579: Use Your Words

54:31In the 90s, people who weren't alive then or weren't involved in the tech sector do not realize how dominant Windows was at that point. Windows was everywhere. Everyone had a Windows computer, right? This is not saying raise your hand if you have an iPhone. This was who here has a smartphone, which is getting to my earlier point, which is like, look, everyone has a smartphone. He didn't even ask them to raise their hand. He just said, I assume everyone in this room has a smartphone. I agree. I think everyone in the room did have a smartphone because it's just something that everyone has to have.

55:01And another point from the podium, he said roughly seven out of 10 smartphones are iPhones. So they went from 65 percent of US market share to the seven out of 10 number, which is what they were saying. Well, in the performance mark, smartphone market share or whatever, Apple has even more. Right. Still kind of fuzzy thinking from my point of view. It's like, OK, well, is there some percentage of market share you need or is it not about market share? is about how much money goes through the thing or is it just about the ability to exclude competition and control prices this will all be hashed out in the the court case but i feel like just from the the day of dropping this complaint it's not clear to me that the government has a like a bumper sticker they can put on that says here's why apple's a monopoly other than like everyone has a smartphone apple makes a smartphone something something samsung Google monopoly.

55:53Yeah, I don't. It's hard for me to not get distracted when I read this complaint or the various coverage of it by little details of like, wait, that doesn't sound right. Or wait, that shouldn't be illegal. Or that's common sense that however, you know, well designed or well thought out product should be or that thing that they're saying Apple's doing. Yeah, of course they're doing that. That's what makes it good. Or that's what that's their prerogative to do or things like that. But I'm trying to take a broader, higher level view of this. First of all, I am not a lawyer. I don't study the law.

56:26I barely even had time to read this because I also happen to be moving today. So it's been a bit of a busy day, so I apologize. But it's important for me to keep reminding myself what they've laid out here is not a complete version of what they have. It's not a complete story that's meant for necessarily people like us. what they've laid out here is a strategy this like they've said everything they've said they've used the words they've used they've chosen very carefully as a legal strategy what they're trying to do is achieve a certain set of goals and they're trying to fit you know the the law the precedent and everything into supporting their goals and so all the arguments they've they're making all the choices of how they've chosen to phrase things what evidence or you quote evidence they've chosen to cite.

57:18All of that is legal strategy to achieve the actual goals. I mean, it's a little hard to tell what specifically the actual goals. Well, the goal is simple. You just said the goal is to win the case. And that's part of the problem. If the because that's the goal, the Department of Justice, their goal is to win their court cases. That's their job, literal, their literal job. And you say, OK, but the court cases are in service of a larger goal, right? Like they bring this. Why do they bring this suit? because they must have some larger goal in mind. And in the end, the larger goal doesn't really matter because it's not like by winning the suit, they get to dictate exactly what Apple has to do.

57:53They can suggest remedies, but what's actually going to happen, especially if they like settle or whatever, it's just, it's the wrong way to go about bringing about change. If the government has ideas about how this situation could be improved, they can pass new laws. They can pass new, it happens all the time. Hey, companies should not be dumping toxic waste into the river. what can we do about that can we sue them for violating some existing law that we think they vaguely might be violating no pass a new law says you can't dump toxic waste into the river that's the solution the solution is not to say well technically they're violating this law of like uh they're they're in violation of the constitution because they're you know stopping people from their pursuit of happiness but no just pass a law that says you can't dump toxic waste into the river that's the solution but we're so bad at passing laws and apparently so is the eu that that is not what we're doing.

58:42Instead, we're going to sue them under the Sherman Antitrust Act because if you squint, it's like they're buying up the entire supply chain so that no one can compete with them except for Google who has more market share. But I don't know. Well, the thing is like, and I think, you know, obviously, you know, the Sherman Antitrust Act is the tool we have in the US to deal with monopoly behavior. And so, again, I'm sure there's a lot of legal strategic reasons for this, But what I've heard a lot of other people report on who know more about this is that obviously a lot of the success or failure of antitrust cases in the US relies on the market definition.

59:21And what they have done here is try to define this like premium smartphone – Performance smartphone. That's right, performance smartphone market as a separate market from all smartphones. I actually like a lot of their arguments in it that said basically like it's a little bit different from other market definitions in the sense that when people buy the phone, they're buying it for reasons like the camera, the specs. They're buying it for reasons other than the parts where they're being accused of being anti-competitive like App Store, private APIs, stuff like that. So I kind of get that argument.

1:00:05It's not a terrible argument. What I hope to see here, you know, I don't know their chances of winning this case. I don't know the law enough and the tricks and the details enough to be able to make any kind of call on how good their chances are. They're very smart people. They probably think they have a pretty good chance. Otherwise, they wouldn't have brought it. They said on the podium, essentially, the DOJ wins most of the cases it brings because it doesn't bring cases unless it's pretty sure it can win them. So I would trust them on that, that if you're going to place betting odds, will the verdict come in favor of the DOJ, especially on the initial one before appeal?

1:00:44Like their odds seem reasonable based on historical precedent. Right. And I don't know how much of it is also like, can they maybe they'll just win part of it and win some claims or some remedies. You know, I'm sure I'm sure this is going to be hashed out over over a while. But... However, they have chosen to wedge their arguments into the existing legal frameworks that they have to use. i do agree that apple does engage in a lot of anti-competitive behavior and that apple has a scale and an importance in the market and to so much of commerce and so much of modern life as you were saying earlier john with everybody having a smartphone like and i've said over the years i've said many times i do think this is very different from a game console just because of how much of modern life and commerce runs through this gatekeeper and that's why i i did i don't object at all to the eu dma kind of focusing on this idea of a gatekeeper and basically making a law that's targeted at only a very small number of companies because it does control and restrict so much of modern life that is exactly the sort of thing that regulation is made for like regulation is ostensibly usually to protect consumers or markets or the environment or something else from what capitalism would normally kind of do naturally yeah what would be in the in the self-interest of the company if their goal is to just make more money it's way cheaper just to dump your toxic waste into the river than to have to pay lots of money for someone to ship it away and safely dispose of it and so without that regulation a company with a soulless evil company that just wants to make money they're gonna say yeah just dump it in the river like why would we do anything different and that's what you put to bring the regulation and says but they're just being a smart company they're saving money they're increasing profitability by not paying those expensive fees to dispose of toxic waste uh that's what regulation is for and so yeah that would be a much better tool to do this and it's what the eu is trying to do but in the u.s that's not how we've chosen to do it for the second time yeah and and also you know you can look again at things like the phone networks, the original, the landline phone networks, and how government regulation was required there to ensure good competition and use of those lines because the phone networks, while they were built by private companies, became so important to modern life and to everything in modern life that it was in the best interest of everybody, the whole society, to have some basic regulations on how those were used so that the very small number of companies that built them couldn't dictate modern life.

