Apple plans to fight an antitrust lawsuit from the Department of Justice (DOJ) announced Thursday. The case accuses the iPhone maker of monopolizing its own mobile gateway.
Apple deemed the lawsuit misguided and warned that the DOJ risked ruining everything customers value about a unified mobile ecosystem.
The lawsuit threatens to undo features that Apple says set its smartphones apart from the rest of the market. If the lawsuit is successful, there’s also the risk that iPhones will end up looking and feeling like Android phones. So he even took a successful trolling swipe to defend Google.
In a statement provided to TechCrunch, Apple said:
This lawsuit threatens who we are and what sets Apple products apart in a fiercely competitive marketplace. If successful, it would hinder Apple’s ability to create the kind of technology people expect from Apple at the intersection of hardware, software, and services. This would also set a dangerous precedent for empowering governments to play a large role in designing people’s technologies. We believe that this lawsuit is wrong from a factual and legal perspective, and we will respond strongly to it.
The lawsuit filed by the Department of Justice (DOJ) and 16 state attorneys general accuses the iPhone maker of alleged anticompetitive exclusion from two markets the lawsuit seeks to establish: so-called “high-performance smartphones” and “American smartphones.” The market definition is narrower than the smartphone market as a whole. According to the lawsuit, Apple holds more than 70% of the ‘high-performance smartphone’ market and more than 65% of the U.S. smartphone market.
In a briefing with reporters following the DOJ’s announcement this morning, Apple dismissed this market definition as gerrymandering by government lawyers who argued there was no monopoly case.
They say that the iPhone’s approximately 20% global smartphone market share is the only market definition.
In extensive comments, Apple criticized the DOJ’s case as legally questionable or flawed. This suggests that this is an attempt by the government to replicate the successful antitrust case it brought against Microsoft’s Windows OS in the 1990s in a desperate attempt to put Apple in the same frame.
An Apple spokesperson, for example, rejects the comparison, pointing out that Microsoft has a 95% market share. They also argue that it ignores how Apple has created a whole new market for developers and consumers.
On the call, an Apple representative attempted to back up this claim by offering some growth metrics. For example, it said that over the past 10 years, the number of paid developers on the App Store has increased by 374% (from 1.1 million to 1 million). 5.2 million).
It also attempted to highlight the growth of developer-generated commerce on the App Store, citing statistics from 2020 to 2022. Globally, this is said to have increased by 64%, from $685 billion to $1.1 trillion. It’s worth noting that the period Apple has chosen to highlight here is that of the COVID-19 pandemic, as lockdowns have led to a surge in digital commerce across all kinds of services. And they often returned to Earth in shock after pandemic restrictions were lifted.
While Apple is trying to mislead the government, it is directly blaming the small number of commercial interests that fueled the lawsuit. That points to the Coalition for App Fairness, a lobbying group whose members include Epic Games, Spotify, Match Group and Basecamp, which accuses app developers of trying to use vague competition complaints to get a free ride on their platforms. , and seeks to enforce unrestricted access to consumers.
The coalition responded to today’s lawsuit with an aggressive statement of its own. In other words, it welcomes, as the DOJ puts it, “a strong stance against Apple’s stranglehold on the mobile app ecosystem.”
Apple counters that the App Store rules are designed to protect consumers’ interests by ensuring high service quality and privacy and security standards. They also argue that Apple has no legal requirement to design its technology in a way that would be better for its competitors.
Apple’s broader claim is that the lawsuit targets consumer value experiences that increase loyalty and make people prefer iPhones over Android smartphones in the first place. This suggests that the DOJ’s case was not fully considered. Differentiating (and valuable) features of the mobile ecosystem will result in less consumer choice as a result of successful governments.
Apple representatives even floated the idea of having judges rather than Apple engineers design the iOS user experience.
But they are also aggressively briefing that the Justice Department’s case will fail. Company representatives referenced some of several previous rulings, such as the Epic Games v Apple case. And the AliveCor lawsuit suggests that U.S. courts have upheld the company’s right to design and operate its platform. And while Apple hasn’t always gotten its way in these legal disputes, it’s true that in the 2021 ruling, the judge did not find Apple to be a monopoly.
In today’s briefing, Apple argued that the DOJ’s case has changed several times (at least six times) in the four years it has been formalized.
An Apple spokesperson did not provide specific details about the previous DOJ theory, but argued that a lack of evidence prevented the government from advancing the theory. So Apple is trying to build the suit into a mishmash of bits and pieces that don’t really fit together.
During the call, Apple representatives also offered some rebuttals to certain allegations. do Now allows cross-platform “super apps”. They also suggested that they plan to implement RCS for messaging. However, company representatives suggested that it will take time because they want to integrate the technology in a way that doesn’t reduce the privacy and security of iOS users.
In its defense, Apple claims that it has continued to increase access to iOS over the years. Company representatives said the iPhone is open to millions of third-party apps and hundreds of third-party accessories.
For more information on Apple’s antitrust lawsuit, see here.
