The Department of Justice is considering a possible antitrust probe of Apple, according to three sources who spoke with Politico, the publication notes in a report published Wednesday.
Like the European Union, which recently launched an antitrust investigation of Apple, the DoJ is reportedly focused on Apple’s control of the App Store. Multiple companies have complained that the App Store raises prices and reduces options for customers.
“It’s one thing to structure your services in a restrictive way or use exclusive contracts when you’re small,” Gene Kimmelman, who worked in the DoJ’s antitrust division during the Barack Obama presidency. DOJ’s Antitrust Division during the Obama administration, told Politico. “But the bigger you become, the more dominant you become in a market, the more likely those types of restrictions — unless they are absolutely essential to benefit consumers — will be viewed skeptically as harmful to competition.”
“In-app purchase is broken,” Phillip Shoemaker, a former Apple executive told Politico. “As Apple is entering into more and more of these areas and putting out of business more developers, they really have got to think differently.”
App Store antitrust?
Former presidential candidate Elizabeth Warren previously said that Apple is one of several tech giants allegedly abusing their position in the market. Meanwhile, the Yale Law Journal recently published a paper titled “The Antitrust Case Against Apple.” While only a case study, it makes a compelling series of arguments that could be made against Apple. The main one is that Apple has “exploited its market power” through the Apple Store. This has allowed Apple to “impose a 30% tax and extract supracompetitive profits,” resulting in higher prices and reduced innovation.
Apple continues to blast developers who are looking to take from Apple without paying their share. Nonetheless, it has made some recent changes. For instance, devs will soon be able to better appeal App Store decisions. Apple also will not stop devs issuing bug fixes if apps break the App Store guidelines.
This is an incredibly complex issue that’s going to take a long time to unpick. Apple isn’t the market leader in any of its categories, from mobile to streaming TV to computer operating systems. Still, when you’re the world’s most valuable tech giant, it’s hard to argue you don’t have a whole lot of power!