1:03:25Look also at the railroads. Similar problems. And this is why these mechanics exist. And if you look at Apple, their size today, they are so big. They are so important to so much of the world and so much of commerce and so much of society. they do need to have governments looking at them for regulation because the governments because of apple size and and influence over so much governments should be holding apple responsible for making sure they use their power in in a way that's not going to really damage you know commerce the economy companies etc a lot of this complaint i think reads very poorly to those of us watching it because we look at it and say things like i was saying earlier like well this is this thing that they're being accused of that's just making a good product why should that be illegal and to a lot of extent i i believe that but you can also look at a lot of apple's behavior over the last decade and you can see a lot of anti-competitive and also i would say needlessly anti-competitive behavior that it really just comes down to greed or you know just extracting whatever they can, which itself is not necessarily inherently illegal.

1:04:43But again, once you reach a certain scale, tighter standards have to be applied to you for the good of the entire economy. So I do believe Apple has reached that scale and that they still are doing certain anti-competitive behaviors that warrant government intervention. So even though I disagree with a lot of the specifics and the examples they cite, I think that what the DOJ is getting at has a decent amount of merit and maybe the reason their arguments seem a little bit absurd at times is because they're trying to wedge the current situation into these very old laws that have a hard time directly applying.

1:05:24That's because everything you just mentioned is not in the Sherman Antitrust Act. There's nothing in the Sherman Antitrust Act that says if the thing you supply is used by most of the population and is required to be a part of daily life, that's not in the Sherman. The Sherman Interest Act is very succinct and to the point and does not make any distinction between like, well, what if you make a game console? How important is your product to society? How big are you as a company in terms of like it's not about that. It's much simpler. And everything, all those nuances that are about that have been established by case law.

1:05:54And the case law leading up to this, including very recently with Microsoft, has not really made that distinction that we're making here, that it's like it really does make a difference whether you make a smartphone or, you know, a blender, right? You can, you know, every adult in America doesn't need to have a blender to be able to function well in society, right? But a smartphone is just like a landline phone used to be. It's so necessary that we feel here on the outside of the legal system, it's like it makes sense to give that more scrutiny. It makes sense to apply different rules to that.

1:06:27But to win the legal case, if that's not in the law, there's no point in bringing any of that up in the court case. They could have brought it up in this document because lots of random crap is brought up in this document. So I'm kind of disappointed not to see it here. But when it comes to proving they violated a law, I'm not sure. I mean, they can make that case. They can say, well, judge, that's how precedent gets set. You know, well, judge, even though Apple only has 65 % market share, it's so important to have a smartphone. and they do make the point in the document that it sounds silly to us again in the tech world but they make up this term for it i forget what they called like multi-homing or something they're like look people don't use more than one smartphone they either have an android phone or an apple phone but they tend not to have both of them so basically they're basically saying like if you make an app and you want to address the entire addressable market for smartphone users like if you're a doordash or uber or something you have to be on apple's platform even though apple only has 65 market share because people don't own two phones you can't expect if i just make it for android everyone will be able to to use uber right you have to make it for both platforms it's a weird way of getting at the point of like saying look there's there's essentially a duopoly but we don't really have any laws about duopolies and a duopoly and something is important in the smartphone is arguably worse than having a monopoly because they can both point to each other and say see there's competition which they absolutely will do in the court case i'm sure like our our laws are insufficient to capture the moment but doj is trying it's going with the laws they have and i guess trying to win based on those things and that's why a lot of this does not ring true to us so like i i agree with mark like i feel that something needs to be done but i look at this complaint and i'm like yeah this is not it this is not what needs to be because it necessarily can't get at the heart of the problem it has to instead prove that apple violated this law and that's you know so here they gave five examples and they were clear in the complaint they said this is not exhaustive these are not the only things that we're saying apple did that's bad i'm sure the court case will the government will roll out many many things that i think apple did that was bad right but they did give five specific examples and they're so weird yes so here we go here we go disrupting quote-unquote super apps that encompass many different programs and could degrade iOS stickiness and make it easier for iPhone users to switch to competing devices.

1:08:45Wait, what is this? I love. All right. So maybe this is a term of art that I don't know. So bad on me for not being familiar with the term of art about super apps. But I didn't know this either. If you're if you're listening to this and you think I've never heard of a super app, once we start naming examples, you're gonna be like, oh, I know what that is. I just never heard it referred to as a super app. Yeah. So what they define a super app is a super app is an app that can serve as a platform for smaller mini programs developed using programming languages. such as HTML5 and JavaScript, super apps can provide significant benefits to users.

