US DOJ Sues Apple for ‘Monopolizing Smartphone Markets’

The US Department of Justice has filed a lawsuit against Apple for "monopolizing smartphone markets" and harming consumers....
US DOJ Sues Apple for ‘Monopolizing Smartphone Markets’
Written by Matt Milano
  • The US Department of Justice has filed a lawsuit against Apple for “monopolizing smartphone markets” and harming consumers.

    Apple has faced growing scrutiny over its “walled garden” approach to the iPhone, forcing developers to use the App Store, taking a significant cut of their revenue, and making it difficult for customers to have other options. The EU has been working to crack open the company’s walled garden, and it appears the DOJ wants to do the same.

    The DOJ was joined by 16 states in filing the lawsuit and maintains that Apple uses its monopoly power to make users more reliant on the company and charge more from consumers and developers alike.

    “Consumers should not have to pay higher prices because companies violate the antitrust laws,” said Attorney General Merrick B. Garland. “We allege that Apple has maintained monopoly power in the smartphone market, not simply by staying ahead of the competition on the merits, but by violating federal antitrust law. If left unchallenged, Apple will only continue to strengthen its smartphone monopoly. The Justice Department will vigorously enforce antitrust laws that protect consumers from higher prices and fewer choices. That is the Justice Department’s legal obligation and what the American people expect and deserve.”

    “No matter how powerful, no matter how prominent, no matter how popular — no company is above the law,” said Deputy Attorney General Lisa Monaco. “Through today’s action, we reaffirm our unwavering commitment to that principle.”

    The DOJ says Apple uses its monopoly power to block “innovative super apps,” or apps that would make it easier for consumers to switch to other smartphone platforms. The company is also accused of blocking cloud-streaming apps and services it views as a threat, undermining cross-platform secure messaging, crippling the Apple Watch when used with non-iPhones, and limiting cross-platform digital wallet options.

    The inclusion of cross-platform messaging as one of the main points is interesting, especially in light of the Beeper Mini saga. iPhones have long defaulted to outdated, insecure SMS messages when texting Android phones, instead of using the newer, more full-featured, more secure RCS for cross-platform communication. Beeper Mini tried addressing the issue by providing a way for Android phones to use iMessage, only to engage in a frustrating game of whack-a-mole with Apple as the iPhone maker kept blocking Beeper. Ultimately, the smaller company gave up, prompting lawmakers to criticize Apple’s actions.

    At the same time, not everyone agrees with the lawsuit. The Organization Don’t Break What Works sent a statement to WPN criticizing the DOJ’s decision to sue Apple.

    “The Department of Justice, like the Federal Trade Commission, is oddly committed to bringing cases that seek to diminish some of America’s most innovative companies – harming powerful drivers of our economy, job creators, and providers of products and services that people love. Today, Apple is the most recent target despite a years-long investigation which now provides little evidence of wrongdoing,” said Chandler Smith Costello, a spokeswoman for the Don’t Break What Works campaign.

    “If successful, this lawsuit would curtail the privacy and security of Apple products and make it more difficult for them to work seamlessly with each other. It’s hard to see how this enforcement action is a win for consumers,” she continued.

    This case will decide the very nature of Apple’s business moving forward and will have profound repercussions for the tech industry at large.

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