The US government attacks Apple for monopolistic practices on the iPhone

The American government took Apple to court on Thursday for monopolistic practices linked to the iPhone and the constraints set by the Californian group on application developers.

While Apple was most criticized in recent years for forcing third-party companies to go through its app store and pay hefty commissions on all transactions, this action focuses on other aspects of the ecosystem iPhone.

“All the decisions taken by Apple have established and strengthened the defenses protecting its monopoly in the field of smartphones,” argues the American government, which joined forces with prosecutors from fifteen states and that of the federal capital Washington to seize the federal civil court in New Jersey.

In doing so, Apple harmed “users, developers, and other parties who helped make iPhone what it is today,” the subpoena continues.

“If this situation is not called into question, Apple will continue to solidify its monopoly on smartphones,” predicted the Minister of Justice, Merrick Garland, during a press conference.

According to the Department of Justice, the Cupertino (California) group prevented or disrupted the creation and offering of services capable of being used on competing smartphones and easily switching from one to another.

He mentions “streaming” services on iPhone, but also digital wallets that can be used on several platforms.

Apple has also obstructed the development of messaging services that can be used across multiple media.

Merrick Garland pointed out that on Apple’s messaging system, iMessage, conversations with smartphones from other brands were not encrypted, unlike exchanges between two iPhones, and technical capabilities were limited.

Therefore, he explained, “iPhone users have the impression that competing smartphones are of lower quality […] while Apple is responsible for these degraded functionalities.

The government claimed to have relied on internal documents showing that the company had knowingly acted to exclude competition and innovations that would have threatened its economic model.

“Dangerous precedent”

The government is also accusing Apple of having voluntarily prevented the use of its connected watches with devices other than the iPhone, or of dissuading the creation of a “super app”, which would bring together several services on the same platform.

“Consumers should not have to pay higher prices because companies violate competition laws,” Garland said.

“This legal action threatens who we are and the principles that distinguish Apple products in a fiercely competitive market,” the company responded in a statement sent to AFP.

If the procedure resulted in a decision binding on Apple, “it would set a dangerous precedent, allowing the government to weigh heavily in the design of consumer technology,” the company said.

Apple has been accused for several years of imposing drastic conditions on companies that offer services on the iPhone and of preventing them in particular from creating their own application store to directly monetize their content.

The European Digital Markets Regulation (DMA), which came into force in mid-March, requires six of the largest technology companies, including Apple, to open their platforms to competition.

In response to this text, Apple said it would soon allow its users in the European Union to download applications directly via websites.

In September 2021, a federal judge in Oakland, seized by the video game publisher Epic Games, ordered Apple to no longer prevent third-party companies from using their own payment system.

The Apple brand proposed an alternative option authorizing these external purchases, but predicting that it would continue to charge a commission of 12 to 27% on each transaction, compared to 30% on the App Store, a formula denounced by many major players. digital players.

The action announced Thursday is a new example of the all-out offensive led by the Biden government against what it considers to be anti-competitive practices, in the technology sector but also beyond.

He is notably involved in a lawsuit against Google, accused of maintaining a monopoly on the search engine market.

After a first part which lasted several weeks at the end of 2023, the hearing must resume in the spring for the pleadings, with the decision expected by the end of the year.

On the New York Stock Exchange, Apple shares fell 3.46% around 12:30 p.m. EDT.

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