US DOJ attacks nearly every aspect of Apple's business in massive antitrust suit

AppleInsider

After years of complaints by competitors, and an equally-long investigation, the long-rumored antitrust suit against Apple has finally been filed by the US Department of Justice -- and it is going after nearly every part of the company.

Apple has been sued by the DOJ

There have been threats of a lawsuit from the United States Department of Justice since a 2019 case with Spotify opened antitrust investigations into Apple. Multiple complaints have arisen since, pushing the DOJ to probe more, but all of this has finally led to an actual lawsuit.

An official announcement from the Department of Justice confirmed that it is suing Apple on antitrust grounds. The United States versus Apple lawsuit addresses multiple problems concerning how Apple runs its business.

"Apple exercises its monopoly power to extract more money from consumers, developers, content creators, artists, publishers, small businesses, and merchants, among others," the DOJ said in a release about the suit.

"For years, Apple 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, impose higher fees on developers and creators, and to throttle competitive alternatives from rival technologies," the DOJ antitrust division chief Jonathan Kanter also said.

The Department of Justice says that Apple has violated section two of the Sherman antitrust act, in five ways.

• Restrictions on the App Store applied to "super apps," and in doing so, limiting the growth of apps for third parties


• Cloud streaming services are limited by Apple, specifically game-streaming services


• Excluding cross-platform messaging apps, forcing people to continue to buy iPhones to maintain messaging


• Diminishing the functionality of non-Apple smartwatches, by limiting access to software and hardware features


• Limiting digital wallets, and preventing use of the near-field communications to third-parties

In a press conference about the event, US Attorney General Merrick Garland complained about 30% fees on the App Store, degraded experience for third-party accessories, and leans heavily on Messages as part of the suit. Based on the statement, it's not clear if the US understands that RCS is coming to Messages, comprehends the limitations of the SMS standard that Messages utilizes to connect with devices that are not iPhones, or knows that the fee structure on the App Store is not a full 30% across the board -- and is free for small developers.

The Department of Justice is joined by 16 state Attorneys General.

Apple responded nearly immediately

Apple has already responded to the suit in a statement to AppleInsider and other venues.

"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 who we are and the principles that set Apple products apart in fiercely competitive markets.

If successful, it would 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, empowering government to take a heavy hand in designing people's technology. We believe this lawsuit is wrong on the facts and the law, and we will vigorously defend against it."

Four years of imminent lawsuits

If you've been watching this story, you'll know that the DOJ has been promising some kind of antitrust action since 2019. Some sources suggested that the lawsuit was on hold to see how Apple would respond to regulation in the EU to help shape the US case.

Competitors aren't happy with Apple's iPhone dominance

In 2019, Spotify alleged that Apple "gives themselves unfair advantages at every turn" regarding App Store commissions and Apple Music. The company also argued that Siri was too closed down and automatically drove customers to Apple Music.

Many of the complaints made by Spotify have since been addressed, though Spotify hasn't done much to actually take advantage of Apple's adjustments. The company can now send emails to customers, add a link to get a paid subscription, direct Siri to default to Spotify, and more.

Investigations made in early 2020 targeted Apple's 30% commission for in-app purchases and subscriptions. That angle, too, was addressed by Apple in November 2020 when it announced new guidelines enabling a 15% commission for developers earning less than $1 million per year or holding on to subscribers for more than one year.

Epic argued that Apple selectively enforces its App Store rules in 2021, bringing DOJ attention. It pointed out Roblox and its in-game ecosystem of experiences and monetization via Robux.

In 2022, Tile argued that Apple's AirTag and Find My ecosystem violate antitrust. Apple allows manufacturers like Tile to take part in the Find My ecosystem, but those companies don't get access to user location data.

Now, it is up to the courts to decide if Apple has violated antitrust law and what will be done about it. This process will take years.

United States of America vs Apple by Mike Wuerthele on Scribd

Read on AppleInsider

MacPro

So, after so many years of being called a walled garden (and derided by the then more popular Android crap users), many here voluntarily joined that garden experience.  Then, jealous others sue to get access to the garden.  Now, it's a monopoly.  Just wonderful!

iSRS

AppleInsider said:

In 2022, Tile argued that Apple's AirTag and Find My ecosystem violate antitrust. Apple allows manufacturers like Tile to take part in the Find My ecosystem, but those companies don't get access to user location data.

