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The U.S. Department of Justice (DOJ) alongside 16 State/District Attorneys General has sued Apple today for violating federal antitrust laws (the famed Sherman Act of 1890).
The tech giant, one of the world’s most valuable companies and an astonishing story of succeeding from the brink of failure following Windows’ dominance of the early PC era, is accused of having “willfully monopolized the performance smartphone market in the United States through an exclusionary course of conduct and the anticompetitive acts.”
The DOJ was joined by the states of New Jersey, Arizona, California, Connecticut, Maine, Michigan, Minnesota, New Hampshire, New York, North Dakota, Oklahoma, Oregon, Tennessee, Vermont, Wisconsin, and the District of Columbia in its landmark lawsuit, which outlines five major technologies Apple has allegedly suppressed in order to establish its smartphone monopoly in its home country.
- Super Apps: By limiting the development of super apps, Apple allegedly prevents users from accessing broad functionalities within a single app, reducing the incentive to switch to non-Apple smartphones.
- Cloud Streaming Game Apps: Apple’s restrictions on cloud streaming apps are said to prevent users from playing high-compute games unless they are processed on expensive Apple hardware, reinforcing dependence on the iPhone.
- Messaging Apps: Apple allegedly degrades the quality and functionality of third-party messaging apps on the iPhone compared to its own messaging app, reinforcing barriers to switching from iPhone to other smartphones.
- Smartwatches and Digital Wallets: By restricting the functionality of third-party smartwatches and digital wallets on the iPhone, Apple allegedly denies users access to competitive products and further locks users into its ecosystem.
The DOJ will need to prove its case in court before it can force Apple to make any changes to its current business, but the lawsuit seeks to force Apple to allow consumers to install all of these alternative technologies on their iPhones, which would presumably allow them a much greater degree of customizability and personalization, as well as potentially lower prices from insurgent third-party challengers to the Apple App Store.
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Nonetheless, the DOJ is clearly acting in line with a growing tide of criticism and challenges to Apple’s famously tightly locked mobile operating system iOS and third-party App Store, from which it extracts a 30% cut on most in-app sales.
Gaming giant Epic has waged a longstanding court battle with Apple across several venues and countries over Apple’s refusal to allow Epic to collect money from consumers directly within its popular Fortnite mobile game for iOS, outside of the App Store’s fees. Epic recently won competitive relief in the EU in the form of a ruling that forces Apple and other tech providers to enable third-party app marketplaces on devices.
Read the full complaint below:
