The Department of Justice and 16 state attorneys general filed an blockbuster antitrust lawsuit Thursday aimed at forcing Apple to open up many aspects of its ecosystem, from the App Store to Apple Watch.
The 88-page civil suit, which accuses Apple of wielding monopoly-like power, could bring truly sweeping changes to iPhone, Mac and other Apple computers.
DoJ antitrust lawsuit targets much of the Apple ecosystem
With its antitrust lawsuit, the DOJ explicitly targets the iPhone, calling the device key to Apple’s dominance of a wide variety of industries. The suit accuses Apple of engaging in “anticompetitive and exclusionary conduct” and seeks to restore competition that would lower smartphone prices, reduce developer fees and preserve “innovation for the future.”
For Apple, it’s the latest — and biggest — threat to the very nature of the iPhone, a singular product that drives the company’s revenues and propelled the company to its lofty valuation.
Apple has already been pressured by the EU’s Digital Market Act to open up iOS to competition, resulting in sideloaded apps, alternative app stores and browser engines.
And now the Department of Justice weighed in on its side of the Atlantic, demanding changes that could prove even more profound.
“Apple undermines apps, products, and services that would otherwise make users less reliant on the iPhone,” said the DOJ in a press release Thursday. “Apple exercises its monopoly power to extract more money from consumers, developers, content creators, artists, publishers, small businesses, and merchants, among others.”
Click this Dropbox link to read the entire 88-page antitrust lawsuit against Apple.
DOJ calls out Apple Watch and ‘Super Apps’
The DOJ cited the lack of an Android app to synchronize with Apple Watch as an example of Cupertino’s anticompetitive behavior. Apple’s wearable racks up twice the sales of any rival. But without the necessary software, consumers can only use Apple Watch with an iPhone. And that might make Apple Watch owners less likely to switch to Android.
And it accused the iPhone-maker of stifling what it calls “Super Apps.” The Department of Justice said, “Apple has disrupted the growth of apps with broad functionality that would make it easier for consumers to switch between competing smartphone platforms.” It gave no examples of these, though.
Apple’s refusal to allow other payment systems access to the iPhone’s tap-to-pay system also came under fire, “inhibiting the creation of cross-platform third-party digital wallets,” according to the Justice Department.
In addition, regulators object to an Apple policy that blocked cloud-gaming services from the App Store. (That might explain why Apple reversed that rule in January.)
iMessage also came up, with the DOJ alleging, “Apple has made the quality of cross-platform messaging worse, less innovative, and less secure for users so that its customers have to keep buying iPhones.” (Apparently seeing the writing on the wall, Apple committed to improving cross-communication messaging between iPhone and Android later this year.)
DOJ antitrust lawsuit could be a game changer for Apple
The European Union’s Digital Markets Act brought huge changes to iPhone and iPad, but only in its member countries. That includes sideloading of iPhone applications and the option to completely replace Apple’s Safari with another web browser.
The DOJ antitrust lawsuit (.pdf) against Apple could bring a wrecking ball to the walled garden.
“This lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets,” an Apple spokeswoman told The New York Times. “If successful, it would hinder our ability to create the kind of technology people expect from Apple — where hardware, software, and services intersect. It would also set a dangerous precedent, empowering government to take a heavy hand in designing people’s technology.”
Result of a years-long investigation
The Justice Department has been looking into Apple and the App Store since at least 2020, beginning under the Trump administration. And Apple CEO Tim Cook testified when Congress held its own hearings about antitrust concerns in Big Tech in that same year.
The resulting lawsuit takes broad aim at Apple’s entire way of doing business.
“This case is about freeing smartphone markets from Apple’s anticompetitive and exclusionary conduct and restoring competition to lower smartphone prices for consumers, reducing fees for developers, and preserving innovation for the future,” the DOJ’s lawsuit says.
The U.S. states that jumped aboard the DOJ lawsuit are: Arizona, California, Connecticut, Maine, Michigan, Minnesota, New Hampshire, New Jersey, New York, North Dakota, Oklahoma, Oregon, Tennessee, Vermont, Wisconsin and the District of Columbia.
What’s next for DOJ’s Apple antitrust lawsuit?
The Justice Department’s lawsuit is seeking an unspecified financial penalty. It also wants the court to order Apple to open up Messages (which Apple “undermines” with blue bubbles on Android), allow cloud-streaming apps and alternative digital wallets with direct NFC access, and more, including:
- Allow cross-platform “super-apps” that perform a host of functions (presumably something like China’s WeChat or Elon Musk’s plans for X).
- Allow cloud-streaming apps for things like video games.
- Allow better messaging between iOS and competing platforms, especially Android.
- Expand Apple Watch connectivity to alternative platforms to enable easier platform switching.
- Allow third-party digital wallets with tap-to-pay.
However, Apple has tackled some of these issues already. In January, Apple opened up the App Store to allow streaming apps and services. And Apple has committed to adding Rich Communication Services (RCS) to iOS 18, which would make Messages operate better with Android.
It’s likely the lawsuit and appeals will stretch out for years. Microsoft’s famous antitrust case in the mid-’90s took more than eight years to wind through the courts.
Plus, Apple has already successfully fought off other antitrust suits.
In Epic Games’ 2020 lawsuit over App Store restrictions, Apple successfully argued that the App Store greatly benefitted users by protecting against malware and fraud. Apple also convinced the court that the App Store didn’t lock in consumers, who could easily switch between iPhone and Android.
The case isn’t a slam dunk: Apple has good defenses against the Justice Department’s allegations, plus a history of prevailing in court. But various antitrust lawsuits — especially the EU’s actions — are already changing the way Apple makes its products.
