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Photo: Lynne Cameron - PA Images/Getty Images

An antitrust lawsuit against Apple and growing calls to break up Facebook tee up what's likely to be a lengthy, contentious debate over the boundaries of technology markets.

Why it matters: As calls mount to break up big tech companies or limit their power, their legal fate will hang on how judges and regulators define their markets.

Driving the news: The U.S. Supreme Court ruled Monday that a class action suit by users charging Apple's App Store with monopolistic behavior could move forward.

The big picture: Here's why "market definitions" are so central to antitrust fights.

  • Say you run the only restaurant in town — do you have a monopoly?
  • If the market is defined as "restaurants" or "dining out," then you do.
  • If the market is defined as "meals" or "food," well, people can buy groceries and cook, right?
  • One way, you're a monopolist — the other, you aren't.

In the App Store suit, users charge that Apple, by forcing developers to sell iPhone apps only through Apple's storefront and taking a cut of those sales, drives up prices.

  • Apple has argued that, among other things, users can access software and services via the web browsers on their phones, and that the majority of apps accessed from the App Store are free downloads that don't earn it a penny.

If you define the market as "iPhone apps," Apple looks a whole lot like a monopolist — it maintains complete control over the space.

  • You can't put a non-App Store app on an iPhone without "jail-breaking" it, tampering with the operating system in a way that violates Apple's terms and voids the warranty.

If instead you define the market as, say, "smartphone apps," you get a different outcome.

  • That's because users are free to buy Android phones and access a very different universe of apps. Users have choice — presto, no monopoly.

The same principles apply in the debate over breaking up Facebook.

  • In his recent essay arguing that Facebook has become too powerful, co-founder Chris Hughes argued that the company "is a powerful monopoly, eclipsing all of its rivals and erasing competition from the social networking category."
  • "The social networking category" is a way to define this market that most readily casts Facebook as a monopoly.
  • But if you call it "messaging," then Apple, Snapchat, and the cellphone providers all look like hearty competitors.

Similarly, in many countries, Google looks to have a monopoly in the search market. But if you define the market instead as "online information," the case is a lot murkier.

  • Google's Android practices have also come under antitrust scrutiny. Last year an EU ruling that penalized Google for practices involving the Android Play Store declared that Google had a monopoly in that market.

Our thought bubble: In tech, market definitions are unusually fluid because hardware evolves quickly and software is infinitely malleable.

  • Lawsuits and antitrust cases move slowly, and in the time they can be tried, the markets tend to have mutated.
  • But the tech giants' power has grown so vast that many critics see antitrust remedies as the only way to rebalance the industry's game.

Go deeper

House passes $768 billion defense spending bill

Photo: Andrew Harrer/Bloomberg via Getty Images

The House approved a $768 billion National Defense Authorization Act (NDAA) for the 2022 fiscal year in a bipartisan 316-113 vote on Thursday.

Why it matters: The annual bill, which authorizes Pentagon spending levels and guides policy for the department, would require women to register for the military draft, among other provisions.

5 hours ago - Politics & Policy

Republicans’ secret lobbying

Illustration: Shoshana Gordon/Axios

The five Senate Republicans who helped negotiate and draft the $1.2 trillion bipartisan infrastructure bill have been privately courting their Republican colleagues to pass the measure in the House.

Why it matters: House GOP leaders are actively urging their members to oppose the bill. The senators are working to undercut that effort as Monday shapes up as a do-or-die moment for the bipartisan bill.

CBC members nix border visit

A Haitian migrant carries a toddler on his shoulders today as he crosses the Rio Grande River. Photo: Pedro Pardo/AFP via Getty Images

Several members of the Congressional Black Caucus weighed visiting the U.S.-Mexico border this week to investigate the conditions faced by Haitian migrants and protest allegations of inhumane treatment by U.S. agents.

Why it matters: It's a thorny proposition both in terms of timing and messaging. Going assures a new wave of negative headlines for President Biden amid sinking popularity. And with congressional deadlines in the coming days over infrastructure, a possible government shutdown and debt-limit crisis, Democrats can't afford to lose any votes in the House.