1:09:13For example, a super app that incorporates a multitude of mini programs might allow users to easily discover and access a wide variety of content and services without setting up and logging into multiple apps. Not unlike how Netflix and Hulu allow users to find and watch thousands of movies and television shows in a single app. So I think what they're actually referring to, though, is WhatsApp, isn't it? Oh, WeChat. Oh, I'm sorry. Yes, WeChat. But basically, here's what they're talking about. Anytime we've ever talked about, like, app store rejection and stuff like that, where some person wanted to make an app and then inside the app there was like a little miniature store where you could buy a bunch of individual like sub games like roblox but those aren't games those are experiences it's fine yeah roblox is by the way a pretty good thing to bring up here yeah i think it will i'm pretty sure it'll be brought up right but anyway uh roblox is allowed but like things like wechat like wechat my understanding is in china you get wechat and you can do so much stuff from that you can get a taxi you can pay for your meal you can pay your electric bill like it's all inside one super app right now this is weird in some ways because well so we it's weird because things like roblox exist and sort of are in violation sidelines and the examples they have netflix and hulu you log into your netflix thing and there's a whole bunch of things you can watch there within a single app netflix doesn't have to put out a separate app for each individual show which sounds dumb to you but that's what that's what apple was making people do for things like uh that we'll talk about uh cloud streaming services but i think that could also kind of be under super apps of like if you're inside an app and there's like a sub store if it's like another level of abstraction there's other things you can do in there apple tends to not allow those unless it feels like it but this is one of the things i cite is here's what apple does and it's anti-competitive because things like wechat essentially it can't exist in the u.s i would say you know again as a consumer looking at this in the big picture i think super apps like wechat are not what i want i would much rather have android and ios with individual apps for all of those things competing in sort of a more fair open playing field i do not want one super app where my phone is just a wechat device and wechat owns every aspect of my life because that's just another all you're doing is shifting the antitrust problem to a different place that is not what i think that is not an example of competition but in the do you guys complain they're like look apple doesn't allow these things to exist uh elsewhere in the world they do exist and even in the u.s there are companies that want to do this and apple says no and we think that's stifling innovation and i think doj pick a different example because all you're doing is setting up your 2038 lawsuit against the dominant super app in the u.s yeah this is one area where i i think this and this is going to be a common theme uh to to a lot of apple fans responses to these complaints is like we actually want it this way like this it's i think we're actually better off to not have these big super apps because all that does is just create other monopolies that that just sit above the smartphone and then can even be stronger monopolies because they can make that same super app for ios and android yeah all right so the next one is related to that blocking cloud streaming apps for things like video games that will lower the need for superior hardware where this is basically saying the cloud gaming services, where there's like a streaming game service, like Microsoft's Xbox thing, where the games run in a data center on big gaming PCs, and you stream the input and output to your phone, right?

1:12:32And Apple for a long time has rejected those. And it's, I think this is one of their starter cases was like, look, why are you rejecting this? Is there a safety concern? Is there a security concern? Is it confusing to customers? Are they going to be exploited? It's like, no, no, no, no. This is Apple doesn't want this just simply because first, it makes a little mini store where you can go in and buy individual games, which I think is fine with the concept of gaming. Apparently, Roblox can do it, but those are experiences, not games. And second, who cares? The only reason Apple doesn't want this is because they make so much money with individual native games.

1:13:06They're like, well, if we did this and we let them in, then all gaming on the phone... First of all, I think this is wrong-headed because I don't think streaming gaming would actually dominate. I think Apple... This is another one of those cases where I think Apple, if you actually competed and allowed this, you'd be fine. But whatever. They're scared to find out, right? So they just said no to this. And I think this is actually a good example of anti-competitive behavior because they're going to be able to say, Apple, remind me again why people aren't allowed to do this. Like, even if they were willing to pay you the 30 % and do whatever, it's like, no, we just don't allow things like that in the store.

1:13:34Well, why not? And the answer effectively is because we make more money from the other things. It's not, there's no privacy angle. There's no security angle. There's no, like, there's no anything. It's just, they were disallowing us. And of course, they changed this rule very recently to say, okay, Microsoft, you can't, remember that thing we told you you couldn't do for years? you're allowed to do it now and i think the reason they changed it is because of you know all of the pressure that they knew was going to arrive or was arriving from the eu or was coming from the u.s or whatever like they didn't change it out of the goodness of their hearts right so this is i think a reasonable point although maybe it's undercut by the fact that apple already allowed this but it's an historical example here's the thing that we're doing to stifle competition um the next one i think this is going to be tough for the government for a variety of reasons suppressing the quality of messaging between the iphone platform and competing mobile platforms like android here's what they mean in the complaint because only messages on the phone can do sms that makes it difficult to use any other third-party messaging platform as sort of you're like you can do everything because the point of the thing is like if you have to message someone you can just go to messages you type in their phone number and you send the message and one or two things going to happen either it's going to send through sms because that's all they have and it's the common denominator, or it will send through iMessage because they have an iPhone.

1:14:52And their argument is, they have a whole bunch of bogus arguments with the beeper thing that we've talked about in past episodes, right? But their argument is like, no other third-party messaging app can do that because Apple doesn't allow third-party apps to use the API for sending SMS messages. They could, they just don't allow that API to third-party access. This whole section drove me nuts because what they're saying, depending on how you interpret it, is either just straight up wrong or just a poor way of describing it. Because the whole point of fast text, may it rest in peace, was to send text messages.

1:15:29And there is an API to do that. Now, I think what they're saying is there's no mechanism to go in and have a replacement for the messages app. There's no mechanism for my app to become the system SMS app. Not even that. i think they're saying you couldn't make a client app like a full yes you can send messages but you can't basically be a client app that's sitting there running in the background waiting for someone to send you a message and like you know and just being an interactive client like i i that's basically i feel like what they're saying is that yeah there may be an api to send a message but there's you there's not enough apis for you to write uh essentially write your own version of messages forget about it for replacing it as a system default i think that's what they're saying i think that's true right that you couldn't write messages yourself make your own set of servers make your own everything make your own like it's all your own infrastructure but just write an app that looks and feels just like messages it's not the default app on the phone but it does the same stuff i don't think that's currently possible no you're right and the other thing that drove me nuts about this section is that they were complaining and moaning incessantly about how oh you can't run anything in the background so you wouldn't you wouldn't receive your messages in a timely fashion or whatever and that's also mostly not true i mean granted it's because of apns but yeah i think i think i pulled pulled the quote out about that which is like i was like there's i really want to see them i mean this is not maybe what they're going to say in court but i really want to see them try to support the statement let me see if i can find it um all right here this is directly from the complaint for example third-party messaging apps cannot continue operating in the background when the app is closed which impairs functionality like message delivery confirmation cannot continue operating in the background when the app is closed i don't think there's any way you can interpret that sentence for it to be technically valid in ios today like and then the the second part is which impairs functionality like message delivery confirmation push notifications exist and can be used by third-party apps i swear they can like you can get a push notification or like this none of this is true i don't think any of this is true and it is such a weird thing to be harping on that like third-party messaging apps can't continue operating in the background this is news to every third-party messaging app that does exactly that and notifies you when people send you a message like i don't i'm just flabbergasted that this is in here it makes no sense like the one point they have is hey they're private apis and i have to make this point several times they're private apis that apple keeps for themselves and those apis would be useful to third parties if apple let them use them but they don't and it gives apple a competitive advantage because only apple can make the app that does its own proprietary messaging plus sms and this is a weird this is a weird thing to bring up as well in their five examples because there's not it's not like there's a lack of competition in messaging apps on ios there's a lot of them and they're popular like the one strike they have against them is i guess they can't do sms but and i guess there is a point to be made there i think they will successfully make that point in the court case but it's not one of their stronger points So so far we've got super apps, which I think is wrongheaded and bad.

