Thu. Jul 18th, 2024

The U.S. government filed an antitrust lawsuit against Apple on Thursday, accusing the company of using a series of practices to stifle competition and maintain its dominance in the smartphone market.

One key argument centers around messaging. The government claims Apple’s system discourages iPhone users from communicating with those on other platforms, like Android. This “walled garden” approach, symbolized by the green message bubbles for Android users, suggests iPhones are superior, hindering competition.

Similarly, Apple allegedly restricts the iPhone’s functionality with non-Apple smartwatches. Once users invest in an Apple Watch, switching to another phone becomes inconvenient, locking them into the Apple ecosystem.

The lawsuit further alleges Apple uses its control over the Near Field Communication (NFC) chip to monopolize digital wallets. While Apple allows banks and credit card companies to offer their services within Apple Wallet, they cannot access the NFC chip directly, preventing them from creating competing digital wallets.

The government also takes aim at Apple’s restrictions on game streaming apps and “super apps,” which combine multiple functionalities. These limitations, the argument goes, prevent the iPhone from becoming less hardware-reliant and hinder the development of innovative app experiences.

This case draws parallels to the historic lawsuit against Microsoft for tying its web browser to the Windows operating system. Legal expert Colin Kass suggests the strongest argument may be Apple’s potential use of contracts to prevent apps from working with competitors, essentially blocking the development of “super apps.”

However, Apple has previously defended its practices as essential for user privacy and security. They argued that controlling app distribution safeguards the iPhone from malware and fraud, ultimately benefiting customers.

The government will need to prove that Apple’s actions harm consumers. Assistant Attorney General Jonathan Kanter claims competition actually enhances privacy and security, potentially contradicting Apple’s earlier arguments.