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These days, Apple gets a lot of extra scrutiny from the government. I'm okay with that. Apple is a big, scary company that could, if so inclined, do a lot of damage to a lot of industries. An 800 lb. gorilla gets more scrutiny in a china shop than a goldfish. My problem is when Apple is punished for actions common to the industry while all competitors are given a free pass to do the same things, and worse. I offer two quick examples:

Last week, the big news was that the FTC hit Apple with a $32.5M ruling. Apple has to refund in-app-purchases made by kids without the knowledge of the parents. I chose not to write about it because the amount is trifling, and Apple has already dealt with this matter. I also find it offensive that any corporation should be held responsible for parents not properly supervising their kids. I would love to just dismiss this as yet another example of the government overreaching. But there is something more to the story. From Consumer Reports::

Google Play Store lets your kid spend like a drunken sailor

On Jan. 17, Apple signed a consent order with the Federal Trade Commission to refund at least $32.5 million to peeved parents whose kids had shopped unsupervised in the iTunes App Store. According to the FTC, Apple failed to warn parents that by entering a password, they weren’t just approving a single in-app purchase but were also letting their children make unlimited purchases for 15 minutes without further parental permission.

It turns out, the other giant app store, Google Play, also offers unsupervised children an opportunity to shop unfettered by parental oversight—and for a full 30 minutes.

I don't know the policy of other app stores. It seems as if no one cares about the policies of other app stores. When it comes to government scrutiny, Apple's app store is the only one that matters. This is more than a little problematic. Google Play, a store with even greater reach, has a policy that is at least twice as bad. However, they are allowed to fly under the radar. To abuse another metaphor, Google is driving even faster than Apple, but Apple is the one that gets the ticket. I question whether it is even an offense worthy of a ticket. Apple has been dealing with this issue for a year, while everyone else is given the thumbs-up. 

The second example is one that is still in progress. I am referring to the ebooks case brought by the Department of Justice against Apple. The initial ruling is that Apple is guilty of antitrust, and has been slapped with an unprecedented amount of oversight for this type of infraction. Even if Apple was guilty of all charges, the punishment does not fit the crime. I will continue to reserve comment on the matter until it is closer to final resolution. 

I will note that this is a unique case for two reasons: First, Apple has been convicted of antitrust without being a monopoly in the area of conviction. In fact, they have never been ruled a monopoly in anything. However, their chief competitor is a de facto monopolist in the area of the complaint. Second, Amazon is actually the one with monopoly power, exerting antitrust behavior in ebooks. They bristled when Apple threatened their monopolistic behavior, and complained to the DoJ. The result is that Apple, the underdog, is convicted of Antitrust, while the real monopolist gets a free hand without oversight or competition. 

So why is this happening? I don't know. My only guess is that the government fears Apple. While Apple is far from the marketshare leader, Apple is, far and away, the mindshare leader. They make the products that everyone wants, even if they are not the products everyone can afford at the moment. That is a type of monopoly, and one that the government cannot fight. Competitors are appealing to the government to slow down the Apple machine because they can't do it themselves. They can't beat Apple at the cash register, and for the hearts and minds of consumers. Since the marketplace is closed to them, they appeal to the legal system. 

The government is treating Apple like the mindshare and heartshare monopolists they are, but that can never be acknowledged. Therefore, they are doing what they can. Apple has a lot of money and power outside of the control of the government. They are a market force unto themselves. The flattering truth is that where it really matters, Apple's competitors don't. We live in interesting times.

David Johnson

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