1:18:30Cloud streaming, which is pretty good, but Apple's already reversed that. No SMS use of API, which I think is just one case of them keeping APIs themselves. Maybe they can bring that in that direction. Again, these are just examples in the document. The next one is, I think it gets worse again. Limiting the functionality of third-party smartwatches with its iPhones, making it harder for Apple Watch users to switch from iPhone due to compatibility issues. These are summaries, essentially. but like uh they're basically saying uh apple watch can only be used with iphones and it's hard for third parties to make smart watches they can integrate with the iphone the way the apple watch does that's all true uh and to marco's earlier point we look at that and say uh yeah because they're apple and it's their watch and it's going to be tightly integrated with their operating system because they make all of it what's wrong with that and the government's going to say well when you're a monopoly the rules change for you and what would previously have been a smart business move now becomes illegal because you're not letting other people compete but this is the example they're going to use is like there were smartwatch apis before the apple watch came out and apple essentially just didn't ever improve or expand them and apple watch got to use its own fancy api it's like we look at this as apple fans and be like yeah that's how apple works that's how the tech sector works they made those apis for like the pebble smartwatch or whatever because apple didn't have its own watch and then when it made its own watch of course you don't get to use those apis only apple does and those apis are better and tough luck because apple's gonna apple and i guess the government's gonna say that's illegal because monopoly yeah that this is a weak one this this is why again like you can look at apple and you can find instances of anti-competitive behavior i think fairly easily but i think the examples they have chosen to highlight are not great examples like they seem to be trying to frame the case against Apple as Apple makes it too hard for consumers to switch to Android.

1:20:29And I don't think that's that strong of an argument. You can make lots of other arguments about Apple's anti-competitive behavior. I don't think that is a good way to go. But what I can't tell is like, do they also, would they agree with that? And this is just how they're going to give it the best chance of winning within the legal framework that we have? Or is this actually what they're trying to argue? they're not they're not they don't actually they do a different angle on it they're not actually saying apple uh makes it too hard to switch android what they're essentially saying in several parts of the document is they say this change that apple made was not made to make their products better it was instead made to demotivate people from switching that's subtly different than saying apple is stopping you from switching it's basically saying oh apple here's some internal email that says the reason you did this is because you were afraid if you did this it would there would be less reason for people to stay on your phone which again you would look at that and say isn't that apple's job to make their phone the most attractive platform so people want to stay on it and you're saying because they did that it shows well you only made this change because then people would like the iphone better and they would if they left it they would miss it because things are only on the iphone you're like yeah that's just business isn't that great and again it's saying oh yeah that's great right up until you're a monopoly and so if you're a monopoly you're not allowed to do those things but that's they use that angle constantly by quoting from emails in just that we're in discovery like the epicase or whatever is saying here you are apple saying you're not going to do this thing that we the doj thinks would benefit consumers and the reason you say you're doing it is because you're one of your executives says we did this people would have less motivation to stay on iphone it would be easier for them to get their kids android phones right and that does not look nefarious when i read it because you know i understand apple and how things work and a lot of times i agree that they shouldn't do that because it would make the iphone worse but the doj comes out and flatly states in this complaint this would have been better for consumers i'm like already i disagree with you doj but anyway and then they go on and say and the reason you did it was to keep to make it harder not to make it harder to make it so people don't want to switch because they switch they'll be leaving behind this good thing here right is there something only on the iphone oh well like even say about the services like all these services you have it makes it so that if people leave they're sad because they're like oh but all my things that i see on this service i wouldn't have them anymore if i want an android because it's not available there it's it's so confused when i look at that and i say sherman antitrust act and third-party watches can't integrate with the iphone like i'm trying to connect those dots real hard it's just not it's not working for me the final one they had here which i think maybe is one of their strongest ones but it's so dead simple and of course the eu beat them to it as with all these things uh blocking third-party developers from creating competing digital wallets with tap to pay functionality remember the whole hubbub i guess years ago was like hey there's going to be nfc and apple phones but oh only apple can use it for these certain purposes uh the eu i think already made apple not do that anymore and say hey it's part of the dma i think hey apple you have to let third-party apps have access to the nfc thingy so that other companies can have an app on your phone so that when you smush your phone against the thing you can pay with them uh but in the u.s i believe it is still the case that only apple can access that through their whatever apis they're protecting um that is kind of like a level playing field within the ios market type of argument of saying there are features there are hardware features of the phone that you don't let other people use and why is it because it's better for consumers apple will surely argue that having only a single wallet app is better for consumers because it's simplifying yada yada yada but the DOJ is going to argue that it's better if Apple really is doing it to basically make sure that all commerce on the phone goes through them and they get a cut of it and has nothing to do with simplifying things for their customers.

1:24:21That I suspect a lot of the DOJ case will be exactly that and not just this point on all of them. The DOJ saying you're doing this Apple because it gives you a cut of all transactions and Apple saying no we're doing it because having a single wallet is better for consumers because it's simpler and it's better for security and yada yada yada. And I think both of those things are true. It is simpler and easier for consumers to understand. And also Apple is also doing it so they can get a cut of all those transactions. Like they're literally both true. It's not like they're they're not they're not in opposition to each other at all.

1:24:52Those are two reasons that Apple does it in probably equal measure. And neither one of those reasons is wrong. But the DOJ has to, I guess, prove that the money reason is more important than the being nicer for consumers reason. And repeat that for all these points. And it seems so weird to me that the DOG really has a burr up its ass about the fact that people want to use alternatives to Apple Wallet. And who? Why? Like, I don't really get that. And in fact, I would argue that compelling all of these different apps and Ticketmaster and everyone else, if Apple is even compelling them to add things into Apple Wallet.

