Today, the United States Department of Justice (DOJ) has filed its antitrust case against Apple as expected. The DOJ is accusing Apple of maintaining an illegal monopoly on the iPhone preventing developers and rivals from fairly competing in the smartphone market (via The Washington Post).
The antitrust case, filed in the US District Court for the District of New Jersey, alleges that Apple’s rules and restrictions on the iPhone platform have stifled competitors and developers from fairly competing with the Cupertino company. Apple uses its influence over its products to “extract higher fees, thwart innovation, offer a less secure or degraded user experience, and throttle competitive alternatives,” the suit alleges.
The antitrust case claims some examples of how Apple is stifling iPhone competition. For example, Apple is accused of making it harder to switch from the iPhone to other mobile platforms by preventing apps that endanger “iOS stickiness.” The company is also accused of artificially limiting cloud streaming services from third-party providers on the iPhone, as well as imposing restrictions on “alternative messaging apps” by artificially limiting cross-compatibility of texting between iPhone and Android.
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.
DOJ antitrust chief Jonathan Kanter
The antitrust case is filed by the DOJ alongside 16 states and district attorneys general. Apple is accused of imposing developers with unfair contractual obligations that make it difficult to create apps and services that directly compete with the Cupertino company’s offerings. Apple’s monopoly power allows the company to charge steep fees and prices from all stakeholders in its platforms, including “consumers, developers, content creators, artists, publishers, small businesses, and merchants.”
The DOJ has provided several examples of how Apple is allegedly abusing its monopoly to maintain an illegal advantage over its rivals across different sectors. For example, cloud gaming streaming apps that were not allowed on the App Store allegedly force users to pay for more expensive hardware to access their games locally instead. The DOJ is also probing how Apple could be limiting third-party smartwatches from fully operating with the iPhone, and whether Apple’s “walled garden” could be preventing users from moving away from the iPhone over the incompatibility of the Apple Watch with other smartphone platforms.
The DOJ appears to have taken some inspiration from the European Union as it is also investigating how Apple is preventing third-party developers in the US from creating contactless payment solutions on the iPhone as Apple Pay alternatives. Nevertheless, the antitrust case further alleges that Apple’s practices have also harmed competition in other sectors like web browsers, social media, entertainment, advertising, video communication, and more.
The results of this antitrust case and trial could have significant ramifications for the iPhone and Apple as a whole. The company could be forced to drastically alter some aspects of its platforms in the US similarly to what it did in Europe with the iOS 17.4 update. It’s unlikely that Apple could be subject to a monetary fine stemming from this antitrust case, but it could be years before the full effects of this trial and subsequent implications take place.
