The United States Department of Justice, joined by 16 state and district attorneys general, filed a civil antitrust action against Apple for monopolizing or attempting to monopolize smartphone markets in violation of Section 2 of the Act Sherman. You can read the full text of the filling here (PDF).
The government claims that Apple used contractual and technological restrictions to limit developers so that it was harder for them to compete with Apple’s products and services, and harder for iPhone users to upgrade to Android.
“Apple is undermining apps, products and services that would otherwise make users less dependent on iPhone, promote interoperability and reduce costs for consumers and developers. Apple exercises its monopoly power to extract more money from consumers, developers, content creators, artists, publishers, small businesses, and merchants, among others. »
US Department of Justice
The suit also claims that “unless Apple’s anticompetitive and exclusionary behavior is ended, it is likely that Apple will expand and consolidate its iPhone monopoly to other markets and parts of the economy.” . »
It should be noted that the suit does not allege that Apple has a majority of the smartphone market and it is not about whether or not consumers can choose to purchase smartphones other than the iPhone. Instead, the suit accuses Apple of using its market power to give its own apps, services and products an advantage over others. For example, forcing third-party smartwatch makers to use APIs that limit their access and capabilities compared to what Apple can do with its own Apple Watch, or preventing third-party location trackers like Tile from working as well on all devices than that of Apple. own AirTags.
The DOJ divides its main complaints into five main categories:
- Blocking innovative super apps: Apple has disrupted the growth of apps with expanded features that would allow consumers to more easily switch between competing smartphone platforms.
- Removal of mobile cloud streaming services: Apple has blocked the development of cloud streaming apps and services that would allow consumers to enjoy high-quality video games and other cloud-based applications without having to pay for expensive smartphone hardware.
- Excluding cos-platform messaging applications: Apple has made the quality of cross-platform messaging worse, less innovative and less secure for users, so its customers must continue to buy iPhones for the iMessage platform.
- Decreased functionality of non-Apple smartwatches: Apple has limited the functionality of third-party smartwatches so that users who purchase the Apple Watch will face substantial fees if they do not continue purchasing iPhones.
- Limit third-party digital wallets: Apple has blocked third-party apps from offering Tap-to-Pay functionality, preventing the creation of cross-platform third-party digital wallets.
Although these are big-ticket items, the complaint says Apple’s anticompetitive behavior extends further, including “web browsers, video communications, news subscriptions, entertainment, automotive services, advertising, location services, and more.”
Apple issued the following response to the complaint:
At Apple, we innovate every day to make people love technology: by designing products that work together seamlessly, protect people’s privacy and security, and create a magical experience for our users. This lawsuit threatens who we are and the principles that distinguish Apple products in fiercely competitive markets. If successful, it would hamper our ability to create the kind of technology people expect from Apple, where hardware, software and services intersect. It would also set a dangerous precedent, allowing the government to take a heavy hand in the design of popular technology. We believe this lawsuit is erroneous on the facts and the law, and we will vigorously defend ourselves against it.
Apple
The Justice Department began its investigation into Apple in 2019 and has built a much broader case than most other regulatory agencies. The European Union, for example, has focused on the App Store and Tap-to-Pay functionality.
Apple has successfully defended itself against other antitrust lawsuits, most recently against Epic Games, but the scope here is much broader.
Whatever the outcome, it is unlikely to have a significant effect on users for some time. Resolving these cases can take years, and forced appeals are then often given even longer deadlines to give the company time to comply. Over the next couple of years at least, the most likely impact on Apple users would be for Apple to preemptively make minor changes to its policies and contracts, in an effort to argue that any issues past are already resolved and to prevent the government from imposing greater regulation. remedy.
