IP vs. Antitrust

Related:

• • Price Controls, Antitrust, and Patents (July 2011)
  • Antitrust vs. Trademark Law (June 2011)
  • The Schizo Feds: Patent Monopolies and the FTC (Aug. 2006)
  • IP vs. Antitrust (Sept. 2005)
  • The Microsoft-Apple Gesture Oligopoly
  • Controls breed controls, Monopolies breed monopolies

“IP vs. Antitrust,” Mises Economics Blog (Sep. 8, 2005). Archived comments below.

Update:

See Tim Higgins, “Inside Spotify’s Plot to Take Down Apple,” Wall Street Journal (Sept. 5, 2025): Grok summary:

Summary of the WSJ Article

The Wall Street Journal article, “Inside Spotify’s Plot to Take Down Apple,” details Spotify’s decade-long campaign to challenge Apple’s dominance over the App Store, particularly its 30% commission on in-app purchases, often referred to as the “Apple tax.” The conflict intensified when Apple launched Apple Music in 2015, pricing it at $9.99 compared to Spotify’s $12.99, with the difference attributed to Apple’s commission. Spotify, led by CEO Daniel Ek and later bolstered by former Microsoft lawyer Horacio Gutierrez, resisted Apple’s in-app payment system by attempting to bypass it, leading to repeated app update rejections by Apple. Spotify escalated the fight by engaging regulators, particularly in Europe, where it found an ally in EU antitrust chief Margrethe Vestager. Spotify’s 2019 complaint to the European Commission, supported by data showing Apple’s restrictive rules reduced subscription upgrades by 20%, led to a $2 billion fine against Apple in 2024 and the passage of the Digital Markets Act (DMA) in 2022, aimed at curbing Apple’s App Store control. In the U.S., a court ruling in April 2025 stemming from Epic Games’ lawsuit further weakened Apple’s grip by allowing developers to direct users to external payment systems. These developments threaten Apple’s highly profitable App Store, which accounts for an estimated 8% of revenue but boasts margins over 75%, at a time when iPhone sales face pressure and Apple lags in AI innovation.

Spotify’s strategy involved both legal battles and public advocacy, framing Apple as a monopolist akin to historical Robber Barons or 1990s Microsoft. By conducting experiments on Android to demonstrate how Apple’s rules stifled subscriptions, Spotify provided evidence to regulators, particularly in Europe, where the DMA now forces Apple to allow alternative payment methods. However, Apple’s recent compliance efforts, including new fees, have been criticized by Spotify as insufficient. The article, adapted from Tim Higgins’ book “iWAR,” portrays Spotify’s efforts as part of a broader rebellion by tech rivals like Epic Games, weakening Apple’s once-ironclad control over the App Economy and putting billions in profits at risk as the company navigates a shifting technological landscape.

Kinsella’s Predicted Response and Analysis

Stephan Kinsella, a libertarian legal theorist and critic of intellectual property (IP), would likely view the Apple-Spotify conflict as a clear illustration of how state-granted monopolies through IP laws like copyright distort markets and enable anti-competitive practices. Drawing on his writings, such as “Price Controls, Antitrust, and Patents” and “IP vs. Antitrust,” Kinsella would argue that Apple’s dominance in the App Store ecosystem is bolstered by copyright and related IP rights, which allow it to impose restrictive policies like the 30% commission, creating artificial barriers that hinder competitors like Spotify. These IP laws, in his view, foster unnatural market power, leading to reduced competition, higher prices for consumers, and stifled innovation, as evidenced by Spotify’s forced price disparity with Apple Music. He would emphasize that both IP and antitrust laws are unjust and should not exist, as they represent legislated interventions that deviate from a decentralized, discovery-based legal process akin to common law or customary systems.

While Kinsella opposes antitrust laws on principle—seeing them as flawed attempts to counteract the distortions caused by other state interventions like IP, as discussed in “Controls breed controls, Monopolies breed monopolies”—he would not criticize Spotify for leveraging antitrust mechanisms, such as the EU’s Digital Markets Act or U.S. court rulings, to defend against Apple’s IP-backed dominance. In a world where both sets of laws exist as part of the positive legal framework, companies like Spotify are justified in using available tools to mitigate the harms inflicted by IP monopolies. However, Kinsella would maintain that the ideal solution is the abolition of both IP and antitrust laws, allowing market forces in a free society to naturally regulate behavior without state-imposed privileges or corrections. In such a system, without copyright protections, Apple would face greater competitive pressure, compelling it to adopt more reasonable policies toward developers like Spotify to retain market share.

Kinsella’s broader critique, as outlined in “Legislation and the Discovery of Law in a Free Society,” would frame this dispute as a consequence of the dominance of legislated law in modern systems, which he sees as the primary source of injustice rather than positive law itself. Positive law—the existing body of rules in a society—can be just if rooted in decentralized, evolutionary processes like common law or customary law, but becomes problematic when shaped by state legislation, leading to inconsistencies and conflicts like those between IP grants and antitrust remedies. The Apple-Spotify saga exemplifies how legislated laws create a cycle of state-granted power and subsequent regulatory battles, with judges forced to engage in arbitrary balancing acts. Ultimately, Kinsella would advocate for a shift away from state-controlled legislation toward a free-market discovery of law, where neither IP monopolies nor antitrust interventions distort economic interactions, fostering genuine competition and innovation.