1:25:32I'm sure they are. Which I don't know that they are, but I would expect that they are. i actually why is that bad so i see i see the doj case and i think they have a strong case in terms of the law it's going to make sense to people who aren't apple nerds here's the deal like from our perspective we're like this is a simplification and because we trust apple we prefer this scenario but from a strictly business scenario it's basically apple saying no commerce can happen unless we mediate it so you're a bank and our phones have nfc and you would love it if you could boop and do your bank stuff but we're saying actually you've got to go through us i know you're already a bank but it's got to go through us because we need to get our cut right and because we need to have control and apple would say and it's not because we need a cut it's not because we need control we do it for security reasons we that's why apple pay is better we have these temporary uh you know credit card numbers you were just going to send the same number constantly back and forth it was totally insecure i was just better blah blah blah but from a strictly business perspective it's like they're basically saying hey you want to you bank can't have an app that uses our phone to pay for things you can do it on android phones it works fine but here we're saying no everything has to go through us and for the doj's case and i think they're going to be able to make this pretty strongly to a non-tech savvy audience is like why does apple get to insert itself there and i think apple's obvious claim that this is a simplification it's better for security it's better for privacy may fall on deaf ears because they're going to say like yeah that's exactly what you would say if you wanted to get yourself between every single transaction and again i think both are true i think it is more secure and i do trust apple more than a lot of these banks and it is better for consumers but also apple does want to cut of that right both things are true and i don't quite see how this is going to how anything useful is going to come out of this because you know like if you if you have if that's if the government makes this case and the things they're saying are true and apple goes on the stand and the things they're saying are also true it basically comes down to the judge and or jury however this trial is going to go deciding which one of those two completely true things is dominates the other and it really just depends on are you looking at apple as a big evil corporation are you looking at the government as incompetent and tech ignorant what if it's both and pork and a lot of stuff yeah it's that's this is a difficult thing and that's why you never want to leave this up to a freaking legal case just tell again use your words government right regulation that tells apple what you want it to do differently and google for that matter because they're kind of important in this scenario so bad anyway this is some a couple well i don't i don't want to pull this one let's go let's go to apple's response because i have a bunch of other excerpts that i want to just do quick hits on but here's apple's uh terse response obviously the day of this thing coming out uh you want to read this casey sure at apple we innovate every day to make technology people love designing products that work seamlessly together protect people's privacy and security and create a magical experience for our users.

1:28:25This lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets. I like that they throw in the fiercely competitive part. If successful, it would hinder our ability to create the kind of technology people expect from Apple, where hardware, software, and services intersect. It would also set a dangerous precedent, empowering government to take a heavy hand in designing people's technology. We believe this lawsuit is wrong on the facts and the law, and we will vigorously defend against it. i think this is better off being read through gritted teeth at apple we innovate every day i can do that if you'd like i can do a second take i feel like this is a a canned thing that they have ready to go probably had ready to go for ages kind of like when you're pre-write obituaries uh but this is this is a tangent but it's my favorite thing about this uh we've talked many times in the show about how apple style guide wants you to say like apple vision pro and not the apple vision pro and they want you to say iphone not the iphone like we believe iphone is the best platform for blah blah we don't want to say we believe the iphone right that's in all their style guides it's the way they do pr or whatever so in this statement they say it would also send a dangerous precedent empowering government to take a heavy hand and when i when i originally read that i'm like did i miscopy and paste this shouldn't it say empowering the government to take a heavy hand but no the government gets the iphone treatment it's called it's empowering government not empowering the government we don't say the government we just say government Here at government, we believe Apple is an illegal monopoly.

1:29:49I understand Apple's attitude here because, look, Apple does not like being told by external forces how to design their products. And, I mean, I can't blame them. I wouldn't like it either. But the reality is, again, they do actually anti-competitive behavior all the time and have for a while that I think is easily avoided. And they have brought this on themselves with this behavior. They have been so brazen and so comprehensive with their anti-competitive behavior over the years that they have invited governments to – they've effectively forced governments to try to regulate them by behaviors that are not core to their products.

1:30:35by behaviors like various anti-competitive app store policies and third-party service policies. If you look at that whole area of their behavior, that has invited most of this regulation and most of these lawsuits, and that has nothing to do with their products being good and well integrated with each other and secure and private. They're using that, and actually the complaint directly addresses this, they use the security and privacy angle as an excuse to cover a lot of behavior. And a lot of times it's warranted because Apple products really are pretty secure and pretty private compared to everything else in the industry.

1:31:13And for the most part, we appreciate that. But they also use that same cover on behavior that is not great and where those are not the reasons for that behavior. Or very often they are reasons, but they're not the only reason. And maybe not even the primary reason. And that's kind of like what you mentioned about trusting Apple, though. that's that's part of the the reason why i think this is has a strong uh chance in a legal setting we like a lot of these moves because we trust apple more than we trust some stupid bank for example right but the law is not just the law for apple it's for all companies so if you say it's legal for apple to insert itself between every transaction we think that's great because i'd rather have apple in there because we trust apple more but if you just remove the the names and just say anonymous company a b and c do you want that to stand because what if the company that's doing this in the middle was for example microsoft or whatever company you have less nice feelings about than apple and facebook yeah exactly facebook right whatever right the law has to be you know whatever the law that's not they're not writing laws this verdict is going to apply to all companies not just apple and so while we may actually prefer apple to insert itself because we trust apple more because of their proven track record and also because of how apple makes money is not the same way that Facebook makes money, and so their incentives are differently aligned.

1:32:34They have a strong legal case to say, it's all well and good because you like this benevolent dictator, but it should be illegal for anyone to do that, even though Apple's being nice about it. And I think they might have a strong case there as far as that goes. Yeah, so I think Joe Rosenstiel retweeted or retweeted an account, Glyph, which I'd not been familiar with, but I think this is a perfect distillation of kind of how I feel about it. Even if you're an Apple stan and think the company really has no motivation but a sincere desire to protect users and government regulators are bad product designers and this will make things worse.

