US DOJ and 16 States Sue Apple for Violating Antitrust Laws, Establishing Monopoly

[Qs Laptop]

The US has filed a landmark lawsuit against Apple which accuses the tech giant of monopolising the smartphone market and crushing competition.

In the lawsuit, the justice department alleges the company used its control of the iPhone to illegally limit competitors and consumer options.
The complaint accuses it of squashing the growth of new apps and reducing the appeal of rival products.

https://www.bbc.com/news/world-us-canada-68628989

By tightly controlling the user experience on iPhones and other devices, Apple has created what critics call an uneven playing field, where it grants its own products and services access to core features that it denies rivals. Over the years, it has limited finance companies’ access to the phone’s payment chip and Bluetooth trackers from tapping into its location-service feature. It’s also easier for users to connect Apple products, like smartwatches and laptops, to the iPhone than to those made by other manufacturers.

https://www.nytimes.com/2024/03/21/technology/apple-doj-lawsuit-antitrust.html

 

[Midpack]

They sued Microsoft years ago, and Google more recently, so no idea what to expect WRT Apple. It will probably be years before we know anything if ever? Not sure how a 25% iPhone market share is a monopoly though. And Android has a much larger market share than Apple globally, though not in the US.

https://www.statista.com/statistics/216459/global-market-share-of-apple-iphone/

 

[Eucerin]

So many negative news to Apple lately, from apple watch to china apple phone ban, and just less than a month ago the announcement about the Apple EV team dissolved, and now this. I am glad I sold the stock in December last year

 

[MichaelB]

They sued Microsoft years ago, and Google more recently, so no idea what to expect WRT Apple. It will probably be years before we know anything if ever? Not sure how a 25% iPhone market share is a monopoly though. And Android has a much larger market share than Apple globally, though not in the US.

https://www.statista.com/statistics/216459/global-market-share-of-apple-iphone/

Microsoft years ago was definitely engaging in anticompetitive behavior. Google was sued because it gave some companies preferential access to its App platform. There was merit in both cases.

The charge against Apple is how the hw platform has been managed to deter or prevent competition. I do not know if there is merit in this charge, but the DoJ thinks there is. From the DoJ website https://www.justice.gov/opa/pr/justice-department-sues-apple-monopolizing-smartphone-markets

The complaint, filed in the U.S. District Court for the District of New Jersey, alleges that Apple illegally maintains a monopoly over smartphones by selectively imposing contractual restrictions on, and withholding critical access points from, developers. Apple undermines apps, products, and services that would otherwise make users less reliant on the iPhone, promote interoperability, and lower costs for consumers and developers. Apple exercises its monopoly power to extract more money from consumers, developers, content creators, artists, publishers, small businesses, and merchants, among others. Through this monopolization lawsuit, the Justice Department and state Attorneys General are seeking relief to restore competition to these vital markets on behalf of the American public.

 

[mpeirce]

It’s pretty simple, the justice department has been annoyed at Apple for years because they make it difficult for them to access secure data on iPhones.

Apple continues to improve their encryption technology (for example, they recently added an extra layer of encryption to Messages to foil quantum computing-based attacks, technology the government has been poring research money into). If you don’t play ball, they will go after you.

 

[Al18]

My prediction is Apple will need to reduce the 30% profit it collects from large App developers, but this will happen after years of litigation. Expect the stock to drop 10-15%. Apple will survive.

 

[Gumby]

It’s pretty simple, the justice department has been annoyed at Apple for years because they make it difficult for them to access secure data on iPhones.

Apple continues to improve their encryption technology (for example, they recently added an extra layer of encryption to Messages to foil quantum computing-based attacks, technology the government has been poring research money into). If you don’t play ball, they will go after you.

No, the US Justice Department and the state attorneys general believe that Apple violated the antitrust laws and believe that they can prove it in court. That's why they brought the suit. Your allegation is both baseless and insulting to the attorneys in all these offices.

 

[W2R]

The US has filed a landmark lawsuit against Apple which accuses the tech giant of monopolising the smartphone market and crushing competition.

Maybe for some customers, but not me. I love my android, it does everything I want it to do, and it didn't cost even a fraction of what an iPhone would have cost me.

Personally I stopped buying iPhones several years ago when my iPhone 5 died, and haven't regretted that decision for even a split second.

 

[frayne]

Apple Lawsuit

Looks like this is going to be a long drawn out affair. Just wonder how it is going to affect Apple stock going forward. I hope today isn't a harbinger of things to come.

 

[GenXguy]

Looks like this is going to be a long drawn out affair. Just wonder how it is going to affect Apple stock going forward. I hope today isn't a harbinger of things to come.

