New York
CNN
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“Buy your mom an iPhone.”
That was Apple CEO Tim Cook’s famous response at Vox’s 2022 Code conference, when a reporter complained that her mother couldn’t see the videos she sent to her mom’s Android phone because they were grainy and slow.
It’s also a joke that U.S. Attorney General Merrick Garland cited — and sharply criticized — Thursday at a news conference announcing the Justice Department’s landmark antitrust lawsuit against Apple, in which the Biden administration and 16 states allege that Apple is illegally abusing the iPhone’s monopoly power in the smartphone market. .
A massive lawsuit against one of the world’s largest companies claims that Apple is breaking the law by carefully curating its app store and user experience, designed to lure customers into buying Apple’s products and services — to the exclusion of competitors.
Apple said in a statement that it disagrees with the lawsuit and will vigorously fight it.
“This lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets,” the company said.
If successful, the lawsuit could force Apple to relax some of the restrictions it has placed on its “walled garden” approach to hardware and software. It could open up its iPhone to alternative app stores and its technologies like iMessage with Android phones.
In its complaint, the Justice Department outlined five ways it claims Apple is abusing its dominant position to the detriment of Americans.
With iMessage, Apple created an enhanced text messaging service that allows people to communicate seamlessly with each other, sending rich text, high-quality video and audio that loads almost instantly—as long as it’s being sent to another iPhone user.
When these messages are sent to people with Android phones, they look grainy and can load slowly, and may miss out on key features like emoji replies, editing functionality, and end-to-end encryption. The dreaded “green bubbles” that mark Android users inside iMessage — and especially lower-quality performance — are illegal, the Justice Department claims.
“As any iPhone user who has ever seen a green text message or received a tiny, grainy video can attest — Apple’s anti-competitive behavior also includes making it difficult for iPhone users to message users of non-Apple products,” Garland said Thursday. “As a result, iPhone users perceive competing smartphones as inferior because the experience of messaging friends and family who don’t have iPhones is poorer — even though Apple is responsible for cross-platform messaging. And he does it on purpose.”
Apple said last year that it would adopt a new technology standard for communicating with Android phones that would open up some, but not all, of these features. The green bubbles will remain.
Apple has helped revolutionize the way we pay for things, connecting customers’ credit cards with the technology inside the iPhone to make payments more secure and seamless. And Apple takes a small payment for each transaction.
But Apple Pay is the only way iPhone owners can pay for things using the technology on the iPhone. Apple, citing security reasons, does not allow third-party apps to access the chip that enables iPhones to make mobile payments. It could also lead some customers to stick with the iPhone when they would otherwise switch to a competitor, the lawsuit said.
“Apple is also denying users the benefits and innovations that third-party wallets would provide,” the Justice Department said in its complaint. “Multi-platform digital wallets would offer an easier, more seamless and potentially more secure way for users to switch from an iPhone to another smartphone.”
The Apple Watch, one of Apple’s most successful products, is not compatible with Android phones – on purpose, the Department of Justice claims.
While some smartwatches work seamlessly with any type of smartphone, Apple Watches, the market leader, require an iPhone to work. This locks customers into Apple’s hardware and software ecosystem, forcing Apple Watch buyers to buy an iPhone.
“Apple uses smartwatches, an expensive accessory, to prevent iPhone users from choosing other phones,” the Justice Department said in its complaint. “After copying the smartwatch idea from third-party developers, Apple is now preventing those developers from innovating and limiting the Apple Watch to the iPhone to prevent a negative ‘impact on iPhone sales’.”
The only way to get apps on the iPhone is through Apple’s proprietary app store. Apple has long argued that its approach to maintaining which apps can and cannot be used on the iPhone helps users. Prevents spam and harmful apps, Apple says.
It forces apps into Apple’s heavy-handed restrictions and expensive 30% commissions, the Justice Department claims. And it limits competition.
For example, the Department of Justice lists cloud gaming app stores as a service that Apple illegally prevents from appearing on the iPhone. Companies that want to stream games to users have to upload each individual game to the app store, which prevents companies from marketing and selling potentially powerful and popular competing technology to customers.
Apple forces app developers to write code specifically for its operating system, limiting developers to code using universal languages that could offer a single app experience on any device.
This prevents apps from becoming “super apps” – apps that run identically on Apple’s iOS iPhone operating system and Google’s Android OS. Apple also restricts “mini-programs” — apps within apps that effectively run on the web. The Justice Department says that requirement locks developers into Apple’s system.
“Since at least 2017, Apple has arbitrarily imposed opt-out requirements that unnecessarily and unjustifiably restrict mini-programs and super apps,” the Justice Department said in its complaint. “Apple has exercised its control over app distribution to stifle other people’s innovation.”