Apple, the Department of Justice, and Other States and District Attorney Generals are suing Apple for unfair pricing to make its users more reliant on its phone

The Department of Justice and 16 other state and district attorneys general are accusing Apple of unfairly hiking prices for consumers and developers to make users less reliant on its phones. The parties claim that Apple imposes contractual restrictions on developers in order to prevent competition and that it unfairly prevents critical ways of accessing the phone.

The case is being filed in the federal court in New Jersey. Attorneys general from New Jersey, Arizona, California, Connecticut, Maine, Michigan, Minnesota, New Hampshire, New York, North Dakota, Oklahoma, Oregon, Tennessee, Vermont, Wisconsin, and the District of Columbia joined the DOJ in the complaint.

US Attorney General Merrick Garland acknowledged the resource imbalance the government is up against, facing a company worth trillions of dollars. Garland said that it’s important for us to allocate our resources to protect the American people when an institution with a lot of resources is hurting the economy. Individual Americans have no ability to protect themselves.

Apple vs. App Store: An End to Apple’s Evil? The US v. Apple Case in a High-Energy Antitrust Competition

Cloud streaming services were forced to use the web browsers on the iPhone instead of their game hubs in order to make it easier to find and access them. Apple reversed the rule by allowing cloud streaming services to submit a single app with the capability to stream all of the games offered in their catalog. Despite this, the DOJ claims Apple “wielded its power over app distribution to effectively prevent” developers from offering cloud streaming services on the iPhone, adding that “even today, none are currently available on the iPhone.”

One benefit of the DOJ antitrust case against Apple is that it will probably drag out for years. In the interim, enforcers are keeping a close watch on how Europe is handling the DMA and what kind of rules and enforcement mechanisms are in use in the digital markets. A court order in US v. Apple could be as far as three years down the line or more, even before factoring in appeals — it’s possible that in the midst of its ongoing troubles with European regulators, Apple reads the writing on the wall and changes its behavior on its own. Bonta says they were not holding their breath for that. “We’re bringing the litigation.”

The Department of Justice went to trial over accusations that they stomped out competing search engines. And the FTC, is working on a massive suit against Amazon.

And the company’s exclusive software features — like the non-interoperable aspects of iMessage — make Android phones seem inferior in the eyes of many consumers, even when those drawbacks have everything to do with how Apple conducts business and very little to do with how companies like Samsung, Google, and others design and manufacture their own devices.

Apple plans to support RCS, a modern messaging protocol for better cross platform communication later this year. But even then, don’t expect those bubbles to change color. In the United States, the green bubble stigma is a real thing. And the DOJ says it’s a huge factor that contributes to iPhone lock-in.

The quote from Tim Cook that made headlines at the time is in the complaint. “I can’t send my mom certain videos,” an audience member told Cook when complaining about the cross-platform messaging quagmire. “Buy your mom an iPhone,” Cook responded.

Although US v Apple does have a lawsuit that is large and long, it is a rather concise list of the annoying things Apple has done to me over the years. Is green bubbling my friends and loved ones? Not being able to buy Kindle books in the Amazon app? The way I can not change the tap to do anything is not open Apple wallet. Is the laggy badness of every non-Apple wristwatch when linked to the phone? The DOJ knows. The DOJ cares. I feel seen.

Phil Spencer, Microsoft gaming CEO, recently commented on Apple’s plans to allow third-party app markets on the iPhone in order to more “open” the App Store in the EU.

As cloud streaming services started becoming more popular in 2020, Apple introduced new rules that seemed designed to give services like Xbox Cloud Gaming, Facebook Gaming, and GeForce Now a place on the App Store. But in reality, it was not the case. The rules severely limited the presence of cloud gaming services on the App Store, as Apple required developers to submit their games to the App Store for approval individually — rather than having them exist in a singular hub of games.

However, the DOJ’s lawsuit claims that Apple doesn’t want users or companies in the US to benefit from super apps. It says that during a board of directors presentation, Apple said that Super apps are a major reason for their sales in countries where they are popular. Someone using a super app doesn’t necessarily have to be tied to any one platform like Apple is.

The DOJ claims that this setup is convenient for both users and developers because users do not have to download a bunch of separate apps to gain access to different capabilities. Meanwhile, developers also don’t have to push separate app updates for Android and iOS, since these programs run within an app instead of on a phone itself.

According to the lawsuit, Apple recognizes that mini programs would threaten its monopoly. “As one Apple manager put it, allowing super apps to become ‘the main gateway where people play games, book a car, make payments, etc.’ would ‘let the barbarians in at the gate.’”

Apple will begin letting mini apps and games use its system in January despite the lawsuit that says it blocks them from using an in-app purchasing system. It’s unclear whether the change addresses the formatting arguments the DOJ makes in its lawsuits, as the App Store Guidelines only mention that mini apps should adhere to privacy rules, among other unrelated requirements.