1:33:10Even so, this is Apple's fault. The handwriting has been on the wall for years. They should have figured out a way to self-regulate by now, but because the appearance of impropriety clearly exists and has now been called out on multiple continents, this is not one regulator with a bias. I mean, it's so true. You and the three of us have been saying this for years. Yeah, we've talked about it for years. We said this was going to happen, and lo and behold, it has. And part of it, when we had these discussions years ago, what I always said is that Apple's calculation is not that they're going to avoid regulation, but that they're going to survive it.

1:33:42And it is better to essentially force it to happen and then settle. Or essentially, they're making the calculation that, yeah, we know we're bringing on the bad thing. We're doing it to ourselves, but we think in the end, because we're Apple and we're so huge that we will still come out in a more powerful position than if we were to give concessions manually. I don't think that's true. I think the reputational damage is what they weren't taking into account. But that has always been like a plausible reason that not that Apple is just dumb and didn't. Oh, they should self-regulate themselves. Why are they so dumb?

1:34:14I think they're constantly making the calculation. like i think we can i think we can survive i think we can come out ahead if we just hold firm bring on the lawsuits fight it in every continent like just because that's effectively that's what they're doing and no one's forcing them to do it they're choosing to do that so their calculation must be this is actually the better way to go even though there's going to be short-term pain and we're going to look bad in the end we'll come out ahead uh i don't think they are going to come out ahead i think it was the wrong choice but clearly they feel differently yeah i mean let me do my quick hits with these i don't know how quick they're going to be i'll probably stop eventually but there's some some choice snippets that i pulled out of the uh complaint that i thought were interesting we already did a couple of them um this one i mentioned beaver before i'm not going to go through it all you can go look through old episodes when we talked about the beaver thing but this paragraph is essentially about beaver this is the doj saying recently apple blocked a third-party developer from fixing the broken cross-platform messaging experience in apple messages and providing end-to-end encryption for messages between apple messages and android users by rejecting solutions that would allow across the platform encryption apple continues to make the iphone less secure than they could be otherwise this is entirely beeper's framing what was going on but it was ridiculous when beeper said it and it's ridiculous when the ocean beeper was trying to use apple servers in an authorized manner to run a messaging service where it didn't have to run the servers like that's what they were doing nothing to do it's like but this is this is as if beeper wrote this right i think they will not do well at that point in court because it is ridiculous but it's funny that they shoved it in there um all right so this is this is about the uh the nfc banking thing uh apple acknowledges it is technically feasible to enable an iphone user to set another app for example a bank's app as the default payment app and apple intends to allow this functionality in europe i read this and i say hmm doj why does apple allow that functionality in europe did they just decide to do it in europe because they like europe better or is something else going on there maybe some other way to change apple's behavior other than suing them based on ancient antitrust laws like it's it's right there in front of them they apple intends to allow this functionality in europe it's like the bell ringing somewhere although i mean keep in mind like it does kind of work in the sense that like you know remember when apple announced they were switching to our they were going to add rcs support um and remember how they announced when they were doing, when the DMA plan came out, they announced also, oh, by the way, the game streaming apps thing, that's okay everywhere now.

1:36:43I mean, we thought at the time, I mean, maybe it was China, maybe, you know, and maybe that might be true, but there is, now it's very clear, like, Apple did both of those things strategically to kind of get ahead of this. Like, they definitely got wind of these specific things the DOJ was going to cite. Also, I think that helped with the EU stuff, right? Like, it helps them everywhere people are complaining, but the whole point is that Apple is citing something that Apple is intending to allow in Europe. They're intending to allow it in Europe because Europe actually passed regulations that forced them to.

1:37:15That's why they're allowing this in Europe, not because they decided to be nice to Europe. Europe did the thing where you have regulations and you say, Apple, you must allow banks to use the... So if the US government want that to happen, there's a way that the government can make that happen besides suing them and hoping somewhere in the remedy that they're forced to open up the NFC chip on phones. just say that's what you want they have an example if you want that europe showed you how to do it this is so targeted and so specific that i believe even our lawmakers could pass a targeted law or regulation saying that apple has to allow access to but that's just not the level the laws work here like it's absurd to even think that that would go through because it's just so many things are aligned against it let's see what else i have um so they have a bunch of stuff anti-steering stuff in there which i don't i mean it's anti-competitive behavior and presumably it would be a legal maintenance of monopoly if you can prove they have a monopoly which is its own challenge but this is where apple even prohibits developers on its app store from notifying users in a developer's app that cheaper prices for services are available using alternative digital wallets or direct payments yeah anti-steering they mentioned anti-steering they mentioned that that there had been court cases that in the u.s that have said apple you can't do this anti-steering thing and they basically say we have those court cases they told apple they can't do it but still people are complaining that even though they lost that case and the court said that apple had to do a thing the thing that they did is not satisfactory i'm like see court cases are a bad way to make apple do things already epic is like you know continuing that in the legal system saying hey apple lost the case and they did a thing and we think they think they did doesn't actually comply with the judgment so that continues to rumble on this is all like in their own complaint it's evidence that the thing they're trying to do does not work well to get the end they want so frustrating oh so i guess the relief section just to quote a few things from the from the relief again i don't know how this works legally speaking and who decides what they have to do and all this is a moot point if they settle out of court with the government in which case there will actually be a negotiation back and forth about what apple's supposed to agree to do or whatever um but near the end of the document it instructs that what they want is the deodorant wants is to enter relief as needed to cure any anti-competitive harm including but not limited to preventing apple from using its control of app distribution to undermine cross-platform technologies such as super apps and cloud streaming apps among others prevent apple from using private apis to undermine cross-platform technologies like messaging smart watches and digital wallets among others and prevent apple from using the terms and conditions in its contract with developers accessory makers consumers or others to obtain maintain extend or entrench a monopoly that is all so vague is to be almost entirely useless like if they if they followed the letter of that super apps are allowed you could do cloud streaming which they already allow uh can apple not have private apis that's absurd uh but they can't use them to undermine cross-platform technologies like messages smart watches and digital what does that even mean do they have to open up all their apple watch apis to somebody else i guess they have to open the nfc thing they have to allow messaging apps to use sms and then don't have terms conditions in your contract with developers that are anti-competitive there are so many of them in there which ones are you talking about right it's that's that's the the extent of the section where i don't know if that's it's the the job of these documents is just what should change but i really wish they had a a clear-headed vision of here's what needs to change because if they had that they could have just written a law and there's a different branch of government that does that and that's not what they're doing here but yeah after all this and this is going to go on for years and it's just going to be a disaster and it's going to cloud everything that apple is trying to do with its company over you just asked microsoft how much the doj draw was a distraction and did reputational harm it took them years to recover from oh one other thing i guess it's the final i this i don't know where i have this in the excerpts or whatever but here there's this whole section of the document where the doj tries to do a victory lap for its microsoft case saying you know that microsoft case that we won even though it was partially overturned on appeal anyway you know the microsoft case that we won uh that basically let apple become the company it is today because we did that thing you just if you know anything about the tech industry you just have to look at the document look at the absurd conclusions they're drawing of like and because we did this apple could ship itunes on windows okay all right sure yeah but here's the here's the thing about the doj ms trial if any of these people had any clue about anything having to do the tech sector here's how that shook out.

