DOJ sues Apple: iPhone Monopoly Claims

DOJ sues Apple

The United States Department of Justice, along with sixteen state attorneys general, has filed a lawsuit against Apple, accusing the tech giant of monopolistic practices in the smartphone industry. Attorney General Merrick Garland emphasized that consumers shouldn’t face higher prices due to antitrust violations and expressed concerns that Apple’s dominance in the smartphone market could continue to grow unchecked.

The lawsuit targets Apple’s ecosystem strategy, citing practices such as the use of blue and green bubbles in Messages to differentiate between iOS and Android users. It focuses on Apple’s control over the premium smartphone sector and alleges that the company imposes barriers that make it difficult for consumers to switch to competitors. This includes contractual restrictions and the strict vetting process for apps on the App Store.

Regulators highlight five areas where competition is suppressed: super apps, cloud streaming gaming apps, messaging apps, digital wallets, and smartwatch cross-platform compatibility. The complaint accuses Apple of using its App Store guidelines and developer agreements to stifle competition, rather than responding to competitive threats with lower prices or better developer monetization.

The lawsuit draws parallels to the DOJ’s antitrust case against Microsoft in the 1990s and accuses Apple of imposing stricter restrictions than Microsoft did at that time. It also mentions Apple’s ongoing legal battle with Epic Games regarding App Store policies.

Apple has countered these allegations by arguing that the lawsuit could hinder its ability to compete in the smartphone market. Despite announcing support for the RCS standard to improve cross-platform messaging compatibility, Apple has not committed to eliminating the green/blue bubble divide, which the lawsuit claims signals to users that Android devices are inferior.

Internal communications cited in the suit suggest that Apple is aware of the negative perception associated with green bubbles but has refrained from removing them due to potential impacts on its bottom line.

This lawsuit follows international regulatory scrutiny in markets like the European Union and signals the Biden administration’s commitment to addressing anticompetitive practices more aggressively. Attorneys general from various states, including New Jersey, California, New York, and others, have participated in filing the lawsuit.

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