Today the United States Department of Justice has sued Apple, claiming the company has maintained an illegal monopoly over the smartphone market, locking in its customers, driving up prices, and selectively imposing contractual restrictions on developers, withholding critical ways of accessing functionality to prevent competition.
“Apple exercises its monopoly power to extract more money from consumers, developers, content creators, artists, publishers, small businesses, and merchants, among others”, the DOJ says, along with the 16 state and district attorneys it filed the lawsuit with.
If you were wondering – yes, the green bubbles are mentioned. In fact, suppressing the quality of messaging between the iPhone and competing platforms is one of the main points of the case.
It also covers limiting the functionality of third-party smartwatches on its iPhones and making it hard for Apple Watch users to switch from the iPhone, and blocking third-party developers from creating competing digital wallets with tap to pay functionality for iOS. Ironically, Apple was recently forced to allow such third-party digital wallet functionality on iPhones in the EU through that bloc’s newly enforced Digital Markets Act, but – Apple being Apple – it only opened that up in the EU and nowhere else.
Apple is also accused of “disrupting” so-called “super apps” (think WeChat / Weixin in China and you get the idea, we’re talking apps that are messaging apps, payment apps, shopping apps, and even hubs for other apps all at the same time). Apple is said to have done this on purpose because it realized allowing such apps would degrade “iOS stickiness” and make it easier for users to switch to competing devices.
Another point is that Apple has been restricting the availability of cloud streaming apps for things like games by having unreasonable requests (each game should be individually submitted to Apple for its usual vetting process, for example, even if it’s a streaming title). This is allegedly being done so that people can’t just run any game on very cheap hardware mitigating the need to upgrade to a new iPhone every few years.
DOJ Antitrust Division Chief Jonathan Kanter said:
For years, Apple responded to competitive threats by imposing a series of ‘Whac-A-Mole’ contractual rules and restrictions that have allowed Apple to extract higher prices from consumers, impose higher fees on developers and creators, and to throttle competitive alternatives from rival technologies.
The DOJ us asking the US District Court for the District of New Jersey to stop Apple from “using its control of app distribution to undermine cross-platform technologies such as super apps and cloud streaming apps” and prevent it from using “private APIs to undermine cross platform technologies like messaging, smartwatches, and digital wallets”, and from “using the terms and conditions of its contracts with developers, accessory makers, consumers, or others to obtain, maintain, extend, or entrench a monopoly”.
Apple responded through spokesperson Fred Sainz, who said:
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. It would also set a dangerous precedent, empowering government to take a heavy hand in designing people’s technology. We believe this lawsuit is wrong on the facts and the law, and we will vigorously defend against it.