1:41:46It was a huge distraction for Microsoft. It did a lot of reputational harm to them. But in the end, it did not change the shape of the personal computer market. Microsoft dominated personal computers in the 90s. And you know what changed about that? Nothing. Nothing significant. You know what changed? The PC market became less relevant because the mobile market was where the new show was. But what happened in the PC market? Did Windows disappear? Did Linux on the desktop become common? No, the only thing that happened was the PC market became less relevant. But the shape of it did not change. This did not fix the DOJ trial did not fix Microsoft's dominance of the PC market.

1:42:26It stayed basically the same. Apple eroded it slowly over many years or whatever. But it fundamentally didn't change. It was Microsoft dominating with with Apple with a tiny market share. And now Apple's market share is like 10 times what it was then, but still small. and that took decades right the doj trial if it was supposed to fix the pc market it didn't the pc market it was like microsoft dominated and there's literally nothing this court case can do to fix it even if microsoft loses they have the settlement blah blah it did not change the pc market what happened was new market the mobile market and that is what this whole case is about and so if they think that somehow by massively winning this thing they're going to quote unquote fix the phone market the if they're using the microsoft doj trial as their precedent the best case scenario is that phones are replaced by digital holographic rings or some crap and then even though the phone market never got any better and it stayed microsoft and android and it stayed the way it always is eventually decades later a new market came along and phones became less relevant and don't hold your breath for that i'm just giving you an example right yeah it's it's so bad that they think like see what we did with the microsoft case like doj do not do not cite that you did not fix the pc market you were rescued by the fact that the pc market became less relevant that's it you did not fix anything it's just that's the part that makes me give them a c-minus on this paper because they do not understand they don't understand their own i mean these people weren't the people who did that obviously those people all retire but they they do not understand history and what the msdoj case meant it is not what allowed apple to become the iPhone company at all.

1:44:08And it's not fixed the PC market. Nope. All right. Thank you so much to our sponsors this week, Squarespace and Trade Coffee. Thank you also to our members who support us directly. You can join us atp.fm slash join. Our new member benefit is what we're calling ATP Overtime. This is our special bonus topic at the end. After we recorded the regular stuff, we have a special bonus topic after the show. Tech topics, about 15 to 45 minutes. This week we are talking about Apple's AI updates. There were some AI stuff, AI updates from Apple this past week, so we're going to be talking about that in ATP Overtime.

1:44:43Thank you, everyone. You can join in here at atp.fm slash join, and we will talk to you next week. Now the show is over. They didn't even mean to begin because it was accidental. Oh, it was accidental. John didn't do any research Marco and Casey wouldn't let him Cause it was accidental It was accidental And you can find the show notes at atp.fm And if you're into Twitter You can follow them At C-A-S-E-Y-L-I-S-S So that's Casey Liss, M-A-R-C-O-A-R-M-N-T, Marco Arment, S-I-R-A-C-U-S-A-C-R-A-Q-U-S-A. It's accidental. Accidental. They didn't mean to. Accidental. Accidental. Tech Podcast. So long. All right, let's do a post-show brief Ask ATP, because we didn't get a chance to talk about it in the main show, and we needed something, a little bit of a palate cleanser.

1:45:59So we have a question that ostensibly is from Tony, but may as well be from me. And Tony writes, I've been listening to the show for years, and there's a question I've been dying to know the answer to. Why do John and Marco only use one monitor? Is it aesthetics? Is it the cost of monitors? Is it comfort level, because that's what they're used to? Do they hate slightly turning their heads that much? I know not everyone wants a 32-inch 4K monitor set up like I have, connected to an M1 Max MacBook Pro, but the thought of working on just one monitor seems oppressive to me, and the amount of window management I'd have to do makes it a non-starter for me.

1:46:33And then I will briefly add that in the same way that I can work on one monitor, I mean, I did on my iMac Pro for years, I really prefer having two. The three that I have now is admittedly overkill, but I have it, so why not use it? But the other thing that we haven't really talked about, and if I ever do my own version of John's video, is I'm also a devout Spaces user, and to the best of my recollection, I know John very much isn't, and I don't think Marco is either. So what's the deal with monitors and Spaces? Let's start with Marco. You're right, I don't use Spaces. I tried virtual desktops over the years here and there, not much, because it just did not click with me at all.

1:47:12So I never spent a lot of time doing that. Multiple monitors I did run for years. I ran first two 17s and then eventually two 24s, or I would do like a laptop and a 24, a laptop and a 17, you know, at various points during that time as my setup changed and evolved over the years. So I did dual monitors for a long time. The reason I stopped is that once I switched to first a 30-inch 1X monitor, an old HP thing that was basically HP's version of Apple's 30-inch monitor. And then once Retina happened, that's when those all became 27-inch 5Ks, which doubled the resolution, made it a little bit smaller, and now on the XDR.