Here is a link to an article for details about it:

https://www.cnbc.com/2024/03/21/doj-sues-apple-over-iphone-monopoly.html

 

[Aerides]

threads merged

 

[CaptTom]

I have mixed feelings on this. On the one hand, as posted above, it's very true that "Apple exercises its monopoly power to extract more money from consumers, developers, content creators, artists, publishers, small businesses, and merchants, among others." Especially, IMHO, its customers. I'd never own an Apple product, simply because of their business model.

That said, I find a lot of these anti-trust suits frivolous. Like going after Microsoft for including a browser in their Windows OS. I always had, and used, other options. Ditto for the suits against Google.

No, the problem isn't these big companies. The problem is the consumers who tolerate this kind of behavior, and line up to buy over-priced phones every time there's a new model.

Why should I care if consumers want to BTD and make a fashion statement? I can assure you no-one has ever forced me to buy from Apple.

 

[Chuckanut]

No, the problem isn't these big companies. The problem is the consumers who tolerate this kind of behavior, and line up to buy over-priced phones every time there's a new model.

I must disagree. Most Apple phone users I know keep their phones for many years. They like Apple because Apple supports the older phones fairly well over time. Other than a minority of fan boys the long life of the product and its ongoing support is a reason to pay the Apple Tax.

Here’s a list of iPhones that run the current iOS. It’s about Six generations.

https://support.apple.com/guide/iphone/iphone-models-compatible-with-ios-17-iphe3fa5df43/ios

Support tends to run from six to eight years. And Apple still will offer security updates to the iOS of some even older phones.

 

[audreyh1]

I must disagree. Most Apple phone users I know keep their phones for many years. They like Apple because Apple supports the older phones fairly well over time. Other than a minority of fan boys the long life of the product and its ongoing support is a reason to pay the Apple Tax.

+1

Don’t get mad at a company because they refuse to build cheap products. The loyal customers over decades are not delusional.

 

[Midpack]

I have mixed feelings on this. On the one hand, as posted above, it's very true that "Apple exercises its monopoly power to extract more money from consumers, developers, content creators, artists, publishers, small businesses, and merchants, among others." Especially, IMHO, its customers. I'd never own an Apple product, simply because of their business model.

No, the problem isn't these big companies. The problem is the consumers who tolerate this kind of behavior, and line up to buy over-priced phones every time there's a new model. Simply false.

I must disagree. Most Apple phone users I know keep their phones for many years. They like Apple because Apple supports the older phones fairly well over time. Other than a minority of fan boys the long life of the product and its ongoing support is a reason to pay the Apple Tax.

+1. Like Google and others don’t try to wall in their customers.

After years in the WinPC world and one Android phone years ago, we are very happy in the Apple ecosystem. YMMV

 

[frayne]

At first glance it seems like Apple (shareholders as well) is being punished for making and selling superior products. At second glance the only winners in this case will be the attorneys.

 

[Qs Laptop]

Looks like this is going to be a long drawn out affair. Just wonder how it is going to affect Apple stock going forward. I hope today isn't a harbinger of things to come.

At first glance it seems like Apple (shareholders as well) is being punished for making and selling superior products. At second glance the only winners in this case will be the attorneys.

Apple stock has been fairly stagnant the past couple of years. It's projected to grow at about an 11% annual rate the next 5 years. This is after averaging about a 22% annual growth rate for the past 5 years. It looks like the years of Apple being a good growth stock is over, unless they have new products in the pipeline that will disrupt the market.

They've given up on developing an EV. They aren't developing their own AI, instead they are in talks with Google to use a version of their AI. I think their plans for a TV are toast. As a company that consistently innovates cutting edge products it appears their day is over.

I may end up eating these words in a couple of years, but I think the go-go years of really good growth is over.

 

[Gumby]

..... At second glance the only winners in this case will be the attorneys.

Again with the misinformation. The lawsuit is brought and prosecuted by attorneys in the Justice Department and in the state attorneys general offices. They are public employees making a regular salary to enforce the antitrust laws against any business that violates them. They are not driven by the prospect of financial gain from suing Apple. Indeed, any damages recovery goes to the customers who were harmed.

You may disagree with the premise of the lawsuit or think it should not succeed, but that doesn't give license to falsely malign the public servants prosecuting it.

 

[statsman]

We purchased our first Apple products last year with two iPhone 13s and an 11" iPad Pro. Great products, but I don't feel Apple is forcing us to use them or keep them. We had Android smartphones for the six years prior. My DW has had at least two active Kindles (Android) for quite some time. My main PC has always been Windows based since 3.1 (actually MS-DOS before that), and now our spare PC and my laptop are running on Linux Mint.

