Thread by @matthewstoller

1. So something extraordinary happened today on the anti-monopoly front. And not where you'd expect. Not in Congress. Or at the Federal level. Or in Europe.

But in Arizona.

Some legislators stood up to Apple and Google. And they won. This is the story.

mattstoller.substack.com/p/apple-threat…

2. Google and Apple are monopolies who control what is on your phone. Together they have 99% of the smartphone market. And they both charge high prices to app makers for the right to sell through their app stores. Apple made $64B from this tollbooth. cnbc.com/2021/01/08/app…

3. It’s basically impossible to sell mobile apps without going through the Apple/Google app stores, so they charge high prices - 30% of the take. Credit cards charge 2-3% to a merchant for access to a payment network. That's ten times Visa/MC, and Visa/MC are really greedy!

4. But it's worse than just high prices. There is a climate of fear among app makers, who are terrified of Apple, as @benthompson has discussed. stratechery.com/2020/rethinkin…

5. Finally, the House Antitrust Subcommittee weighed in and called Apple a monopoly. Then a few firms had had enough. Epic Games filed suit against Apple for antitrust violations, and @dhh took on Apple publicly. mattstoller.substack.com/p/epic-games-k…

6. Steve Jobs used the app store as a monopolization vehicle. In 2013 docs became public showing he wanted to force exclusive use of the app store payment system on app developers to stop customers from considering switching from the iPhone to Android. mattstoller.substack.com/p/apple-threat…

7. In February, North Dakota Republican state Senator @SEECGUY introduced a bill with a few colleagues to bar Apple/Google from maintaining their app store monopolies. This bill would force them to let app makers use other payment systems. Boom, right? mattstoller.substack.com/p/apple-threat…

8. Then the lobbying from Apple started. The floodgates opened. Fear, uncertainty, doubt, with six lobbyists talking full time in a small state legislature, just from one company. mattstoller.substack.com/p/apple-threat…

9. There were the threats. North Dakota has a total budget of $8B. Apple has $200B of cash sitting in offshore bank accounts. It spends $1B just on legal costs every single year.

You really think a state can bring a titan to heel? mattstoller.substack.com/p/apple-threat…

10. North Dakota state Senators caved. Apple and Google won. Then the fight went to Arizona. Republican @recobbforazrep sponsored the bill, and she got it through her committee and on the floor. Weirdly, the problem was... progressive Democrats! mattstoller.substack.com/p/apple-threat…

11. Over and over, progressive Democrats used the most extreme libertarian arguments. Don't interfere with private contracts, antitrust is a Federal issue, regulating these businesses is unconstitutional, Apple's not a monopoly, etc. Weird fringe stuff.

https://twitter.com/birnbaum_e/status/1367170065053986818

A Democrat named Cesar Chavez, who has both ‘immigrant’ and ‘AZLGBTQ’ in his twitter biography, lavished praise over libertarian lobbyists at the Goldwater Institute and the American Legislative Exchange Council. ALEC lets corporations vote on its agenda!! mattstoller.substack.com/p/apple-threat…

13. Conservative Republican Regina Cobb talked approvingly of the @davidcicilline Democratic House Antitrust Subcommittee report on big tech platforms. GOPers talked of their experience with monopolies (one ex-retailer talked about competing w/Home Depot). mattstoller.substack.com/p/apple-threat…

14. State legislators wrestled with priorities. Is this really a good priority for the state? Do they really want to pick a fight with these giant multi-nationals? Is this really an issue they want to have to learn about? Do they want to spend money fighting a $2 trillion firm?

15. And yet, enough of them did believe in taking a stand. The bill narrowly passed the Arizona House, 31-29, on a party-line basis. All but one Republicans voted for it and all but one Democrat voted against it.

16. It still has to go to the Arizona Senate, and the Governor's office. Apple has hired the Governor's former chief of staff - Kirk Adams - to lobby for them. But the fight, and win, will resonate nationally. protocol.com/Policy/apple-g…

17. As my colleague @Pat_Garofalo notes, there is now a similar bill in Minnesota, introduced by a Democrat and a Republican. minnesotareformer.com/2021/03/03/min…

18. The floodgates are open, with waves of anti-monopoly bills on app stores: Hawaii, New York, Massachusetts, Illinois, etc. There are app makers everywhere, and they are sick of being controlled. @SenatorSara6 @RepAndyVargas @RachelMayNY @stanleypchang
politico.com/news/2021/03/0…

19. Why has big tech won for so long? "A lot of it is just fear," state Senator Davison in North Dakota told me. Apple implied, but did not say it outright, that it might have to leave North Dakota if the bill passed. That's scary. accc.gov.au/focus-areas/in…

20. Fear is contagious. But so is courage. All over the country, the world, we're seeing courage in the face of corporate power. That's what happened when Australia stood up to Facebook. And it's what happened today, when Arizona stood up to Apple/Google. mattstoller.substack.com/p/apple-threat…