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US: Apple’s Tim Cook says not all monopolies are bad

 |  December 12, 2019

When is a monopoly not a threat?

Maybe when you’re the monopoly.

We make that statement a bit tongue in cheek, of course. The jury is still out as to whether Apple is indeed a monopoly, and/or whether it has a detrimental effect on its competitors across a slew of verticals at all.

But in the eyes, and the words, of Apple CEO Tim Cook,  monopolies are not inherently bad.

As noted in an interview Wednesday (Dec. 11) with Nikkei Asian Review, Cook said that “a monopoly by itself isn’t bad if it’s not abused.” He said, too, that Apple does not have a monopoly on any of the verticals in which it competes.

Maybe the quotes were aspirational. Again, we are tongue in cheek.

But we’d also bet that Cook’s musings might perk the ears of any number of regulators who are looking into Apple’s activities, or Big Tech’s for that matter.

As has been widely reported, there are a few inquiries ongoing into how Apple’s online app store works with – or doesn’t – other tech firms that offer competing products and services. Among the most visible examples has been Spotify’s antitrust complaint filed earlier in the year with European authorities.

“The question for those companies is, do they abuse it?” Cook was quoted as stating. “And that is for regulators to decide, not for me to decide.”

Critics have charged that the company limits its rivals.

And in another statement, he seemed to nod toward the controversies surrounding companies like Facebook and Google.

“You’re not our product — that’s very clear in our minds,” Cook told Nikkei. “We don’t believe in trafficking your data.”

Cook’s latest comments echo at least some sentiment he shared back in June. In an interview with CBS News, he said that “we should be scrutinized” but said, too, that it does not have a dominant position in its markets.  The antitrust scrutiny by regulators has been proceeding seemingly along departmental lines, while the Department of Justice has been focusing on Apple and Google parent Alphabet.

And in reference to the monopolistic argument, the logic seems to be, via Cook: Platforms can host a range of offerings, and competition can be healthy even if there are dominant players. Developers can grab multiple sources of top line by making apps available in several locations — especially if they don’t want to enter into revenue sharing pacts with Apple (known by some observers as the “Apple tax”).

The various strategies that Apple is deploying to generate recurring revenues was noted by Karen Webster in this space more than a year ago — and so were the strategies by which places like Netflix and Spotify can enroll and activate consumers away from Apple’s app store.

Monopolies, then, are in the eye of the beholder — and whether good or bad is open to debate. But in any event, the regulatory screws of scrutiny are likely to tighten.