It has long been expected that the US Department of Justice would file an antitrust lawsuit against Apple. But when the suit arrived Thursday, it came with surprising ferocity.
At a news conference, Attorney General Merrick Garland noted that Apple controlled more than 70 percent of the country’s smartphone market, and said the company used that outsized power to control developers and consumers and squeeze more revenue out of them.
The lawsuit and notices from the DOJ and 15 states and the District of Columbia joining it focus on Apple’s most prized asset – the iPhone – and position the case as a fight for the future of the technology. The lawsuit argues that Apple rose to its current power thanks in part to the 1998 antitrust case against Microsoft, and that another milestone in antitrust correction is needed for future innovation to continue.
Like the Microsoft case, the lawsuit against Apple is “very dynamic and forward-looking,” said John Newman, a law professor at the University of Miami. “It’s not necessarily about Apple seeing direct competitors,” he says. “It’s more about them trying to capture the territory that you would need if you were even trying to compete against Apple.”
Antitrust action in the tech industry has been a major focus of the Biden administration’s agenda, with lawsuits filed against both Amazon and Google by the DOJ and the Federal Trade Commission. “This case shows why we must reinvigorate competition policy and set clear rules of the road for Big Tech platforms,” Democratic Senator Amy Klobuchar told WIRED in a statement.
Rebecca Haw Allensworth, a law professor at Vanderbilt University, says that while the government almost always faces an uphill battle in antitrust cases, the Apple case appears relatively solid. “It’s a lot stronger than last year’s FTC Amazon monopolization lawsuit,” she says. “And yet it is very difficult to win antitrust cases.”
In a statement, Apple spokesman Fred Sainz said the lawsuit “threatens who we are and the principles that differentiate Apple products in fiercely competitive markets,” including the way the products work together “seamlessly” and “protect privacy and protect people’s safety.”
Apple has long argued that keeping its mobile operating system, app store and other services closed offers greater safety and safety for customers. But Newman says the DOJ complaint indicates that Apple is not consistently enforcing this policy, which would make sense if the goal was to protect users.
“Instead, Apple is focusing heavily on the types of app developers that pose the greatest competitive threat to Apple,” Newman said. The DOJ alleges that restrictions Apple places on iMessage, Apple Wallet, and other products and features create barriers that deter or even penalize people from switching to cheaper options.
History repeats itself
In the antitrust case against Microsoft in the late 1990s, the company was accused of illegally forcing PC manufacturers and others to favor the Internet Explorer web browser. This is widely believed to have made the company slow to embrace the Internet, falling behind a wave of startups, including Google and Amazon, that became giants by making Web services useful and lucrative.
When asked about the threat the new antitrust case could pose to Apple’s business, a DOJ official noted that “there are actually examples where companies, after being sued, have had to change their business practices because they have long-term had violated antitrust laws, ultimately become more valuable than before.” Thanks to its success in cloud services and more recently AI, Microsoft is now the most valuable company in the world.