United States accuses Apple of illegal smartphone monopoly ⚖️

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A huge blow for Apple on the other side of the Atlantic. After Europe, it’s now the USA’s turn to sue the company for illegal monopoly on smartphones.

Illegal practices that harm users

The U.S. Department of Justice and 16 U.S. Attorneys General have filed lawsuits against Apple. They allege that the tech giant is using illegal practices to drive up prices for consumers and developers, to the expense of users who are becoming more dependent on their phones. In addition, the company uses selective contractual practices, with restrictions, to prevent competition.

“Apple exercises its monopoly power to extract more money from consumers, developers, content creators, artists, publishers, small businesses, and merchants, among others,” the DOJ

The US government accuses Apple of employing several tactics to maintain its monopoly on the smartphone market. Among these strategies is to hinder the development of multifunctional applications, known as « super-apps », which could compete with the App Store. These applications, which are popular in other countries, bring together numerous services on a single platform. As such, they could encourage iPhone users to switch to competing platforms for greater convenience.

The company also blocks the implementation of video game streaming services, for example. By limiting access to this type of application, Apple reduces the attractiveness of iPhones in comparison with less expensive devices that can offer a richer gaming experience.

What’s more, Apple restricts the quality of messaging between iPhones and competing platforms such as Android. This practice creates a dependency on the Apple ecosystem. Indeed, users are encouraged to stay on the iPhone for optimal communication with friends and family.

The company also limits the compatibility of third-party smartwatches with its iPhones. This strategy discourages users from abandoning the Apple Watch for a competing model, as they risk losing important functionalities in the event of a platform change.

Finally, Apple prohibits third-party developers from creating digital wallets with tap-to-pay functionality for the iPhone. This practice reinforces Apple’s monopoly on the mobile payments market and limits consumer choice.

The anger of developers

This lawsuit for abuse of a dominant position was also prompted by the very people who made the iPhone such a success: the developers. For years, Apple’s iOS application developers have been complaining about the closed and often opaque nature of the platform. Among the most critical are those who offer paid subscription services. Apple demands a 15-30% commission on each subscription to be listed in the App Store. What’s more, Apple develops its own applications to compete with those available on its platform. Yet this is the only place where users can download applications, for security reasons, according to the company.

This situation fuels mistrust among developers, who doubt their chances of success in a skewed market. Such is the case with Spotify versus Apple Music. The streaming application filed a complaint with the European Commission for anti-competitive practices on the App Store. As a result, in early March, the European Commission fined Apple 1.84 billion euros (around $2 billion). The EU investigation revealed that Apple « prohibited developers of music streaming apps from fully informing iOS users about alternative and cheaper music subscription services available outside the app ».

Apple’s response to the accusations

Apple was quick to respond to the Justice Department’s accusations.

« 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. »

Naturally, the company, which is not involved in its first lawsuit of this kind, categorically denies all the accusations made against it. It will therefore have to defend itself before the American courts. These proceedings are reminiscent of those brought against Microsoft in the early 2000s. In their joint statement, one of the prosecutors pointed out that Apple had been one of the main beneficiaries of these lawsuits. The wheel is turning.

It’s likely to be several months, if not years, before these lawsuits reach their conclusion. And should the American justice system prevail, it could well shake up the smartphone market as we know it today.

Sources : The Verge, DOJ