The US Department of Justice (DoJ) filed a watershed antitrust lawsuit against Apple, accusing it of engaging in anti-competitive conduct that hurts both consumers and developers.
US Attorney General Merrick Garland stated on a DoJ briefing that “Apple has maintained monopoly power in the smartphone market, not simply by staying ahead of the competition on the merits, but by violating federal antitrust law”.
“Consumers should not have to pay higher prices because companies break the law,” he stated.
Garland explained Apple has employed a strategy that relies on exclusionary, anti-competitive conduct, which has resulted in “fewer choices for consumers, higher prices and fees, lower quality smartphones, apps and accessories and less innovation from Apple and its competitors”.
“For developers, that has meant being forced to play by rules that insulate Apple from competition,” he noted.
“As outlined in our complaint, we alleged that Apple has consolidated its monopoly power, not by making its own products better, but by making other products worse”.
Merrick Garland US Attorney General
He said Apple carries out its exclusionary anti-competitive conduct in two visible ways. The first is imposing contractual restrictions and fees that limit the features and functionality developers can offer iPhone users.
Secondly, he stated “Apple selectively restricts access to the points of connection between third party apps and the iPhones operating system, degrading the functionality of non-Apple apps and accessories”.
Garland noted for most of the past 15 years, Apple has collected a 30 per cent commission on the price of any app downloaded from the App Store, as well as in app purchases.
Threaten free and fair markets
In January 2023, Apple opened up developer access to its App Store across the European Union to comply with the Digital Markets Act (DMA) rules that went into effect in March.
Garland also stated the tech giant has suppressed the emergence of cloud-streaming apps, including gaming apps, as well as “super apps” that could reduce user dependence on Apple’s own operating system and expensive hardware.
He also stated Apple has made it difficult for users to engage in cross-platform messaging between Android and iPhone devices.
For example, he noted Apple Watch only works with iPhones and stated the company has blocked third party developers from creating digital wallets that would compete against its own proprietary payment service.
“Monopolies like Apple’s threaten the free and fair markets upon which our economy is based”.
Apple has not yet responded to Mobile World Live’s request for a comment on the lawsuit, which also includes 15 states and the District of Columbia. The company told NBC News the 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”.
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