The Justice Department and 16 state attorneys general filed a major antitrust lawsuit Thursday aimed at forcing Apple to open up many aspects of its ecosystem, from the App Store to the Apple Watch.
The 88-page civil lawsuit, which accuses Apple of wielding monopoly-like power, could bring some really big changes to the iPhone, Mac and other Apple computers.
The Justice Department’s antitrust lawsuit targets a large part of Apple’s ecosystem
With its antitrust suit, the DOJ is specifically targeting the iPhone, calling it central to Apple’s dominance in a wide range of industries. The lawsuit accuses Apple of “anti-competitive and exclusionary conduct” and seeks to restore competition that would lower smartphone prices, reduce developer fees and preserve “innovation for the future.”
For Apple, it’s the latest — and biggest — threat to the very nature of the iPhone, the unique product that drives the company’s revenue and propels the company to its high valuation.
Apple was already under pressure from the EU’s Digital Market Act to open up iOS to competition, resulting in side-loaded apps, alternative app stores and browser engines.
And now the Justice Department has taken its side of the Atlantic, demanding changes that could prove even more profound.
“Apple is undermining apps, products and services that would otherwise make users less dependent on the iPhone,” the DOJ said in a press release issued Thursday. “Apple is using its monopoly power to extract more money from consumers, developers, content creators, artists, publishers, small businesses and retailers, among others.”
Click this Dropbox link to read the entire 88-page antitrust lawsuit against Apple.
DOJ Calls Out Apple Watch and ‘Super Apps’
The DOJ cited the lack of an Android app to sync with the Apple Watch as an example of Cupertino’s anti-competitive behavior. Apple’s wearable device has twice the sales of any competitor. But without the necessary software, consumers can only use the Apple Watch with an iPhone. And that could make Apple Watch owners less likely to switch to Android.
And he accused the iPhone maker of stifling what it calls “Super Apps.” The Justice Department said, “Apple disrupted the growth of apps with broad functionality that would make it easier for consumers to switch between competing smartphone platforms.” However, he did not provide such examples.
Apple’s refusal to allow other payment systems to access the iPhone’s touch payment system has also come under fire, “preventing the creation of third-party digital wallets across multiple platforms,” according to the Justice Department.
In addition, regulators object to Apple’s policy of blocking cloud gaming services from the App Store. (That might explain why Apple reversed that rule in January.)
iMessage also appeared, with the DOJ claiming: “Apple has degraded the quality of cross-platform messaging, made it less innovative and less secure for users so that its customers must continue to buy iPhones.” (Apparently seeing the writing on the wall, Apple has committed to improving cross-messaging between iPhone and Android later this year.)
The Justice Department’s antitrust lawsuit could be a game-changer for Apple
The European Union’s Digital Markets Act brought major changes to the iPhone and iPad, but only in member countries. These include sideloading iPhone apps and the option to completely replace Apple’s Safari with another web browser.
The DOJ’s antitrust lawsuit (.pdf) against Apple could wreak havoc in the walled garden.
“This lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets,” an Apple spokeswoman said. The New York Times. “If successful, it would hinder 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, empowering the government to take a heavy hand in designing human technology.”
The result of a multi-year investigation
The Justice Department has been investigating Apple and the App Store since at least 2020, starting with the Trump administration. And Apple CEO Tim Cook testified when Congress held its own hearings on antitrust issues in Big Tech that same year.
The resulting lawsuit broadly targets Apple’s entire way of doing business.
“This case is about freeing the smartphone market from Apple’s anticompetitive and exclusionary conduct and restoring competition to lower smartphone prices for consumers, reduce developer fees, and preserve innovation for the future,” the DOJ’s complaint said.
The US states that joined the DOJ lawsuit are: Arizona, California, Connecticut, Maine, Michigan, Minnesota, New Hampshire, New Jersey, New York, North Dakota, Oklahoma, Oregon, Tennessee, Vermont, Wisconsin and the District of Columbia .
What’s Next for Apple’s DOJ Antitrust Lawsuit?
The Justice Department’s lawsuit seeks an unspecified financial penalty. It also wants the court to order Apple to open up Messages (which Apple is “undermining” with blue bubbles on Android), allow cloud streaming apps and alternative digital wallets with direct NFC access, and more, including:
- Allow cross-platform “super-apps” that perform a range of functions (probably something like China’s WeChat or Elon Musk’s X plans).
- Allow cloud streaming apps for things like video games.
- Enable better messaging between iOS and competing platforms, especially Android.
- Extend Apple Watch connectivity to alternative platforms to enable easier platform switching.
- Enable third-party digital wallets with touch payments.
However, Apple has already addressed some of these issues. In January, Apple opened the App Store to allow streaming apps and services. And Apple has committed to adding Rich Communication Services (RCS) to iOS 18, which would allow Messages to work better with Android.
The lawsuit and appeals are likely to drag on for years. Microsoft’s famous antitrust case in the mid-90s took more than eight years to end in court.
In addition, Apple has already successfully fought other antitrust lawsuits.
In Epic Games’ 2020 lawsuit over App Store restrictions, Apple successfully argued that the App Store largely used protecting users from malware and fraud. Apple also convinced the court that the App Store did not lock out consumers who easily switched between iPhone and Android.
The case isn’t a slam dunk: Apple has a good defense against the Justice Department’s charges, plus a history of prevailing in court. But various antitrust lawsuits — particularly the EU actions — are already changing the way Apple makes its products.