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by Jason Snell & Dan Moren

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Linked by Jason Snell

Ben Thompson on Elizabeth Warren’s tech breakup proposal

Today Ben Thompson takes apart presidential candidate Elizabeth Warren’s proposal to break up big tech companies, and then starts to put it back together. It’s a great, in-depth piece and I recommend that you read the whole thing, but I want to call out a little bit about Apple:

…do consumers not matter at all here? Is Senator Warren seriously proposing that smartphone be sold with no apps at all? Was Apple breaking the law when they shipped the first iPhone with only first-party apps? At what point did delivering an acceptable consumer experience out-of-the-box cross the line into abusing a dominant position? This argument may make sense in theory but it makes zero sense in reality.

What is even more striking, though, is that the App Store does have a massive antitrust problem: it is not Apple unfairly competing with app developers, it is Apple unfairly imposing massive complexity and extracting 30% of revenue with its contractual requirement, enforced by App Review, that developers use Apple’s payment mechanism…

The important takeaway for this article, though, is the degree to which Senator Warren missed the point: there is significant consumer benefit both to having preinstalled apps and also to Apple controlling the installation of apps. There is a big benefit to suppliers (app developers) as well: the app market on PCs died in large part due to security concerns, which Apple obviated with the App Store to the tremendous benefit of every participant in the ecosystem. Senator Warren’s proposal would make the App Store worse for everyone.

When I saw Nilay Patel’s brief interview with Warren I had the same reaction—she seems to be suggesting “solutions” to things that aren’t problems, all in the name of sticking it to the big guys. As Thompson writes, “Tech is a means, not an end, but Senator Warren’s approach presumes the latter. That is why she proposes the same set of rules for the sale of toasters and the sale of apps, and everything in between.”

Read through Thompson’s piece and you’ll see him identify numerous areas where giant tech companies could be restrained, including their voracious acquisitions of any company that might possibly threaten them in the future. This is the trick with stuff like this—a lot of people can agree that the tech industry is out of control, but when it comes to legislation, it’s all about the details. Thompson makes a forceful argument that Warren has many of the details wrong.