Apple’s annoyances aren’t theirs to be. They are your fault, not mine. The DOJ has no interest in Epic v. Apple

Apple is worth nearly $3 trillion, making it one of the highest valued companies in the world. And its iPhone is one of the most popular phones on earth, dominating the global market, according to market analyst firm IDC. The Justice Department alleges it’s by no coincidence that Apple was able to ensure its place at the top.

Antitrust action in the tech industry has been a focus of the Biden administration, which has brought suits against both Amazon and Google by the DOJ. The case shows why we need competition policy to be renewed and clear rules for Big Tech platforms.

When asked about the threat the new antitrust lawsuit might pose to Apple’s business, a DOJ official noted that “there are actually examples where companies, after having been charged and had to change business practices because they violated the antitrust laws in the long run, end up being more valuable than they were before.” Microsoft, thanks to its success in cloud services and more recently AI, is now the most valuable company in the world.

The Microsoft company was accused in the late 1990s of forcing PC manufacturers and others to use its web browser Internet Explorer. The company fell behind a wave of startups such as Amazon that grew into giants because they made web services useful and lucrative.

The Apple complaint is well written and shows the Department of Justice how they have learned from the different cases they have been handling, says William Kovacic, who was a former FTC chair. He says the government probably paid close attention to what happened during the lawsuit against Apple. “They’ve written a complaint in a way that seeks to avoid weaknesses that I think the judge might have seen in that case, to add additional material so it’s not simply a reprise of Epic v. Apple.”

Meanwhile, the opening volley in its battle against one of America’s favorite companies is a killer start, not least in part because of an unusual degree of lawyerly insight into the human psyche. The complaint speaks directly to the tech aficionados rather than speaking over them and to a federal judge. You have to be annoyed with Apple because of the more you buy into it. The DOJ states that Apple’s fault, not yours, for the hundreds of little annoyances. It’s an extremely tempting invitation to come rage with them. Nerds are able to bring the hate quite as much as anyone else because they kind of have a point.

The similarities that a judge will find relevant are not as relevant to the general public. What the DOJ wants out of this callback is bigger and more important. To tie these two cases together in the popular consciousness, it wants to define itself and its role in history. “When Apple began developing mobile consumer devices, it did so against the backdrop of United States v. Microsoft, which created new opportunities for innovation in areas that would become critical to the success of Apple’s consumer devices and the company itself,” the complaint reads.

It goes on to show how the iPod went from being just for Mac computers to being the most popular mp3 player in the world. The rest is… history? I’m not really sure Apple owes the DOJ a thank-you card for making the iPhone possible, but not having to deal with Microsoft’s bullying along the way didn’t hurt.

The DOJ v Apple case is related to the case against Microsoft. Microsoft’s control over middleware — software that allows other software to run on the operating system, like web browsers or media players — was at the heart of US v. Microsoft. The DOJ found that Microsoft used a variety of bully tactics to keep other companies from developing middleware that would compete with or draw developer attention away from its own platforms. Real bad-guy stuff!

The DOJ alleges that Apple fears the dissolution of PCs as much as Microsoft fears PCs. Microsoft was right to be afraid, it seems as if Apple is also.

In the lawsuit, Epic argued that Apple had illegally monopolised the market for app distribution and payments on its iPhones, permitting it to unfairly condition access to the App Store on the developer’s use of a second product. But Epic lost on most of its claims and the ruling was upheld by an appeals court. Epic did win one key point, requiring Apple to let developers link to outside payment options. (Epic and other developers have recently complained to the district court, saying Apple is not abiding by that requirement, rendering it ineffective.)

Apple vs Apple in the DoJ’s Second Anti-Monopole Case: How Apple Will Fail to Get a Break-up?

John Kwoka is a professor of economics at Northeastern University and recently served as chief economist to the FTC. The best way to look at it is to see it in a way that makes sense of the core problem.

The DOJ’s complaint opens by quoting an email exchange from 2010 between Apple cofounder and then CEO Steve Jobs and an unnamed “top Apple executive.” It describes an email from an executive to Jobs that explained the ad in question, in which a woman learns to read books on her phone with the help of an Apple app and later uses Amazon.com to buy them on her phone.

Even if the DOJ’s most narrow market definition is accepted by the court, it still will be difficult for the government to prove Apple’s dominance. By comparison, in the DOJ’s second anti-monopoly suit against Google’s advertising technology business, it alleged Google has maintained over a 90 percent share of the publisher ad server market in the US and an 80 percent share of the US advertiser ad network market.

The court will also weigh Apple’s arguments for why it had legitimate business reasons to make the decisions that the government says were exclusionary.

In an interview with The Verge, William Kovacic, the former chair of the Federal Trade Commission and a professor at the George Washington University Law School, explains that “the Third Circuit is a jurisdiction with some pretty good law for plaintiffs on monopolization issues.” Dentsply, a company that manufactures fake teeth, was the target of an antitrust lawsuit by the DOJ.

