Market definition Flashcards
Is the App store of Sierra not an aftermarket where consumers are locked in?
1) There is no lock-in because consumers who purchase our smartphone are fully aware that they are entering a ‘walled garden’. A purchaser is choosing between different ecosystems
2) There is no lock-in because consumers are not obligated to stay within the ecosystem of the smartphone. If they don’t like it they can switch to another.
3) Even if there is evidence of customers not switching, this is not evidence of any lock-in. The control of the App Store is a selling point. It is the reason why customers chose to buy the smartphone. They simply prefer the ecosystem compared to others.
4) There is no lock-in because users and developers multi-home across devices and therefore have other alternative routes. For example, most users also have a personal computer or a tablet.
There are no alternatives to the App Store on the same OS. Does this not mean that Sierra is a monopoly with its App store.
Even if there are no alternative app stores on its OS this does not mean that Sierra has a monopoly with its app store.
1) There are alternatives to the app store within the ecosystem.
The app store competes directly with direct distribution by developers via the internet. For example, PWA’s offer an equal experience and allow developers to create a single display between different devices.
2) There are alternatives to the app store outside the ecosystem.
This isn’t the ’90s,” a time when most relevant consumers had a single computing device and were effectively locked into whatever computing platform they chose. Most smartphone owners instead have “concurrent ownership of a boatload of devices” like desktop PCs or Macs, laptops, consoles, or non-iOS tablets. Multiple devices are much more the norm.
Outside the Defendant’s mobile device ecosystem, the App Store competes with other app distribution platforms on different devices: other smartphones (including alternative OSs and app stores), smartwatches, fitness trackers (wearables), tablets, speakers, laptops, personal computers, smart displays, smart TVs and game consoles.
If we use the SNNIP test, and increase the price of the distribution of apps on the App Store, this will not lead to a substantial amount of users and developers moving away to another ecosystem, and therefore other alternative routes are not included in the market definition? A narrow market definition is justified.
0) In the first place, the SSNIP test is not the only method available to the authorities when defining the relevant product market. In the second place, the authority is required to make an overall assessment of all
the evidence and there is no hierarchy between the types of evidence that one can rely upon
1) In a digital market where zero price mechanics are present, there is the consensus that one needs to not focus too much on the increase of price aspect. Others indicators such as decrease of quality are more suitable.
2) We have to include the reinforcing mechanics of negative indirect network effects. A small raise in price or any other factors such as decrease in quality can have a larger impact on both sides moving away than one initially imagines.
What is your opinion regarding the right market definition?
1) A market definition that is solely focussed on distribution on the app store on a specific OS is too narrow.
2) We submit that other alternative routes of distribution must be included in the market definition.
3) the relevant product is the transaction between the developer and the users.
Is market definition still necessary?
1) It is a legal requirement set out in the case law.
Reference can be made to the statement of the Court of Justice in Continental Can and the definition of dominance in United Brands.
It can therefore even be a ground for annulment as been the case in the General Court judgement in Servier.
2) It provides needed economic context. Dominance cannot be assessed in the abstract, and must be situated on a specific market.
3) Even in the digital age market definition remains relevant.
Does this not contradict with the assessment of the Commission in Google/Android ?
1) The commission’s decisional practice has been anything but constant. In merger decisions of Apple/Shazam and Apple/Beats it did not place competing mobile operating systems and app stores in separate relevant markets.
In Apple Beats the Commission stated that “the iOS operating system is not the only platform on which music streaming services can offer their services.” and included other operating systems when calculating Apple’s iOS operating system market share.
2) In Google Android, Google was held to have a market share of 90% in the market for licensable smart mobile operating systems. Apple iOS was held outside the relevant market. This would make sense from the perspective of original equipment manufacturers. From the perspective of developers and users it would however ring false.
3) It would be counter-intuitive for many to say that there is no competition between for example Apple’s App Store, Google Play and other app stores. In particular in the context of high competition between ecosystems. In the eye of consumers iPhones and Android-based smartphones are pretty interchangeable, particularly as regards the higher-end Android phones that started to compete in price range of iPhones. Consumers will continue to look for the best mobile experience even if that entails a change of the OS.