1:47:55The reason I switched to a single monitor is that I was able to have enough space, and I got a whole bunch of benefits of having one monitor. And so for me, and again, this is so personal, it really depends on how you work, but for me, one of the big benefits was there's a whole bunch of like little subtle bugs and paper cuts when you have multiple monitors that you just don't get when you have one so the windows are never on the wrong screen a bunch of weird bugs that could maybe occasionally happen never happen uh so there's there's a whole bunch of little paper cut things you avoid but just generally i like the flexibility that if i want to see one thing really big, I can do that.

1:48:39Or if I want to have it subdivided, however I want to have it subdivided, I can do that too. When I had multiple monitors, now admittedly, I never did more than two. So maybe, you know, if I could do like the XDR in the middle and then maybe two smaller ones on the side, I mean, that would be, I would need a larger desk and I think a larger office, but I could maybe make that work. But that much screen space, I could do it, but I don't think I would make good use of it. Because I even found, even when I was just using two 24s, I would find that I kind of had like a junk drawer style of window organization, where one would always kind of be my primary one, where I'd have like the main stuff I'm working on.

1:49:19And the stuff I would put in the second one would be stuff like my music app, you know, maybe like a chat room, if I'm in a chat room, maybe I'd put email over there, They're kind of like rarely used or like accessory apps, not the main thing I'm working in. And what I found is that I was better just doing those things on one big monitor because I didn't need those to be constantly showing. I wouldn't even necessarily say like moderate to heavy window management. I would say any window management. you can pretty easily keep your mail and your music player and stuff hidden when you're not using them and then bring them up when you want to use them like that's that to me is not that much friction and i so i found that when i had like accessory monitors off to the side i would have those things up there but i really didn't need them to be there so it was kind of wasted monitor space and it it encouraged me to keep more stuff open even though i wasn't really using it all at the same time.

1:50:23So it was more just like an alternative to hiding windows that I didn't really need. And meanwhile, you have all those paper cuts, you have the complexity, you have the physical complexity, and also, frankly, that was mainly a thing I would do at work. Now that I work at home, one of the wonders that I have partaken in as a home work setup is speakers on my desk to play music sometimes when no one's around. It's wonderful. And I like big speakers because they sound better, frankly. And I don't think I could put two monitors on my desk and also have speakers in a reasonable location to sound good to my ears at this distance.

1:51:07So all of these things combined to basically be the benefits of multiple monitors, I found I didn't use very well. You know, anything that was outside of my periphery of like if I had to even slightly turn my head, I would just never use it. Like I would never do anything useful on those monitors. And I also, going back to what I said earlier, I greatly like the idea of having one giant one so I can have one giant window sometimes when I need that. And that can be things like if I want to see my entire calendar month and not have any days be truncated, I can do that. If I want to edit a photo and see the entire resolution of this giant 100 megapixel photo, I can do that.

1:51:50If I want to have a huge Xcode window and a huge documentation window and three different simulators running, I can do that. I have tons of space to do that, but I have the flexibility that it's a one big monitor. So if I want to have one app, it can be one app. If I want to have 10 apps, it can be 10 apps. John? It's a lot of similar reasons. I do want to have the most stuff in front of me that I possibly can. and i always feel like multiple monitors is just putting a strip of monitor bezel in the middle of that and then you say well but there's no way you can have a single monitor that is as big as two of these monitors and when you get to that size it does become about head turning like i don't i don't want to look to my left and look to my right that much like that i have to because i do want the biggest possible thing right in front of me so i've got the xdr in front of me any monitor that I put to the left or the right of the XDR I'm gonna have to turn my head and the way I work doesn't like it doesn't lend itself to that now that's not to say I haven't had multiple monitors in fact during the whole classic Mac era I had my SE30 and then I had a color monitor and so I had two monitors and yeah one of them was nine inch black and white so what could you put there but you could put small stuff there I had like an IRC window there back in the early internet days like it's just text it's fine it works um but I I didn't like the whole like it's not so much knowing where things are and which monitor or whatever but like i wouldn't want to do active things that far to my left i felt like i was it's kind of like uh driving a uh viper for a little uh post-show neutral here where you're offset because the transmission tunnel is so big you're not even you're not even sitting sort of facing the direction the car is moving you're kind of sitting sideways because the the pedal box is offset by the giant transmission tunnel i don't want to work looking to my left for any amount of time so then you're like bringing the window over to the monitor that's in front of you to work on it then you got to remember to bring it back it's just a vast simplification for me to have one big monitor as i've said in the past when we've talked about this there's a limit if i had the if the monitor in front of me was 100 inches now i'm turning my head to see one monitor right i know there's a limit but i can tell you it's not 32 inches because i've got that now and i find this perfectly satisfactory and i love it i think i could go with a slightly larger size than this in particular height wise i could probably take three or four more inches of height and probably a couple inches on either side before it gets to the point where i feel like i'm turning my head but it's close i feel like it's close to the limit so i'll let you know you know if apple ever sells a 48 inch monitor that's retina resolution that's probably too big for me especially as my vision continues to decline right so there is a limit um but in general i want the biggest single monitor in front of me that i can handle and because i'm not constrained by the need to have every single window that is open visible at the same time i'm fine with windows being on top of each other i'm fine with hiding windows i'm fine with hiding entire applications i don't use spaces but i do hide things a lot that solution allows me to have a tremendous amount of stuff on just one monitor i often think that a lot of times when people have multiple monitors is like but what if i want to have all these things open at the same time it's like dude i have all those things open at the same time but what if i want to see them all at the same time it's like well you can only be looking at one place at once so you're not actually looking at the thing that's on your far left monitor and things on your far right corner at the same time you're just looking at them in turn and guess what you can look at them in turn when they're on your main monitor if you know how to manage windows because you can bring one to the front and now you're looking at that one and you bring the other one to the front and now you're looking at that one there's so many ways to do that spaces is one command tab clicking your mouse hiding apps right i don't feel constrained by that i definitely feel a lot of people like i definitely i need two monitors to help my work because i gotta have this here and I got to have that here and I got to see them all at the same time.

1:55:32And it's very often the case that they're not seeing them all at the same time. They're seeing them in turn. And the way they're doing the in turn is by literally turning their head, which is valid. I'm not saying that's the wrong way to do things, but the way I work doesn't require that. And so I managed to get by with only the Protospite XDR. Only. And a little help with your friends. Yeah.