Allensworth says a break-up is very unlikely. “They don’t seem to be asking for one. They’re asking the court to enjoin, which means to stop doing the stuff that they’re complaining about. In that sense, they’re asking for something very similar to what Europe has asked Apple to do.” Apple is required to make changes to its products in order to create a more competitive environment according to the European Digital Markets Act.

Enforcers aren’t typically shy about telling the press that all options are on the table. But DOJ officials who briefed reporters on background Thursday were careful not to address the exact kinds of remedies they would seek. Instead, they emphasized that the case will start at an evaluation of Apple’s liability for the alleged harms.

The enforcers are focused on injunctive relief according to California Attorney General Rob Bonta, one of the state AGs who joined in the DOJ lawsuit.

The Epic v. Apple Case: The DOJ Announces a New Case of Disruption of Dentsply

Behavioral remedies can be slippery and hard to keep track of, while breakups are decisive and final. Allensworth said it was hard to think about saying Apple can make phones and not have an operating system or an app store.

Still, behavioral remedies can come with their own problems and a long tail of ongoing conflict over the terms of the remedy — the never-ending saga of Epic v. Apple is one example. Kwoka says Apple can “figure out ways of throwing sand in the gears of that process.”

While a district court initially ruled in Dentsply’s favor, the Third Circuit reversed this decision and found that the company’s “grip on its 23 authorized dealers effectively choked off the market for artificial teeth, leaving only a small sliver for competitors.” Since the DOJ emerged victorious in this particular case, it may think it’ll have an advantage against Apple here.

The case was low tech and involved dentures. The DOJ won with an opinion that lays out their view of the law and it’s going to be good for them.

At the time, the DOJ accused Dentsply of maintaining a monopoly. Dentsply manufactured and sold artificial teeth to dental laboratories who used them to make dentures. But, as outlined in the lawsuit, Dentsply adopted a policy that blocked authorized dealers from adding “further tooth lines to their product offering.” This prevented dealers from selling other brands of artificial teeth to laboratories, allowing Dentsply to “exclude competitors from the dealers’ network.”

Bonta states that they are impacted by the conduct of Apple and that they are based in New Jersey. The lawsuit lists both Samsung and Google as the two “meaningful competitors” to Apple in the premium smartphone market and specifically points out that Samsung’s US headquarters are “located in this district.”

You can almost forget this is a lawsuit, until you get to page 57. There, the document suddenly changes voice, finally pivoting into a formal communication to a judge. The complaint refers to the portable devices that enable communications over radio frequencies, instead of telephone landlines.

The DOJ complaint tries to put a face to the burning grievances of every kind of nerd. The only thing that’s missing is a tirade on how ever-increasing screen sizes are victimizing me, a person with small hands. Attorney General Garland made no mention of how Sarah may like to see the SE return to its 2016 size at the Thursday press conference.

There are even a beguiling few paragraphs in which the DOJ compares the need to regularly update AAA video game titles to the onerous process of App Store review and then concludes that “Apple’s conduct made cloud streaming apps so unattractive to users that no developer designed one for the iPhone.” At no point does the DOJ state that Apple is the reason I cannot play a game on my phone. but it’s also not not saying that. Is Apple standing between me and my games? I wondered, as I searched around for my pitchfork.

A lawsuit is a communication between lawyers and a judge. Because it is a specialized missive to a specialized audience, it can become highly technical and jargonistic — this is especially so when it comes to niche areas of law like antitrust or complex sectors of litigation like technology. Tech lawsuits are often obscure even to techies, interspersed with bizarre software terminology that is pretty much meaningless outside of a court of law. For example, antitrust law loves middleware and copyright law loves technological protection measure.

A scene! There are characters! The invocation of Steve Jobs himself! Personally, I believe the paragraph could use a hard edit prior to publication, but it should not be considered narrative nonfiction.

In fact, this opening paragraph isn’t even numbered: legal filings like this generally have every paragraph numbered. It is part of a literary curtain-raiser that is near the table of contents. It is not against the rules to have a single paragraph that is not in the numbered section.

The opening paragraph of the DOJ Antitrust lawsuit against Microsoft is properly labeled as paragraph 1.

This action is under the Sherman Act to restrain anticompetitive conduct by Microsoft and to stop it from engaging in future conduct.

It’s almost like the lawyers in US v. Microsoft wrote a document asking a judge to apply the Sherman Antitrust Act to the market for personal computers! What a waste of time!

The DOJ claims that unspecified surveys have reached similar conclusions, finding that the devices linked to their iPhones deter them from switching to Android.

In March 2016, Apple’s senior vice president of worldwide marketing—apparently Phil Schiller—is said to have looped in CEO Tim Cook on a similar discussion, forwarding an email that said “moving iMessage to Android will hurt us more than help us.”

The ad has been portrayed by the suit as triggering concern inside Apple. The executive wrote to Jobs that it is easy to switch from the mobile phone to the operating system. Not fun to watch.” The suit says Jobs wrote that Apple would force developers to use its payment system to lock in both developers and users on its platform.