Music Industry Market Shares
why people says that apple is a monopoly?
i am very confused because I have read in many places on the internet that apple has a a monopolistic power.However, I know to be a monopoly you have to have 100% of the market share and also not allow other firms to entry the industry. Apple has 70% of the digital music market share and plays very unfair with other competitor. For example there have been recent allegations that Apple used its dominant market position to persuade music labels to refuse to give the online retailer Amazon.com exclusive access to music. it seems that they have sufficient control in this industry. If it is not a monopoly what it is then?
1. There is a difference between “monopoly” in economics and under the law. You do not have to have 100% market share to be guilty of monopolistic practices.
http://en.wikipedia.org/wiki/United_States_antitrust_law
In the EU, you can have as little as 40% of the market and still be found liable:
http://en.wikipedia.org/wiki/Monopoly#Law
Apple is big enough to meet the test for the on-line digital music market, but defining just what the market is, is part of the issue. Apple is not dominant in the total “digital music market” which includes CDs, etc. – your 70% for this market is just wrong, even if you did get it from the news. (the correct figure is more like 27%)
http://www.nytimes.com/2010/05/26/technology/26apple.html
2. Just being big is not a violation of anti-trust law. Using your power in an anti-competitive way is. Getting music labels not to give Amazon exclusive access sounds like it would increase competition, not decrease it, even if it does demonstrate Apple’s economic clout.
I’m not saying Apple doesn’t engage in anti-competitive behavior. I’m just saying your example is very weak.
Furthermore, since Apple’s sales are not as growing as fast as Amazon’s,
http://www.techflash.com/seattle/2010/05/amazon_ties_wal-mart_as_no_2_music_retailer_behind_itunes.html
it is going to be hard to convince a court that Apple has been unfairly eliminating competition. (Trying doesn’t count; you have to succeed to be guilty.)
3. BTW, Apple is an economic monopoly as well. That’s what patents are all about: legal monopolies.
http://en.wikipedia.org/wiki/Patent
Apply and only Apple (or the people Apple licenses) can manufacture iPhones, iPads, etc.
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