April 21, 2024
  • Apple is being sued by the DOJ for trying to stifle competition and maintain a monopoly over the smartphone market
  • The lawsuit was filed this morning and has already been joined by 16 other state attorneys

Apple Faces a Lawsuit by DOJ for Trying to Monopolize the Market

The US Department of Justice is suing Apple for trying to maintain a monopoly over the smartphone market. The lawsuit was filed on the morning of 21st March and has received the support of 16 other state attorneys.

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 violate the antitrust laws.Attorney General Merrick Garland

The DOJ said that Apple has been discouraging all innovations that can challenge its position in the market. And since it’s already a conglomerate with a lot of market capital, stifling smaller competitors is quite easy for them.

Let’s dive into the details of what this lawsuit says:

1. The lawsuit alleges that Apple discourages the development of streaming and super apps by manipulating its app review process since it believes such apps do not increase customers’ screen time on iPhones.

2. Users also find it difficult to connect their non-Apple smartwatches with Apple devices.

3. Apple also makes it challenging for banks to work with its tap-to-pay technology. By blocking entries by other players, it has earned billions in the form of processing fees.

4. For other apps on the App Store, Apple imposes stricter contracts and bends the rules in a way that the developers will have a hard time leaving the platform. Staying on the App Store is also not a good alternative as they’re subjected to higher fees, fewer resources, and an overall less secure platform that ultimately hurts user experience.

5. The lawsuit also accuses Apple of fueling ‘social stigma‘ around the use of Android devices. For instance, it displays messages sent through Android in green bubbles, establishing a clear demarcation from those sent from iPhones.

Apple also recently landed in a legal battle with Epic Games. The latter accused Apple of unlawfully taking 30% of every purchase made through the platform. The worst part is Apple prevents the apps from directly reaching out to the users with an alternative payment method.

The lawsuit also draws a parallel between Apple’s practices and Microsoft’s approach back in 1998 when the latter was accused of monopolizing the market.

At the time, it was Apple who accused Microsoft of not playing by the rules. However, according to the DOJ, Apple has become worse than what it fought against. The restrictions it imposes today on third-party apps are far more unfair than what Microsoft did.

What Does Apple Have to Say in Response?

Apple has denied all the accusations made against it in the lawsuit. Talking about the allegations of reducing iPhone’s standards, the company said that they are always trying to innovate so that their customers can have a smooth, secure, and magical experience.

This lawsuit is threatening what makes the company stand out in this competitive industry.

Apple also warned that:

  • If this lawsuit is successful, it would permanently alter the quality of technology that Apple is expected to put out, and that
  • It would give the government too much power over people’s design rights which might in turn stifle innovation

Apple has promised to go to trial if necessary and defend itself against the wrongful accusations.

We believe this lawsuit is wrong on the facts and the law, and we will vigorously defend against it.Apple

Apple in a Muddle Right Now?

Times are quite tough for Apple right now. It is already facing antitrust investigations from countries like Japan, Korea, and the EU. Plus, it was recently fined $2 billion for breaking competition rules – and iPhone sales in China have been blown out of the water by Huawei.

The new Digital Markets Act introduced in the EU last month did away with Apple’s long-standing practice of imposing a 30% commission on in-app purchases. It also forced Apple to allow developers to set up third-party app stores and offer other payment methods to the users.

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