Has Apple created an illegal monopoly? The question seems clear to the US Department of Justice and has therefore filed a comprehensive competition lawsuit against the tech company. Apple wants to defend itself against this.
It has been investigated for years, and now US government competition watchdogs are taking the tech giant Apple to court. The government accuses Apple of unfair competition. The iPhone creator denied competitors access to hardware and software features of its devices and preferred its own offerings, according to a lawsuit filed by the Justice Department and several states. The company used its control over the iPhone to “engage in widespread, persistent and illegal behavior.”
Apple wants to defend itself. The company emphasized that the lawsuit threatens principles that make Apple products outstanding in a highly competitive market. It is also a dangerous precedent in which the government wants to dictate how technology should be developed.
No space for services from other providers on iPhone etc.
The core of the allegations is that Apple has upgraded its own devices and thereby made other companies’ services artificially less attractive. Among other things, the lawsuit states that Apple is hindering so-called “super apps” that can serve as a platform for various services. In addition, the group has put obstacles in the way of competing chat services and games that run on servers on the Internet.
Changes that the US government might impose will not necessarily impact users in Europe. Apple has just had to restructure its EU business in some fundamental ways because of the new DMA digital law. For the first time, the company allowed apps from platforms other than the in-house app store to be loaded onto iPhones.
Apple: Downloads from other sources risky for users
However, some large app providers such as the music streaming market leader Spotify and the “Fortnite” company Epic Games criticize that Apple has made the conditions so unfavorable for developers that most people would not accept it.
Apple emphasizes that downloading apps from other sources involves risks for users that must be protected. The EU Commission recently imposed a fine of 1.84 billion euros after a complaint from Spotify because Apple had hindered competition in music streaming. Of these, 1.8 billion were intended for “deterrence,” it was said.
The US lawsuit takes direct aim at the so-called digital fortress that the California-based company has built around the iPhone and other successful products such as the iPad, Mac and Apple Watch. The strategy of creating a “walled garden” where in-house hardware and software work together seamlessly and consumers have to do little more than turn on their devices has made Apple one of the most valuable companies in the world.
The government has already sued Google, Amazon and Meta
The US government is targeting the next big tech company with competition allegations: The Justice Department has already sued Google, and the US Trade Authority FTC is taking action against Amazon and Facebook parent Meta. For a long time, companies benefited from rather lax regulation in their home market, but that has changed in recent years. The proceedings in these cases usually take years.
The increased monitoring of corporate mergers and business transactions is sometimes met with resistance in the business world. Business people accuse the US government of overreacting. Others see the move as long overdue.