The New Jersey Department of Justice’s Benchmark for the Apple “Phi-Apple” monopoly and the DoJ’s case against Google
Attorney General Garland said that consumers shouldn’t have to pay higher prices because companies are violating antitrust laws. “If left unchallenged, Apple will only continue to strengthen its smartphone monopoly.”
The case is being filed in the federal court in New Jersey. Attorneys general from New Jersey, Arizona, California, Connecticut, Maine, Michigan, Minnesota, New Hampshire, New York, North Dakota, Oklahoma, Oregon, Tennessee, Vermont, Wisconsin, and the District of Columbia joined the DOJ in the complaint.
US Attorney General Merrick Garland acknowledged the resource imbalance the government is up against, facing a company worth trillions of dollars. Garland said it was important to allocate resources to protect the American people when there was an institution with a lot of resources. It’s the case where Americans can’t protect themselves.
The EU might’ve led the way in forcing Apple to loosen its grip over the App Store, but the DOJ also sees a glaring problem with the fees that developers must pay — and the strict guidelines they must abide by — for their apps to remain available to millions of iPhone owners.
The government says that Apple has suppressed innovation in third-party digital wallet that allow users to tap-to-pay, and other streaming services for video games.
The Department of Justice went to trial against Google parent Alphabet last fall over allegations that it stomped out competing search engines. The FTC is working on a big suit against Amazon.
The DOJ Action Against Super Apps, the Case of the US Attorney General Garland, and the Apple Inclusive Selling of Game Services to Consumers
The lack of interoperable features in iMessage, as well as Apple’s exclusive software features, make mobile devices like the ones on the market seem inferior in the eyes of many consumers.
US Attorney General Garland spoke about Apple’s messaging strategy during the press conference. He said that the comments about rival smartphones being of lower quality are brought up by users of the iPhone.
The quote from Tim Cook at the Code Conference is contained in the complaint. Cook was told by an audience member that she could not send her mom certain videos. Cook said to buy your mom an iPad.
The DOJ lawsuit has a consumer-driven aspect to it. The Apple Watch offers easy setup, seamless compatibility, and deep integration with the iPhone and Apple’s ecosystem, whereas third-party watches are far more limited in the scope of features they’re able to offer. It’s fast and easy to respond to a text or email from Apple’s watch. Others? Less so.
“They definitely don’t go far enough to open up competition on the world’s largest gaming platform,” Microsoft Gaming CEO Phil Spencer recently told The Verge when addressing Apple’s plans to allow third-party app markets on the iPhone and make the App Store more “open” in the EU.
New rules for the App Store seemed designed to make it easier for cloud streaming services to be added to the store. But in reality, it wasn’t the way to go. The rules severely limited the presence of cloud gaming services on the App Store, as Apple required developers to submit their games to the App Store for approval individually — rather than having them exist in a singular hub of games.
However, the DOJ’s lawsuit claims that Apple doesn’t want users or companies in the US to benefit from super apps. It notes that during a board of directors presentation, Apple cited super apps as a “major headwind” to boosting iPhone sales in countries where they’re popular because of “[l]ow stickiness” and “[l]ow switching costs.” If someone benefits from using a super app, they don’t necessarily need to be tied to any one ecosystem — like Apple’s.
This setup is convenient for users and developers, the DOJ argues, as users don’t have to download a bunch of separate apps to gain access to different capabilities. Meanwhile, developers also don’t have to push separate app updates for Android and iOS, since these programs run within an app instead of on a phone itself.
“Apple recognizes that super apps with mini programs would threaten its monopoly,” the lawsuit states. Allowing super apps to be the main gateway where people play games, book a car, make payments, etc. would let the barbarians in at the gate.
Although the lawsuit mentions that Apple blocks mini apps from using the API they need to use Apple’s in-app purchase system, the company said it would start letting mini apps and games use its system in January. It’s unclear whether the change addresses the formatting arguments the DOJ makes in its lawsuits, as the App Store Guidelines only mention that mini apps should adhere to privacy rules, among other unrelated requirements.
Apple, Microsoft, and the DOJ are both concerned about the antitrust litigation under the Biden administration: a comment on Apple’s iPhone
Apple is worth $3 trillion and makes it one of the most valuable companies in the world. And its iPhone is one of the most popular phones on earth, dominating the global market, according to market analyst firm IDC. The Justice Department alleges it’s by no coincidence that Apple was able to ensure its place at the top.
The Federal Trade Commission has filed antitrust lawsuits against tech companies under the Biden administration.
When asked about the threat the new antitrust lawsuit might pose to Apple’s business, a DOJ official noted that “there are actually examples where companies, after having been charged and had to change business practices because they violated the antitrust laws in the long run, end up being more valuable than they were before.” Microsoft, due to its success in cloud services and artificial intelligence, is now the most valuable company in the world.
Microsoft was accused of forcing PC manufacturers and others to use its internet browser in an antitrust case in the late 1990s. It is widely credited with causing the company to be slow to embrace the web, falling behind a wave of startups including Google and Amazon that grew into giants by making web services useful and lucrative.
Apple believes that keeping its services closed makes it safer for customers. The complaint by the DOJ suggests that Apple doesn’t enforce these policies consistently, which would make sense if the goal was to protect users.