 

[ERD50]

They sued Microsoft years ago, and Google more recently, so no idea what to expect WRT Apple. It will probably be years before we know anything if ever? Not sure how a 25% iPhone market share is a monopoly though. And Android has a much larger market share than Apple globally, though not in the US.

https://www.statista.com/statistics/216459/global-market-share-of-apple-iphone/

A monopoly is not illegal. It's the using of that monopoly power to restrict trade that is illegal (and supposedly what this is about).

As MB explained:

Microsoft years ago was definitely engaging in anticompetitive behavior. Google was sued because it gave some companies preferential access to its App platform. There was merit in both cases.

The charge against Apple is how the hw platform has been managed to deter or prevent competition. I do not know if there is merit in this charge, but the DoJ thinks there is. From the DoJ website https://www.justice.gov/opa/pr/justice-department-sues-apple-monopolizing-smartphone-markets

I felt very strongly at the time that Microsoft was abusing its monopoly power. They provided free software to build websites, but instead of adhering to the published standard for websites, they used all sorts of proprietary 'tricks', and only Microsoft web browsers (Explorer at the time), with that proprietary code, could read those websites properly.

And since so many web sites were developed with those free tools, users were forced to use Microsoft Explorer and that was a real barrier for competing web browsers.

IMO, the government anti-trust action was to little too late, but it did help eventually (I think MS hubris was also part of their decline).

At first glance it seems like Apple (shareholders as well) is being punished for making and selling superior products. At second glance the only winners in this case will be the attorneys.

Again, no!

The case is about using their power to restrict competition. Every company is free to gain market share by making a superior product. They are not allowed to gain market share by breaking the knee caps of their competitor.

I guess you don't even need to be a monopoly to be charged with illegal market tactics - it's just easier and more likely to make happen with monopoly power.

-ERD50

 

[ERD50]

... Not sure how a 25% iPhone market share is a monopoly though. And Android has a much larger market share than Apple globally, though not in the US. ...

Well, this is a US case, and Apple iPhone, in the US is:

https://explodingtopics.com/blog/iphone-android-users

In the US, iPhone has a 57.93% market share.

-ERD50

 

[Qs Laptop]

We purchased our first Apple products last year with two iPhone 13s and an 11" iPad Pro. Great products, but I don't feel Apple is forcing us to use them or keep them.

No, they aren't. But Apple is making you use accessory products that are produced by them and there is not a significant amount of suppliers that make Apple compatible products because Apple does not license out their tech to third party vendors. You buy Apple products for your Apple phone. The. End.

Apple also deliberately makes their text messaging app work better with Apple phones only, and make communications with Android phones an inferior experience for Android phone users. For example, video clips sent from an Apple phone to an Android phone will be lower resolution, pixelated, and generally lousy viewing experience. Then there is the green bubble, blue bubble controversy.

We had Android smartphones for the six years prior. My DW has had at least two active Kindles (Android) for quite some time.

FWIW, Kindles don't run Android, they run on FireOS, an Amazon operating system.

 

[Aerides]

At first glance it seems like Apple (shareholders as well) is being punished for making and selling superior products. At second glance the only winners in this case will be the attorneys.

Maybe if they relied just on their superior products, this would not be needed.

But they didn't. If you have a teenager with an android, ask them about their angst with the green bubble.

Apple didn't HAVE to make it clear who has their phone and who doesn't, but they did. If you have ever been a teenager who had the store-brand sneakers, or the wrong jeans, and been bullied for that? Same thing, only worse, because it's by design.

 

[Qs Laptop]

Another problem area is if you get an Apple Watch, you better have an iPhone to pair it with. If you get a different brand smartwatch you won't be able to reply to a text message with your watch as easily as you can with an iPhone. Also, can't respond to calendar invites with an non Apple watch or easily interact with app alerts.

Another area with non Apple watches is that if you get a watch with cellular capabilities you will need to get another phone number to use it as a phone. If you have an iPhone you can use your iPhone's number.

 

[Chuckanut]

FWIW, Kindles don't run Android, they run on FireOS, an Amazon operating system.

FireOS is based on Android. Admittedly a highly modified version of Android. App support is iffy from what I have seen.

Fire OS is a mobile operating system based on the Android Open Source Project. It is developed by Amazon for their devices. Fire OS includes proprietary software, a customized user interface primarily centered on content consumption, and heavy ties to content available from Amazon's storefronts and services. Wikipedia