The GiD Report#140 — ApplePay finally gets the antitrust attention it deserves

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GlobaliD

6 min readDec 22, 2020

Welcome to The GiD Report, a weekly newsletter that covers GlobaliD team and partner news, market perspectives, and industry analysis. You can check out last week’s report here.

Note: There was late breaking news about the SEC lawsuit against Ripple—WSJ and Fortune. We’ll cover that in next week’s report.

This week:

Coinbase IPO + new FINCEN wallet rules
Google antitrust lawsuit
Facebook v. Apple (full newspaper ad)
ApplePay antitrust scrutiny (it’s about time!)
Stuff happens

1. It was another big week, this time led by the news that Coinbase had filed for its IPO — a week after Bitcoin reached new all-time highs over $20K.

Here’s the WSJ:

Coinbase’s filing is the culmination of the yearslong development of both the company and the cryptocurrency industry, moving from an anarchist experiment in alternative money to a mainstream asset class that has attracted hedge funds, mobile-money providers and insurance companies.
Coinbase, founded in 2012 by Brian Armstrong and Fred Ehrsam, has grown into one of the most recognizable names in the cryptocurrency industry. It currently has about 35 million users, more than Charles Schwab Corp.’s platform.
FINCEN did its best to spoil the party, however, making good on recent rumors about new wallet rules (revealed in a series of tweets by Coinbase CEO Brian Armstrong not long ago).

Here’s Dealbook:

Late on Friday, the Treasury Department proposed a new disclosure rule for certain digital currency transactions “aimed at closing money laundering regulatory gaps.” Critics of the move in the cryptocurrency community decried the proposal.
Critics are focused on the process. While one crypto executive said that the rule, which requires disclosure for certain big transactions with the Treasury Department and had been rumored for some time, “could’ve been worse,” critics took particular issue with its rollout. The department is allowing only two weeks over the holidays for public comment, which they say isn’t enough time.

Relevant:

2. The antitrust hits also kept coming. It was Facebook again — but also Google.

Here’s CNBC (via Jakob):

Google is set to face a new antitrust lawsuit from a group of state attorneys general led by Texas, this time targeting its advertising technology services.
The announcement follows a separate complaint from the Department of Justice claiming Google has illegally maintained a monopoly in online general search services by cutting off competitors from key distribution channels.
The complaint claims Google and Facebook, which it names a “co-conspirator,” harmed competition through an unlawful agreement to rig auctions and fix prices.

Relevant:

3. Facebook made news elsewhere as well, though this time from the other side of the aisle, attacking Apple in a full-page newspaper ad about new iOS platform rules regarding tracking and privacy.

We’ve talked before about how legal action is only one prong in a multi-pronged attack when it comes to antitrust. The other is competition as well as showing people/consumers a better way. Facebook’s latest skirmishes with Apple show that, well, hey, a little bit of healthy competition isn’t all that bad now is it?

Here’s the ad (via /m):

Relevant:

And here’s the Information’s take:

It’s hard not to feel that Apple CEO Tim Cook has only himself to blame for the battle he now finds himself in with Facebook. Over the past few years he spent an inordinate amount of time preaching about the evils of the advertising-based business model of Facebook and others. It’s not a surprise Facebook CEO Mark Zuckerberg would retaliate. For all of Cook’s sermonizing, Apple is not free of sin when it comes to how its customers are treated (as anyone buying one of Apple’s high-priced cables could attest.)
And whatever the merits of Facebook’s argument — which focuses how Apple uses its control of the App Store to hurt developers and advertisers — one thing seems clear. The dispute between the two companies foreshadows a loosening of the gatekeeper powers enjoyed by all the big tech companies, whether Apple, Google or Facebook.
After all, it’s one thing for small companies to complain about the power of big companies. That happens all the time and sometimes feels like sour grapes. But when members of the big tech cartel are also speaking out about the gatekeeper status of one of their colleagues, you know something is wrong.
The whole point of scale in business is that it empowers you to fight others with scale. What Facebook’s complaints suggest is that even great scale isn’t enough to deal with one company’s control of the mobile ecosystem. And Facebook isn’t the only big tech company to complain about Apple’s App Store — Microsoft has also raised concerns about it.
There used to be a saying about the hazards of attacking a newspaper: “Never pick a fight with someone who buys ink by the barrel.” Perhaps Tim Cook should have realized that he shouldn’t pick a fight with someone who has three billion users. — Martin Peers

3. Speaking of Apple, ApplePay is also getting caught in the antitrust crossfire.

Which makes sense. We’ve all about had it when it comes to Big Tech leveraging their platforms to force us into anti-competitive payment rails.

Here’s the FT:

Apple’s next antitrust battle is shaping up to be over Apple Pay, the company’s digital wallet, as the Covid-19 pandemic turbocharges use of contactless payments.
The Cupertino company has spent much of 2020 fighting allegations of anti-competitive behaviour in its App Store. By contrast, its financial services business has attracted little attention in the US, meriting only a passing mention in a 450-page report by Congress’ antitrust subcommittee in October.
But Apple Pay is growing fast as consumers try not to touch buttons or handle cash because of the coronavirus. Jennifer Bailey, head of Apple Pay, said this month that contactless payments have gone from “being a convenience to a matter of public health.”
Jason Gardner, chief executive of California-based payments platform Marqeta, said: “They are really building out, within the Apple Pay team, a financial services juggernaut.”
“Apple Wallet is a killer app — more of a killer app than much of the world really understands right now. And it’s absolutely going to become a battleground for regulators in the future.”
In June, the European Commission opened a formal antitrust probe into Apple Pay and this month competition regulators in the Netherlands launched their own investigation. Australia’s central bank chief Philip Lowe recently said Apple’s approach to payments was “raising competition issues”.

Relevant:

Apple Pay draws antitrust attention

The GiD Report#140 — ApplePay finally gets the antitrust attention it deserves

1. It was another big week, this time led by the news that Coinbase had filed for its IPO — a week after Bitcoin reached new all-time highs over $20K.

2. The antitrust hits also kept coming. It was Facebook again — but also Google.

3. Facebook made news elsewhere as well, though this time from the other side of the aisle, attacking Apple in a full-page newspaper ad about new iOS platform rules regarding tracking and privacy.

3. Speaking of Apple, ApplePay is also getting caught in the antitrust crossfire.

4. Stuff happens

Written by GlobaliD