US Steel/Apple vs The DOJ
You may not know this but I have a lukewarm feeling towards monopolies. Some work out, some don’t. I also believe that no matter where there is a monopoly there is an opportunity so keep that in mind.
I bring up these two Biden Administration overreaches today because I honestly don’t understand either one and why the White House has an issue. Don’t think for a moment it’s not the White House behind these two moves. They have stated that from the very beginning they were going to be looking at everything and anything that looked anti-competitive to them. That’s the key. Their version of anti-competitiveness strikes me as heavy handed, trying to control what businesses do in their normal course of business.
The Nippon Steel take over of US Steel has a smell to it. The shareholders feel the price is right. They do not care that this venerable company will be owned by a foreign entity. The unions have agreed as well. They know their contracts better than I do and if these people believe that this is in their best interest, they are going to go for it. I am sure there have been multiple lawyers and union reps looking over this deal and that the assurances by Nippon have made them comfortable. So why block it?
One reason which is hocus is the US Government does not want a foreign entity owning a company as strategic as US Steel. Why? The technology? Huh? They make rolled steel. It’s a muscular job and the technology in Japan is probably 10 years ahead of US Steel here in the US. Some US Steel plants are 80 years old. What are they gonna steel? 80 year old desks? The control of a major supplier in steel for the military is questionable. Think about it. You pay 14 billion dollars for a company to have a strategic partner in the greatest market on earth. You are going to screw that up by doing something to have major contracts cancelled? The Japanese are not stupid. They want this and everyone else wants it as well. Why block it?
Let’s not only blame the Biden Administration for this because I am sure if Donald Trump is put back in office he will go the same route. The funny thing is that US companies have no problem going out and buying foreign competitors yet when some corporation wants to come in and buy a barely hanging in there business at a premium we think it’s as bad as stealing the Lindberg baby.
What’s fair for the goose should be fair for the gander.
Next one is not so cut and dried.
The Apple vs US antitrust case is going to be an expensive exercise in true government overreach.
As much as I am frustrated by Apple and their manufactured products lifespans, all I can say is that Apple is the best run, smartest company this country has ever produced. They make exceptional products and consistently outperform every other product in their individual categories. They deserve to charge whatever they want. No one is putting a gun to anyones head to buy an IPhone or a Mac. You buy it, pay a premium because it is the absolute best product out there at any price.
They want to protect that phone and it’s ecosystem and the Feds want them to give up that advantage and allow competitors an exact level playing field. Why? They built it, they want to control it and the profits it creates. They have relationships with thousands of developers who are ok with the way things are arranged now.
They know once that they meet Apples strict requirements they can put out a product that will be compatible with the best product on the planet. They know for that advantage they have to give up more than they would on Android but they don’t care.
Besides Worldwide, Android has a commanding lead over IOS and there are probably twice as many apps on Android as there are on the IOS operating system.
The Justice department (Biden White House) believes that Apple’s dominance in the US is monopolistic. I don’t agree and I think as this plays out you will see Apple grudgingly give up something to move past this, but maybe not.
I don’t think that this is a matter of survival for Apple but however it shapes up it will be costly and that is exactly what the administration wants. Make em pay and pay until they do as we say.
This has much deeper implications of course. If someone spends billions developing a technology down the road and reaps the rewards of that time, effort and expense, will they eventually have to give up a share of that to competitors? They shouldn’t, competition is good and healthy and when someone wins that competition they should have to spread the spoils.
Remember I am no lawyer and I don’t even play one on TV but I can read and I think if you have the time, try and find Professor Richard Epstein’s take on both of these developing stories. He is very clear and concise and like me, he has no love for the Biden White House and their storm trooper tactics.