Ok, so other vendors can do everything the AirTags can, where is the problem? That a third party can’t spy on us?

dtownwarrior

Not voting for either idiot for president this year!!!

Amazon is more of a Monopoly threat, then Apple or Google.  How many mom and Pop shops have been closed because of Walmart and Amazon and other big box stores. buying products from Apple or Google or 7-Eleven is a consumers choice.

AllM

Corrupt bureaucrats taking their cues from their foreign counterparts. Bought off in bulk. 

chris_kalan

Uhhh, didn't Apple address basically all of these in the last few months?

Restrictions on the App Store applied to "super apps," and in doing so, limiting the growth of apps for third parties
- this is the only one I could see them still needing to do some additional work on

Cloud streaming services are limited by Apple, specifically game-streaming services

- they began allowing these apps, including things like Xbox GamePass / Cloud Streaming earlier this year

Excluding cross-platform messaging apps, forcing people to continue to buy iPhones to maintain messaging
- unless they're talking about specific apps not being allowed because they're trying to forego iMessage TOCs, there are plenty of apps available: WhatsApp, Telegram, every social media app under the sun, etc.

Diminishing the functionality of non-Apple smartwatches, by limiting access to software and hardware features
- not sure what this is referring to at all

Limiting digital wallets, and preventing use of the near-field communications to third-parties
- These were opened widely with Tap to Pay on iPhone

AppleUfmyI

Monopoly means there are no alternatives.   I see plenty of other devices in the market for consumers to choose from.  

AppleZulu

If the five bullet-points in this article are really the focus of the DOJ suit, this is not as bad as the headlines blowing up my notifications make it out to be. If that holds up, I predict this will be settled out of court.

pslice

I realize the DOJ is an independent entity from the political parties, but there are two tech political parties, Apple and the “others”. I think the “others” are in charge of this legal action and it’s driven by their jealousy of Apple’s ecosystem. These “others” need to get over themselves. As a long time Apple consumer, I am really tired of these frivolous lawsuits. Don’t like Apple, don’t buy Apple.

blastdoor

https://legal.thomsonreuters.com/blog/antitrust-law-basics-section-2-of-the-sherman-act/#:~:text=Market%20share%20in%20the%20relevant,is%20likely%20considered%20a%20monopolist.

At least according to this link, market share above 70 percent is generally considered a monopoly. Below 50 percent, not. In between is a grey zone.

Apple’s share of the us smartphone market might be in the grey zone, depending on how exactly one defines market share. 

So this case seems like a stretch by DOJ, but it’s not inconceivable that they could win some part of it.

if Apple wanted to get out of the grey zone they could just drop the SE or similar. 

foregoneconclusion

Game streaming is a head scratcher. Mobile support is a minor part of those services to begin with due to the games being offered not really a good experience on phones anyway. It’s all stuff that was designed for bigger screens.

Example: NBA2K appears on Apple Arcade but it was originally designed for consoles connected to a TV…so iPad is the smallest screen that I find playable. I definitely prefer it on my Mac or ATV.

Microsoft yelling/screaming about getting on iOS is mostly a joke. The games are only technically playable on iPhone screens. They’re not really enjoyable at that size because they weren’t designed for mobile screens.

charlesn

pslice said:

I realize the DOJ is an independent entity from the political parties,

I hope this was sarcasm. Nothing could be less true in reality. 

libertymatters

Apple threw in its lot with the ruling class in 2017.  It abandoned its traditional liberal values that Jobs talked about in favor of state censorship.  Now that same ruling class is trying to exact an even greater pound of flesh from Apple.  Evil always eats its own.

