The DOJ accuses Apple of operating as a monopoly, and the implications of the case extend far beyond iOS and the iPhone itself
Apple’s antitrust oversight she reached a fever. The US Department of Justice announced on Thursday that it has filed a lawsuit accusing the company of acting like a monopoly in locking out iPhone customers and restricting competition in building hardware and software. The lawsuit, which comes on the heels of significant antitrust cases against Apple outside the US, is a wide-ranging and complicated matter, but we’re covering the details of the DOJ case, industry reaction, and any ongoing implications for businesses and customers.
We’ll update this page as Apple’s antitrust case develops, but keep in mind that little will be resolved in the short term. Experts estimate that it takes three to five years to solve the case.
DOJ Lawsuits Against Apple
If you want to dive right into the legal documents, you can read the DOJ complaint right here. But for the rest of us, there are five categories that the complaint identifies as areas where Apple actively suppressed competition.
“Super” applications: These are applications that contain numerous functions within one application. This should ring a bell for anyone following Elon Musk’s “all apps” aspirations for the X, and the DOJ claims that Apple is holding back their success in order to increase dependence on the iPhone.
Messaging apps: The DOJ specifically cites the blue bubble, green bubble effect as a factor that discourages iPhone users from adopting a competing device. “This effect is particularly strong for certain demographic groups, such as teenagers — where the share of iPhones is 85 percent, according to one survey,” the DOJ said in the lawsuit.
Cloud Streaming Gaming Apps: The DOJ’s lawsuit highlights Apple’s alleged opposition to cloud gaming, arguing that its actions are aimed at preventing consumers from playing games “without requiring users to purchase powerful, expensive hardware.”
Digital wallets: Although the 0.15% fee Apple takes on all transactions made through Apple Pay is a fraction of the company’s total revenue, the DOJ argues that Apple Pay’s ubiquity within its mobile ecosystem means it has “complete control” over users’ NFC payments and is disrupting competitors.
Cross-platform compatibility of the smartwatch: This DOJ claim is simple. By limiting the functionality of Apple watches with non-iPhone devices, the lawsuit claims, “it becomes more expensive for that user to purchase another type of smartphone.”
The response from Apple and the wider industry
On Thursday, Apple issued a comprehensive series of rebuttals to the DOJ’s claims, which you can view in full detail right here. The crux of Apple’s argument is that regulators selectively choose metrics that make Apple’s strength in the smartphone market appear more dominant than it actually is, in their view. And by regulating conduct that the DOJ claims is monopolistic, Apple’s competitive advantage in the market would be diminished, thereby adversely affecting iPhone users.
“This lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets. If successful, it would hinder our ability to create the kind of technology people expect from Apple – where hardware, software and services intersect,” Apple said in a statement provided to TechCrunch.
App makers have been less critical of the DOJ’s case, and the Coalition for App Fairness (CAF) has expressed strong support for the DOJ’s regulatory action, which is not surprising given that several of its members, such as Epic Games and Spotify, have already had public disputes with Apple on App Store practices.
“The DOJ’s complaint details Apple’s long history of wrongful conduct — abusing their App Store guidelines and developer contracts to drive up prices, extract excessive fees, degrade the user experience and stifle competition,” CAF CEO Rick VanMeter said in a statement. on Thursday. “The DOJ joins regulators around the world who have recognized the many harms of Apple’s abusive behavior and are working to address it.”
What could this mean for iPhone users and what’s next?
In the immediate perspective, not much. The release of the lawsuit and the ensuing disagreements between Apple and the DOJ were a series of activities that will take years to resolve. The DOJ’s antitrust case against Google, filed back in 2020, went to trial last year and could take several more years to reach a conclusion.
What you should not expect is that the present will unfold like the past. Although the DOJ cites a successful antitrust prosecution against Microsoft in the 1990s, there are many differences between the two cases, mainly the gap between how easy it is to define Microsoft’s market dominance compared to Apple’s current status quo.
Read more about Apple’s antitrust lawsuit here: