"We must also fight inflation by improvements and better enforcement of our antitrust laws and by reducing government obstacles to competition in the private sector."
No, that was not (yet) a quote from the State of the Union (SOTU) address President Joe Biden delivered late on Tuesday. It's from then-President Carter's 1979 SOTU speech. But the ability of competition to combat inflation is a timeless truth. It took more than 40 years before a POTUS would bring it up again in a SOTU address. Here are the two most important competition-related takeaways from the 2023 State of the Union speech:
"Look, capitalism without competition is not capitalism. It's extortion. It's exploitation."
"Let's finish the job. Pass the bipartisan legislation to strengthen antitrust enforcement and prevent big online platforms from giving their own products an unfair advantage."
There were parts of the speech that drew a more enthusiastic reaction from Republicans, but also some that were highly controversial. There definitely is bipartisan support for the Open App Markets Act (OAMA), which wasn't mentioned specifically but matches the definition of "bipartisan legislation to strengthen antitrust enforcement" more than any other because of a 20-2 Senate committee vote in its favor.
It's a pity that the OAMA wasn't passed into law during the last term, despite near-unanimity at the committee level. As an app developer who complained about Apple and Google, I'm grateful to the Biden Administration for putting it back on the agenda, such as through a recent Department of Commerce report and now, especially, the mentioning of antitrust in the SOTU speech.
In order to build bipartisan consensus, however, it is suboptimal to call for "legislation to strengthen antitrust enforcement" as House Republicans have made it very clear they do not want to give more powers to FTC chair Lina Khan (and I, frankly, believe that what she is doing in the Microsoft-ActivisionBlizzard context does raise concerns). The way I view the OAMA is that it actually has the power to resolve certain issues through legislation. It's not about a full employment program for competition watchdogs. It's about producing positive effects, which ideally should even obviate the need for certain investigations and government lawsuits. That's what everyone should focus on in Washington.
The App Store problem is not a matter of opposing capitalism; it's about fighting neofeudalism, a tyranny, or to quote that SOTU speech, the problem is one of extortion and exploitation.
If Apple makes the rumored "iPhone Ultra" because some of its customers will pay sky-high prices to just own the most expensive iPhone, that's capitalism. I personally prefer Android (I used an iPhone as my primary phone for a few years and then remigrated to Google's operating system). But I have no problem with other people paying whatever they want to pay for the iPhone Ultra. Any money that Apple and other companies make that way is rightfully theirs. It's just that Apple must be prevented from exploiting and tyrannizing app developers. By the way, the previous post provided an update on App Store antitrust matters in Brazil and the UK.
On the subject of preventing the mobile gatekeepers from abusing their market power, let my refer you to two other websites:
Stratechery (Ben Thompson) has identified Apple's App Tracking Transparency (ATT) rules as one of the "Four Horsemen of the Tech Recession." (Early-stage venture investor Ben Gurevich has previously explained the impact of ATT on the wider economy, beyond the technology industry.)
I strongly recommend the latest Jammin'Digital podcast. Evelina Kurgonaite (who separately from this here runs the Fair Standards Alliance) interviewed Microsoft's antitrust VP Rima Alaily on the "new regulatory environment for digital." In that interview, Mrs. Alaily says Microsoft generally favors stronger competition enforcement in areas where there are identifiable problems, but she encourages making a case-by-case distinction between ecosystems like Windows, where most of the money goes to those who build products and offer services on and around a platform, and others where there are issues of leveraging market power in one field to gain an unfair advantage in another, or tying (imposing unfair terms and conditions).
They also touch on Microsoft's acquisition of Activision Blizzard King and how that one could make a contribution to efforts to open up the mobile app market (see Microsoft plans to "shift consumers away from the Google Play Store and [Apple] App Store" leveraging Activision Blizzard titles and New public statement positions Microsoft as the Gorbachev of app store governance, contrasting starkly with Apple's hermit kingdom and Google's fauxpenness).
That interview fits quite well into the context of distinguishing between capitalism and exploitation. And I like the part about a large player being mindful of the impact of its actions and decisions on the economy at large, which presumably never once crossed Apple's mind in such contexts as ATT...