Having said all that, they opened themselves up to this by their heavy handed approach to the iPhone in favor of their own control and profits at the expense of their customers.  The locked down iPhone is awful for consumers. The commenters on this site love for Apple blinds them to their own self-interest.  It is in your interest not to be beholden to Apple for what apps are allowed on your phone.  Period.  It is a small form of tyranny.  It is a shame it will take state power to force them to do the right thing, but there it is.

mikethemartian

Apple should just make a version of iMessage for Android and PC and just charge a monthly subscription for it.

charlesn

If you're as pissed off about this mindless and wildly expensive lawsuit as you should be--the DOJ will spend tens if not hundreds of millions in taxpayer dollars to try and force an Android-style open ecosystem down your throat and thereby lessen consumer choice--then don't just rant into the void here. At least email Merrick Garland here: https://www.justice.gov/doj/webform/your-message-department-justice  And if your state is on the list of those that have joined the suit, copy and paste that same email to your state's AG, and let your Congressional and Senate representatives know, too. 

mikethemartian

dtownwarrior said:

Not voting for either idiot for president this year!!!

Amazon is more of a Monopoly threat, then Apple or Google.  How many mom and Pop shops have been closed because of Walmart and Amazon and other big box stores. buying products from Apple or Google or 7-Eleven is a consumers choice.

Amazon is already being sued under antitrust law by the FTC.

AllM

charlesn said:

If you're as pissed off about this mindless and wildly expensive lawsuit as you should be--the DOJ will spend tens if not hundreds of millions in taxpayer dollars to try and force an Android-style open ecosystem down your throat and thereby lessen consumer choice--then don't just rant into the void here. At least email Merrick Garland here: https://www.justice.gov/doj/webform/your-message-department-justice  And if your state is on the list of those that have joined the suit, copy and paste that same email to your state's AG, and let your Congressional and Senate representatives know, too. 

You think those paper-pushers are going to listen? They’re probably busy buying yet another Ferrari for their jet-set kids. 

MisterKit

I guess if Apple wouldn't give the government a back door the government will try to take Apple down. It will be interesting to watch this game play out.

ericthehalfbee

"For years, Apple 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, impose higher fees on developers and creators, and to throttle competitive alternatives from rival technologies," the DOJ antitrust division chief Jonathan Kanter also said.

Considering Apple has reduced fees over the years (15% small devs, 15% recurring subs, 0% for subs outside The App Store like Spotify or Netflix) I’m not sure how this idiot can make the claim Apple is imposing higher fees. Fees were their highest in 2008 when everyone paid a flat rate of 30%. Apple has also relaxed or eliminated many other rules over the years. He’s going to have a touch time proving any of this.

Jonathan Kanter is biased against big tech and has faced criticism because of it. Filing a lawsuit against Apple based on feelings instead of facts is not going to turn out well.

In the US being a monopoly isn’t illegal (if the iPhone gets declared a monopoly). It’s only illegal if A) you did something illegal to get to your monopoly position or once you become a monopoly you start abusing your position.

Neither is true for Apple. They became large by selling superior products that people want, not by limiting competition or anything similar. Apple also can’t be accused of abusing their position as evidenced by their lowering of fees and relaxing rules over many years. That’s the opposite of abuse of monopoly position.

DOJ is going to look like fools trying to claim Apple abused their position when lawyers start to list off alt he things Apple has done (like reducing fees). 

AllM

libertymatters said:

Apple threw in its lot with the ruling class in 2017.  It abandoned its traditional liberal values that Jobs talked about in favor of state censorship.  Now that same ruling class is trying to exact an even greater pound of flesh from Apple.  Evil always eats its own.

Having said all that, they opened themselves up to this by their heavy handed approach to the iPhone in favor of their own control and profits at the expense of their customers.  The locked down iPhone is awful for consumers. The commenters on this site love for Apple blinds them to their own self-interest.  It is in your interest not to be beholden to Apple for what apps are allowed on your phone.  Period.  It is a small form of tyranny.  It is a shame it will take state power to force them to do the right thing, but there it is.

Problem is, between corrupt bureaucrats knowing jack about tech, crapware makers seeking to install some useless ad-ridden appsy on your phone, and Apple, the latter is obviously the lesser evil. 

globby

charlesn said:

pslice said:

I realize the DOJ is an independent entity from the political parties,

I hope this was sarcasm. Nothing could be less true in reality. 

Yeah, I'm told a huge donation to the DNC in time for the next election would make this problem magically vanish ...