After years of complaints by competitors, and an equally lengthy investigation, an antitrust lawsuit has finally been filed against Apple by the US Department of Justice — and it's going after almost every part of the company.
Apple has been sued by the Department of Justice
There have been threats of a lawsuit from the US Department of Justice since the 2019 case with Spotify that opened antitrust investigations into Apple. Multiple complaints have arisen since then, prompting the Department of Justice to conduct further investigations, but it all finally led to an actual lawsuit.
An official announcement from the Department of Justice confirmed that it is filing a lawsuit against Apple on antitrust grounds. the United States vs. Apple The lawsuit addresses multiple issues with how Apple conducts its business.
“Apple is exercising its monopoly power to extract more money from consumers, developers, content creators, artists, publishers, small businesses, merchants, and others,” the Justice Department said in a statement about the lawsuit.
“For years, Apple has responded to competitive threats by imposing a series of ‘Whack-A-Mole’ contractual rules and restrictions that have allowed Apple to extract higher prices from consumers, charge higher fees to developers and creators, and stifle competitive alternatives from consumers,” said Jonathan Kanter. , Head of the Antitrust Division of the Department of Justice also: “Competitive Technologies.”
The Justice Department says Apple violated Title II of the Sherman Antitrust Act in five ways.
- App Store restrictions have been applied to “super apps,” thus limiting the growth of third-party apps
- Cloud streaming services are limited to Apple, specifically game streaming services
- Except for cross-platform messaging apps, forcing people to keep buying iPhones to keep messaging
- Reduce the functionality of non-Apple smartwatches, by restricting access to software and hardware features
- Limit digital wallets and prevent the use of near-field communications with third parties
In a press conference about the event, US Attorney General Merrick Garland complained about 30% App Store fees, degraded experience in third-party extensions, and heavy reliance on messaging as part of the lawsuit. Based on the statement, it's not clear whether the US is aware that RCS is coming to the Messages app, understands the limitations of the SMS standard that the Messages app uses to connect to non-iPhone devices, or knows the App Store's fee structure isn't the same. The full 30% is across the board – and it's free for younger developers.
The Department of Justice will be joined by 16 state attorneys general.
Apple responded almost immediately
Apple has already responded to the lawsuit in a statement AppleInsider And other places.
“At Apple, we innovate every day to make technology people love — designing products that work seamlessly together, protect people's privacy and security, and create a magical experience for our users. This lawsuit threatens our identity and the principles that set Apple products apart in highly competitive markets.
If it succeeds, it will 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, by enabling the government to take a strong hand in the design of human technology. “We believe this lawsuit is wrong on both the facts and the law, and we will defend it vigorously.”
Four years of looming lawsuits
If you've been watching this story, you'll know that the Justice Department has been promising some sort of antitrust action since 2019. Some sources suggested the lawsuit was on hold to see how Apple would respond to regulation in the EU to help shape the US case.
Competitors are unhappy with Apple's dominance of the iPhone
In 2019, Spotify alleged that Apple “gives itself unfair advantages at every turn” regarding its App Store and Apple Music commissions. The company also argued that Siri was too closed-minded and automatically led customers to Apple Music.
Many of Spotify's complaints have since been addressed, though Spotify has done little to actually benefit from Apple's adjustments. The company can now send emails to customers, add a link for a paid subscription, direct Siri to default to Spotify, and more.
Investigations conducted in early 2020 targeted Apple's 30% commission for in-app purchases and subscriptions. Apple also addressed this angle in November 2020 when it announced new guidelines allowing a 15% commission for developers who earn less than $1 million per year or retain subscribers for more than one year.
Epic has argued that Apple will selectively enforce its App Store rules in 2021, drawing the attention of the Justice Department. She pointed to Roblox and its ecosystem of experiences and monetization via Robux.
In 2022, Thiel argued that Apple's AirTag and Find My ecosystem violated antitrust. Apple allows manufacturers like Tile to participate in the Find My ecosystem, but these companies do not have access to user location data.
Now, it's up to the courts to decide whether Apple violated antitrust law and what to do about it. This process will take years.
USA vs. Apple by Mike Worthley On Scribd
