It’s a move that has stirred up the entire tech industry: the US government, through the Department of Justice (DOJ), is suing Apple for what it considers an unfair and illegal monopoly building around the iPhone.
You can read the entire filing here, but we’ll break down the key points here – why Apple is being sued, what it could mean for the iPhone and the tech industry in the future, and what the arguments are from both sides.
The story is likely to dominate tech headlines for years to come and raises fundamental questions about what is fair and right in the tech business – how far should big tech be allowed to go to protect market share and increase revenue? And how this could change the iPhone and the devices we use every day – let’s explore…
Apple’s lawsuit: Why was Apple sued?
According to the DOJ, Apple’s “exclusive behavior” over the years has made it difficult for users to switch smartphones and for other companies to innovate their own apps and products, raising costs for developers, businesses and consumers. Those are the three main points of attack in the case against Apple.
More specifically, we’re talking about decisions like Apple blocking iMessage clients on Android phones, imposing a 30% tax on every in-app purchase, and not enabling Android support for the Apple Watch. These are the same issues that Apple is having trouble with in the EU, although there is no guarantee that the US rulings will be the same as in Europe.
According to the lawsuit, Apple’s unfair practices touch on web browsing, video calling, news subscriptions, entertainment services, automotive services, advertising, location services and more. It’s clear that Apple is heavily protective of technologies like FaceTime and CarPlay – but the big question is, is it anti-competitive?
Apple’s lawsuit: Does the iPhone really have a monopoly?
That’s what the lawsuit alleges, though Apple, of course, disagrees. There will be a lot of debate about this: for starters, no one is sure what market share the iPhone has in the US, although most estimates hover around 60%. The US lawsuit introduces the rather vague concept of the “performance smartphone market”, of which iPhones allegedly make up more than 70%. Worldwide, about a fifth of smartphones sold are iPhones, which is hardly a monopoly level.
Since the lawsuit was filed in the US, most of the discussion will likely focus on Apple’s home country. Whichever number you choose, more iPhones than Android phones are sold in the United States—is it because the iPhone is better, or because Apple is making the switch to Android harder than it should be? That is the key question in this case.
As our US Editor-in-Chief Lance Ulanoff says, “It seems to me that the DOJ is confusing ‘monopoly’ with ‘ecosystem.’ Apple’s complete control, from silicon to components to platform and consumer hardware, is nearly unmatched in the industry. Apple’s ecosystem and the significant consumer benefits it offers stem directly from that control.”
Apple’s lawsuit: How did Apple respond?
You’d expect Apple to reject the DOJ’s claims, and it did so vehemently: “We believe this lawsuit is wrong on the facts and the law, and we will vigorously defend against it,” Apple told us. “This lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets.”
For almost every point made by the DOJ, Apple’s argument is that it is actually protecting users and (legally) protecting its own business in an extremely competitive market. For example: keeping iMessage exclusive to Apple products means Apple can ensure the security and privacy of conversations on the platform, Apple claims.
Apple has also pointed to the vast sums of money it generates for app developers — far more than developers get through Android — and believes it’s far easier to switch between iPhones and Android phones than the DOJ claims. Moreover, it says a US government victory here would set a “dangerous precedent” when it comes to government interference in technological innovation and business freedom.
Apple’s lawsuit: what happens next?
A lot of legalese, to put it simply. This will take years to resolve, so don’t expect anything to happen to iPhone or iOS right away. If Apple wants to avoid a long and drawn-out court battle, it could agree to a settlement — which some analysts suggest could take between 12 and 18 months.
Consider the case of Epic Games v. Apple, which specifically challenged Apple’s insistence that all iOS developers must accept in-app payments through the Apple App Store—and only the App Store. Appeals on that case were still pending in January 2024, although the proceedings had begun in August 2020. This is a much more complicated and far-reaching case.
For now, we are still waiting for the lawsuit to be assigned to a judge. After that, Apple could request that the case be dismissed on the grounds that it is without merit. Notably, the suit was brought in the state of New Jersey, which may have been a strategic choice to have the case heard by litigants friendly to antitrust rulings.
What does this mean for the iPhone?
We’re still in the very early stages of this legal battle, so it’s hard to know for sure how this will affect the iPhone in the future. We can get some clues from what has already happened to Apple in the EU: however the case is decided, it is likely that Apple will have to make some changes and concessions to the DOJ.
For example, users in the EU can now install alternative third-party iPhone app stores other than the official Apple one. This gives users more choice about where they get their apps and games from, and gives developers the ability to charge for in-app purchases without giving Apple a 30% cut directly.
Apple is also taking several preemptive steps to avoid antitrust legislation. It now enables so-called ‘super apps’ – apps that offer access to many other apps, such as cloud gaming portals – on the App Store. It’s also adding support for the RCS standard to its Messages app sometime this year.
This is what we’re likely to see in the future: a more open iPhone, one that’s friendlier to other platforms and devices. It’s hard to know how sweeping the changes will be, but we may end up talking about iMessage and FaceTime on Android, or an Android-powered Apple Watch (something Apple said it was already considering, by the way).
It will be fascinating to watch this unfold, and we’ll keep you updated every step of the way. Still, it seems clear, for better or worse, that the iPhone and other Apple devices will never be the same.