A Justice Department antitrust lawsuit against Apple aimed at forcing the tech giant to lower barriers to entry to its app store is likely to clash with the US’s goal of preventing apps like TikTok from accessing American smartphones.
In the lawsuit, the Department of Justice and the attorneys general of 15 states and the District of Columbia claim that Apple Inc. violated antitrust laws by using its dominant iPhone platform to freeze out competitors and by using its influence in the app store to block some apps and raise prices for consumers.
Attorney General Merrick B. Garland said Apple “selectively restricts access to connection points between third-party applications and the iPhone operating system, degrading the functionality of non-Apple applications and accessories.” The goal of the lawsuit, Garland said, is not to prevent Apple from vetting apps, but to ensure that Apple does not engage in “exclusionary” actions that affect competitors.
Just a week earlier, the House of Representatives overwhelmingly passed legislation requiring Apple and Google to stop allowing TikTok in their app stores unless ByteDance, the app’s Chinese owner, hands it over to a company not owned by a foreign rival. Lawmakers are concerned that TikTok is sending Americans’ data to Chinese authorities.
The Senate has yet to take up that measure. President Joe Biden has said he will sign the bill if Congress approves it.
The two actions seem at odds with the role the US government expects app store owners to play, said Daniel Castro, vice president of the Information Technology and Innovation Foundation, a think tank that focuses on innovation policy.
Congress wants “these platforms to be gatekeepers only sometimes, when they want to potentially block TikTok. But they don’t want to be the gatekeepers when they do things to ensure the privacy, security and integrity of their platforms,” Castro said.
“You can’t have both,” he said.
Apple said its iPhone platform and app store policies are designed to protect user privacy and security and ensure that Apple’s various devices “work seamlessly together.” The company intends to “vigorously defend” the lawsuit’s allegations, a company spokesman said in an email.
Sen. Amy Klobuchar, D-Minn., who chairs the Senate Judiciary Committee’s competition, antitrust and consumer policy subcommittee, welcomed Apple’s lawsuit.
“As the watchdog that controls the smartphones used by more than half of all Americans, Apple has limited consumer choice, raised prices and prioritized its own products and services — reducing quality and innovation throughout the digital economy,” Klobuchar said in a statement.
Klobuchar said she will continue to push for her own laws that call on app store owners to stop favoring their own apps and services over those of competitors.
While the United States grapples with the twin challenges of the security risk posed by TikTok and ensuring that the technology market remains fair and open, on the other side of the Atlantic the European Union’s Digital Markets Act came into effect on March 6. EU law requires Apple and Google to allow consumers to access and download apps outside of the two companies’ app stores.
Separately, the EU also fined Apple $2 billion in early March for unfairly favoring its own music streaming service and barring competitors like Spotify from offering cheaper subscriptions outside of Apple’s app store.
The EU’s approach would “basically enable side-loading of apps,” allowing iPhone users to put whatever apps they want on their smartphones, “which completely undermines Apple’s closed model,” Castro said.
The US antitrust lawsuit’s aim to open up Apple’s platforms to third-party payment systems, smartwatches, messaging apps and streaming services could not only pose risks to consumer security and privacy, but also help non-US tech companies gain an advantage over US companies, Castro said.
Justice Department officials, including Acting Assistant Attorney General Benjamin Mizer, compared the latest lawsuit to the department’s 2001 antitrust action against Microsoft, which alleged that the company used its Internet Explorer web browser to exclude competition.
Although the US District Court for the District of Columbia ruled that Microsoft’s actions constituted an illegal monopoly, the decision was partially overturned on appeal. The two sides later reached a settlement, with Microsoft agreeing to change some of its practices.
At a news conference last week, Mizer and Assistant Attorney General Jonathan Kanter said Microsoft’s case paved the way for the launch of “iTunes, the iPod and eventually the iPhone, without anti-competitive restrictions, excessive fees and retaliation.”
Officials said the current case against Apple could spur innovation and new technologies from other companies.
But the rise of tech rivals from China and other parts of the world could mean Apple’s weakening doesn’t necessarily lead to other U.S. companies taking its place, but to companies outside the U.S. stepping in to take advantage, Castro said.
“The global economy and competition looks very different today than it did 25 years ago,” Castro said. “There’s no reason to think that the next messaging apps, streaming services and digital payment systems will necessarily be built in the United States” if Apple and other U.S. companies are weakened as a result of antitrust actions, Castro said.
After all, TikTok, one of the most successful social media apps, was not made in the United States, Castro said.