For over a decade, it seemed like Apple could do no wrong. The iPhone has made it the most valuable company in the world. The App Store helped launch companies like Uber and Airbnb. The company’s new products have become important in healthcare, Hollywood and finance.
Now the difficulties are piling up. The Justice Department filed an antitrust lawsuit against Apple on Thursday, accusing the company of giving its products some advantages that rivals have lost. The lawsuit is the latest in a series of lawsuits filed against the company by regulators on four continents.
The challenge will test the resilience of the Apple brand and weaken its grip on the business, even though its products remain popular and continue to drive a highly profitable business. Last year, the company reported $386 billion in sales and $97 billion in profits.
Below we list the challenges you will need to face.
to. you. against apple
The Justice Department filed a sweeping antitrust lawsuit against Apple on Thursday, targeting the company’s most important business, the iPhone. In the 88-page lawsuit, the government alleges that Apple violated antitrust laws by preventing other companies from offering apps that compete with its own products, such as digital wallets.
The lawsuit was filed after a multi-year investigation that focused on the methods the company uses to control the user experience on the iPhone and other devices to create what critics call an uneven playing field. It gave its own products and services access to basic features like NFC chips and notification systems, but denied them to competitors like PayPal and Garmin smartwatches.
It may take months before the case goes to trial.
European Regulators for Apple
On March 4, the European Commission fined Apple 1.8 billion euros (about $1.955 billion) for hindering competition by preventing music streaming rivals from offering promotions and subscription upgrades to users. . Because Apple is the company that controls developers’ access to iPhone customers, European regulators said they wrote the App Store rules to allow Apple Music to offer benefits that rivals like Spotify cannot.
“From now on, Apple must allow music streaming platform developers to communicate freely with their users,” said Margrethe Vestager, senior vice president overseeing competition policy at the European Commission. He added that the fine amount “reflects both Apple’s financial power and the harm its actions have caused to millions of European users.”
After the fine was imposed, Apple delayed asking Spotify to notify users of the offer through its website, Spotify said. The European Commission said Apple could face additional fines if it does not comply with the order.
Korea and the Netherlands take on Apple
Apple could also face fines from regulators in the Netherlands and South Korea.
In 2021, Dutch regulators ruled that Apple violated competition laws in the dating app market by prohibiting services like Tinder from using payment systems other than those provided by Apple. Instead of allowing other payment systems to collect that money, Apple reduced its fees from the usual 30% to 27% of the price paid per user. But Dutch regulators declared the move did not comply with the law and fined the company 50 million euros ($53 million) last year.
Something similar is happening in South Korea, where lawmakers have responded to developers’ complaints about App Store fees by becoming the first in the world to pass a bill forcing Apple to allow alternative payment systems. The company relaxed the requirement to 26%. The country’s telecoms regulator said it could fine Apple $15.4 million for “unfair practices”.
Apple said it disagreed with the findings of Dutch and Korean regulators. He is appealing the Dutch fine and awaiting the results of the South Korean investigation.
Japan, Australia and the UK take on Apple
Other countries, including Japan, Australia and the United Kingdom, are exploring laws or regulations that could weaken Apple’s control. The regulatory changes they are discussing could force companies to offer alternative payment options and lower fees. After seeing how Apple complies with similar laws elsewhere, lawmakers can make the rules more stringent.
The rules would be the latest to split what was once a single app store into a hodgepodge of digital stores across borders.
china contra apple
Last fall, China began requiring public sector employees not to use iPhones at work. Authorities have not commented publicly, other than to note that there have been “media reports” about security flaws in the iPhone. However, this guideline had an impact on the domestic smartphone market.
iPhone sales in China fell 24% in the first six weeks of the year, according to Counterpoint Research, which monitors the smartphone industry. At the same time, sales at Huawei, once China’s largest smartphone maker, rose 64% following the launch of new phones with 5G wireless capabilities.
Epic Contra Apple
Apple scored a big win against Epic Games, the company that created Fortnite, after the video game company sued Apple over the App Store in 2020. But a federal judge dealt a blow to Apple’s control of the App Store, ruling that it violated California competition law by barring app makers from offering alternative ways to pay for services.
After the Supreme Court decided not to take up the case, Apple said it would follow the ruling, as it did in the Netherlands, which lowered fees to 27% for developers who use alternative payment options.
Last week, Epic filed a lawsuit in court challenging Apple’s compliance, arguing that the new fees and regulations overturn the judge’s order. Meta and Microsoft filed briefs in support of Epic, paving the way for the court to again rule on whether Apple violated California law.
Developers Against Apple
Before European regulators implemented new competition laws this month to give customers more choice, app makers complained that Apple’s response to the law flouted the rules. The company had planned to open up the iPhone to the App Store and alternative payment systems, but added those features along with new fees and requirements.
On March 18, developers met with Apple in Europe to ask how the fee complies with the law, which has several “free” provisions. Apple insisted its policies were consistent with the new regulations.
European regulators may launch a formal investigation into Apple’s plans. The process would begin a lengthy legal battle that could force Apple to make changes or fine up to 10% of its global annual revenue, which amounted to nearly $400 billion last year.
Wall Street and Apple
Apple investors are clamoring to enter the world of generative artificial intelligence. This technology, which can answer questions, generate images, and write code, has been hailed for its potential to create trillions of dollars in economic value.
But at a time when companies like Microsoft and Google are starting to build generative AI companies, Apple has yet to release any products. Apple CEO Tim Cook has assured investors that something will be revealed later this year. The company has begun negotiations with Google to integrate its Gemini artificial intelligence model into the iPhone.
Investors have driven Apple stock down more than 3.75% this year. At the same time, the Nasdaq Composite Stock Index, which is full of technology stocks, rose nearly 11%.
Trip Mickle He reports on Apple and Silicon Valley for the Times and lives in San Francisco. His interests at Apple include product launches, manufacturing issues, and political issues. He also writes about trends across the technology industry, including layoffs, generative AI, and self-driving taxis. More from Tripp Mickle