Federal Authorities Declare Apple a Prohibited Monopoly Within the United States

Federal Authorities Declare Apple a Prohibited Monopoly Within the United States

The European Union has targeted Apple over the past few years for monopolistic and anti-competitive practices, forcing the company to allow alternate app stores and other features in the EU. Now, the United States government is suing Apple on similar grounds.

The United States Department of Justice (DoJ), along with 16 state and district attorneys general, is suing Apple over alleged anticompetitive practices. The complaint explains, “Rather than respond to competitive threats by offering lower smartphone prices to consumers or better monetization for developers, Apple would meet competitive threats by imposing a series of shapeshifting rules and restrictions in its App Store guidelines and developer agreements that would allow Apple to extract higher fees, thwart innovation, offer a less secure or degraded user experience, and throttle competitive alternatives.”

There are five core complaints in the lawsuit. First, Apple is accused of blocking “super apps,” which are defined as apps that are collections of smaller apps and games. The DoJ didn’t name specific examples here, but presumably this is about apps like WeChat in China , which contain the features of dozens of separate apps and can be highly lucrative for companies. Second, Apple prevented cloud streaming games and apps from the App Store (which only changed in January ). Third, Apple makes third-party messaging apps worse than iMessage by blocking them from sending and receiving SMS messages in the same way. Fourth, Apple limits the functionality of smartwatches connected to an iPhone compared to the features available from an Apple Watch. Finally, Apple doesn’t allow people to use alternative digital wallets in place of Apple Wallet.

The issues described in the lawsuit are similar to the complaints raised by the European Union, which led to the group of 27 countries passing the Digital Markets Act in 2022. That forced Apple, Microsoft, and other large tech companies to make some product integrations optional (e.g. Bing Search can now be turned off in Windows 11 in the EU). Apple had to add support for alternative app marketplaces , third-party web browser engines, and other features. Those changes went live in the iOS 17.4 update , but only for countries in the EU.

The lawsuit accuses Apple of violating the Sherman Act , a law passed in 1890 that prohibits anticompetitive agreements and practices that attempt to monopolize commercial markets. The law was used in 1911 to break up Standard Oil into 43 smaller companies, which include the direct descendants of ExxonMobil and Chevron. It was also used to break up the AT&T Bell System in 1982, though most of them merged back together over the decades to become AT&T and Verizon. Apple is also accused of violating the New Jersey Antitrust Act and state laws of Wisconsin.

It’s not clear yet if the lawsuit will result in action against Apple, but it is a significant move from the United States government. The lawsuit doesn’t specifically mention a breakup of Apple as a possible solution, but it does want Apple to stop the alleged anticompetitive practices.

Source: CourtListener (PDF) , The Verge

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