(Washington) The Justice Department and 16 state prosecutors filed an antitrust complaint against Apple on Thursday. It is an unprecedented challenge to the power of the Apple company, which has built a global empire by putting iPhones in the hands of more than a billion people.
The government alleges that Apple violated antitrust laws by preventing other companies from offering applications that compete with its own — such as its digital wallets — and that could diminish the value of the iPhone. Apple’s policies harm consumers and small businesses that compete with some of its services, argues the lawsuit filed in New Jersey federal court.
“At every stage, Apple’s conduct has allowed it to erect and strengthen the wall surrounding its monopoly,” accuses the government.
PHOTO JOSE LUIS MAGANA, ASSOCIATED PRESS
U.S. Attorney General Merrick Garland in Washington on Thursday
The lawsuit stems from a long-running investigation into Apple’s popular phones and services, which over time have given the company a market capitalization of nearly $2.75 trillion. It takes direct aim at the iPhone, Apple’s flagship product, and attacks how the company has used the billions of units sold since 2007 to make the device the centerpiece of its empire.
Tight control
By closely controlling the user experience on its iPhones and other devices, Apple has given itself an unfair advantage, critics say, granting only its products access to essential features that it denies to its rivals. Over the years, Apple has banned the iPhone’s payment chip from financial companies and blocked Bluetooth trackers from accessing its location feature. In addition, it is easier to connect Apple products (smart watches, laptops, etc.) to the iPhone than those of competitors.
Apple says this makes the iPhone more secure than other smartphones. But rival app designers and device makers accuse Apple of using its power to crush the competition.
“This lawsuit threatens our identity and the principles that distinguish Apple products in hypercompetitive markets,” responded a spokesperson. “If successful, it would harm 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, allowing the government to interfere in the design of people’s technology. »
Apple was able to fend off further antitrust attacks. During a lawsuit filed in 2020 by Epic Games, creator of Fortnite, regarding its App Store policies, Apple convinced the judge that customers could easily switch from the iPhone’s operating system to Google’s Android system. She presented data showing that loyalty to the iPhone explains why so few customers switch phone brands.
She also defended her business practices by saying that her approach has always been to grow the entire market, therefore “to create more opportunities, not only for [son] business, but also for artists, creators, entrepreneurs and all the “crazy” people who have a big idea.”
Other antitrust complaints
All the tech giants are now federally accused of anti-competitive practices. Two Justice Department lawsuits target Google (for its search engine and its control over advertising technology). The Federal Trade Commission accuses Facebook owner Meta of hindering competition by purchasing Instagram and WhatsApp. The FTC also accuses Amazon of abusing its power over online retail. The FTC also unsuccessfully tried to prevent Microsoft from acquiring video game publisher Activision Blizzard.
In Europe, regulators fined Apple €1.8 billion for blocking competing music streamers from communicating their offers and subscription upgrades to users.
App makers also called on the European Commission to investigate allegations that Apple is violating a new law forcing it to open iPhones to third-party apps.
In South Korea and the Netherlands, Apple faces fines for fees it charges app developers to use alternative payment processors. Other countries, including Britain, Australia and Japan, are considering rules that would reduce Apple’s stranglehold on the apps sector.
The US Department of Justice, which began its investigation into Apple in 2019, chose to build a broader and more ambitious case than previous lawsuits filed by other regulatory agencies. Rather than targeting only the App Store, as the Europeans did, it targets Apple’s entire ecosystem of products and services.
This article was originally published in the New York Times.
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