The Department of Justice wants the public to know that the lawsuit against Apple is a serious matter. If not, why compare it to the government's lawsuit against Microsoft in the 1990s, which is the closest modern antitrust enforcement blockbuster? But the complaint, filed this month, doesn't seem all that shocking.
The Justice Department and 16 state attorneys general last week alleged that Apple illegally monopolizes the smartphone market by using its power to lock consumers into its products and increase profit margins. The question isn't just whether Apple makes a lot of money selling its phones. (It will be.) The question is whether it will be done through exclusive or predatory tactics. The Department of Justice says yes. Apple is responding to competitive threats not by making it “more attractive” for users to keep their iPhones, but by making it “difficult or more expensive” for users to get rid of their iPhones. is. The flaw in this logic is that Apple doesn't always choose between these options. Often we do both at the same time.
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The department's first step will be to prove that Apple has monopoly rights in the first place. On a sales basis, the company's share of the domestic smartphone market is approximately 70%. This seems paltry compared to his more than 90 percent share of the personal computer operating system market that Windows held around the beginning of this century. Still, it's substantive, so it's conceivable that the judge will move on to the next part of the case: how Apple has its monopoly. Here, the Justice Department highlights an area where it claims Apple has over-control: “super” apps that bundle many features into one package, similar to how users watch shows on Netflix. Things like cloud streaming apps that let you play games on your smartwatch, digital wallet, messaging, and more.
The idea is that Apple has cut off competition in each of these areas by keeping its ecosystem closed to outsiders. Apple imposes onerous rules related to super apps, all-in-one programs like Tencent's WeChay that combine messaging with shopping and other features. The Justice Department says this rule will inhibit the growth of super apps in the US, so Americans will have to be content with separate apps for each feature on the good old iPhone. Cloud streaming app rules don't work and prevent people from playing fancy games on low-end hardware, resulting in people using high-end Apple products with his chips that allow people to run games on their phones encouraged to purchase. The Apple Watch doesn't work with his Android device, and third-party watches don't work properly with his iPhone. The only way to tap and pay on your iPhone is Apple Pay, and Apple takes a big cut when you tap. iMessage users can only iMessage their girlfriends with iPhone users, while Android users' texts appear as disdainful green bubbles, with no read receipts or input indicators.
All of these things are still true, or were true until recently, when Apple made some changes, partially in response to pressure from European Union regulators. But the Justice Department must prove that Apple made these choices to stifle competition and disadvantage consumers. Prosecutors may have a chance if they can prove that the company's rules were arbitrarily or arbitrarily enforced to counter a clear competitive threat. But the rules that strictly control what is and isn't welcome on the iPhone don't usually seem arbitrary or targeted in the long story of the Apple empire. Even before Apple became the behemoth it is today, control has always been what made Apple, well, Apple. Tight integration of products and services makes every Apple device easier to use. The company also claims that it can ensure the reliability and security of these devices.
There are some more promising elements to the Justice Department's case. For example, it's not about how Apple designs its phones, but about how Apple limits the design choices of other companies. Forcing super apps to display mini-programs in a “flat text-only” list and prohibiting App Store developers from notifying users that they can get a cheaper subscription elsewhere . When it comes to cloud streaming, Apple's request to review every game on the streaming service instead of just reviewing the service goes too far, given that the essence of cloud streaming is that games aren't installed on the iPhone. It seems like. Apple may also have a hard time convincing a judge that it has made the process of messaging with Android users clunky to further its stated goals of privacy and security. These green bubble texts are not encrypted, but iMessages are.
Still, courts tend not to find that companies have an obligation to develop products that help competitors, and they generally do not conclude that products must be open by design. The country will need different laws to make the changes that many competition advocates seek.
