have the same software for your browser across operating system platforms.
Case in point I was a Microsoft Windows user for a while and had Google Toolbar for IE and Firefox on Windows, then when switching to Mac I got Google Toolbar for Firefox on the Mac.
Similarly media players can be platforms in themselves for delivering media playback etc. Just as a browser can function as an independent platform so can media players. Third party visualizers are available for download for iTunes -- and before Apple bought CoverFlow and bundled with iTunes it could be installed as a plugin for iTunes.
Anytime software can piggyback on top of other software the software that has third party apps piggybacking on it is a platform.
Apple has thwarted attempts to make iPods work with software other than iTunes, and prevent users from running software like iPod Linux on their iPods. Now they are even preventing devices like the Palm Pre from syncing with iTunes to the best of their ability -- a cat and mouse game has begun between Apple and Palm with Palm hacking continuously into iTunes and Apple closing the holes allowing Palm to do so with future iTunes updates -- as Apple updates iTunes Palm updates its Web OS on the Pre to sync with new versions of iTunes.
It is ironic that Apple uses some open source code in Mac OS X but keeps the kernel closed and proprietary so it is not an open source operating system even if it can run open source software and works with some open source technologies it is far from it.
I too am tired of Apple's lock-in. If I ever do get another iPod (my latest is iTouch 2nd gen) or an iPhone I will hack it to run Linux am tired of running only apps Apple thinks I should be permitted to run.
Otherwise I will leave Apple and invest in hardware products that come with Linux.

other than the iphone which is perhaps the best iphone jst becos others are crap the rest of apple products are a pile of shit. only gay people use them

@icebike you would have to be a complete and utter retard to brick your phone. or somehow have some cataclysmic event happen to your computer in the 3 minutes that it takes to jailbreak. it's the simplest process i've ever seen.
and if that's a silly form of surrender then i'm not sure what marching lockstep to the beat that apple provides you with is. certainly not rebellion. in the end do whatever you want to do but don't blame apple for locking you in a prison in which the walls would take 3 minutes to obliterate rendering you completely free to do as you wish. and you are not going to void your warranty as i said you can do a restore from itunes and everything is as good as new.
hell there are even apps in Cydia that will keep track of the jailbroken apps you have so if you have to restore you won't completely lose track of what apps you have on your phone.
so, icebike, hold up your white flag and walk the perimeter of your self imposed prison and keep repeating to yourself that to jailbreak is a "silly form of surrender" while believing you are doing all you can to make the app store everything it should be.