Big Tech is facing a reckoning.
Currently, Google is being sued by the U.S. Justice Department for monopolizing digital advertising services, Meta has been battling an anti-monopoly case from the Federal Trade Commission, and Amazon is now facing a similar case. Microsoft's now-closed acquisition of game maker Activision is still under scrutiny, with the FTC seeking to block it under competitive law.
Now, it's Apple's turn to face the heat.
Today, it was announced that the company is being sued by the US Department of Justice and 16 state and district attorneys general. It is accused of monopolizing the smartphone market.
You can read the lawsuit here, but to summarize, the DOJ is claiming that Apple has used its "control of app distribution or control of APIs" to suppress:
Super apps, which would allow consumers to switch between smartphone platforms. They claim this also harms iPhone users, denying them access to high-quality experiences and harms developers by preventing them from innovating and selling products.
Cloud-streaming apps that would allow for high-quality video gameplay without having to pay for extra hardware. Apple is denying users the ability to play high-compute games, and preventing developers from selling such games. (Note: Apple has already taken some preemptive steps to fix this).
The development of cross-platform messaging apps. The suit claims, "Apple makes third-party messaging apps on the iPhone worse generally and relative to Apple Messages." By doing so, Apple is "knowingly and deliberately degrading quality, privacy and security for its users."
It argues that by "suppressing key functions of third-party smartwatches," Apple has attempted to lock users into using Apple Watches rather than let them choose their watch preference to use with an iPhone.
The filing highlights Apple's hypocrisy on the topic of security. It claims that while Apple spends billions on marketing and branding to promote the self-serving premise that only Apple can safeguard users' privacy, it happily compromises this privacy when it benefits the company's own financial interests.
In sum, the DOJ has thrown a big punch.
But it's hard to know what to make of this; it's harder still to tell if the hit will land.
I'm an Apple user. I have an iPhone, MacBook Pro and AirPods. I've got used to the ecosystem and can't be bothered to consider alternatives. I’ve indulged in a bit of blind consumerism, going with the tide of public opinion. I accept that probably makes me part of the problem.
But in my defense, I've always juggled that convenience with the knowledge that Apple is not a particularly great company. It's a trillion-dollar giant that sits on gazillions of actual cash yet still runs sweatshops to produce its products. It's a corporate bully and throws around its immense power and finances to pressure the government, lawmakers, and industries to keep conditions favorable. It rips off app developers, robbing them of 30% of their earnings to have a space in its app store monopoly. It has done all in its power to try and kill Android and to make the divide between both sets of devices as friction-full as possible. It makes it tedious to repair its products, in favor of you throwing your perfectly good device in the landfill to get the shiny new one. It has long since lost the innovation that made the company great in favor of numbers and shareholder value. And Steve Jobs, the man who kickstarted it all, while a genius, was an asshole to most of his employees.
That’s a long way of saying that, while the company makes decent products, it had this coming. The EU has already clamped down on Apple, forcing it to allow third-party app stores (though it isn't playing particularly nice about it — just ask Epic Games) and fining the company $1.8 billion for breaking competition laws over music streaming. The US could be looking to force similar rulings. We know these companies are too big, too powerful, and have long since forgotten about customer value, becoming all too obsessed with shareholder value. The lawsuit even says as much —
"While Apple's anticompetitive conduct arguably has benefited its shareholders — to the tune of over $77 billion in stock buybacks in its 2023 fiscal year alone — it comes at great cost to consumers."
But it's unclear if any of this will stick. Though some of it seems fair, it's a hard case to argue. Apple kinda has a monopoly on smartphones — it has something like 50-60% of the market — but the company will argue that's because it makes the "best" ones. Customers are free to choose, but they happen to choose iPhones. In many countries, they don't even own the largest market share. So it will likely argue it doesn’t even have a monopoly. It will argue that steps have already been taken to address the cloud-gaming issue. It could be argue that it's perfectly fine (and legal) for its watches to work best with the smartphones it also makes. In relation to App Store monopolies, it can argue it has already won the case against Epic Games that proves against this.
Apple has come out swinging, denying the alleged offenses. In a statement, the company said, "this lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets. If successful, it would hinder our ability to create the kind of technology people expect from Apple."
So, the big question is, how, or even when, does this plays out?
We can expect a lengthy and very expensive fight to begin. We need only look at the cases brought against Google, filed in 2020, and Meta, also filed in 2020, which are both still unresolved, to know that these things will go the distance. These companies have grown so powerful that they can afford to fight this for eternity. It will go on and on and on, and in the end, the DOJ will likely settle for something, anything, that could count as a win to save face.
We can only hope that, whatever the outcome, whenever the outcome, the consumer is the true winner. It's about time the tide started to turn.
