Washington D.C., March 21, 2024 – In a move that could reshape the tech industry, the US Department of Justice (DOJ) and a coalition of over a dozen states filed a landmark antitrust lawsuit against Apple on Thursday. The lawsuit accuses the tech giant of employing anti-competitive tactics to maintain a monopoly in the smartphone market.

The DOJ alleges that Apple has engaged in several practices that stifle competition, including:

• Blocking innovative apps: The lawsuit claims Apple has blocked or restricted access to certain apps on the App Store, hindering competition from potential rivals.
• Degrading functionality of competitor messaging: The DOJ alleges Apple has intentionally made it difficult for Android messages to function seamlessly on iPhones, giving iMessage an unfair advantage.
• Maintaining a closed ecosystem: Apple’s “walled garden” approach, where its devices and services are tightly integrated, limits consumer choice and restricts the ability of other companies to compete within the iOS ecosystem.

In a pointed critique, U.S. Attorney General Merrick Garland targeted Apple for its business practices regarding interoperability between iPhone and Android devices.

“Any iPhone user who’s encountered a green text bubble or struggled with a low-resolution video from an Android device would understand the issue at hand,” Garland stated. “Apple appears to engage in anti-competitive behavior by undermining the messaging functionality between its iPhones and non-Apple products. This is evident both in Apple’s own messaging app and through the limited capabilities allowed in third-party messaging apps when communicating with iPhone users.”

Garland explained, “When an iPhone user sends a message to someone without an iPhone using Apple’s Messages, the text is distinguished by a green bubble and offers reduced features. The messages aren’t encrypted, video quality is compromised, and users lack the ability to edit messages or view when someone is typing. This downgrade in messaging experience leads to a perception of non-Apple smartphones as inferior, as iPhone users have a diminished experience when communicating with friends and family who use these other devices.”

According to the lawsuit, these practices have harmed competition in the smartphone market, giving Apple undue control and potentially stifling innovation.

Years of Scrutiny Lead to Blockbuster Lawsuit

The lawsuit comes after years of criticism of Apple’s App Store policies. Developers and app makers have long complained about mandatory fees, restrictive app review processes, and limitations on offering alternative app stores outside the App Store.

This lawsuit marks a significant escalation in the government’s scrutiny of Big Tech companies. Apple is the latest, but certainly the largest, tech giant to face antitrust accusations in recent years. The DOJ’s action reflects a growing concern over these companies’ potential dominance and their impact on fair competition and consumer choice.

Apple’s response

In the wake of the allegations, Apple released a statement early on Thursday reasserting its commitment to ongoing innovation while contending that the lawsuit’s success could have detrimental consequences.

Directly from the statement: “Our relentless dedication to innovation ensures the delivery of technologies that our customers love—our mission is to design products that offer seamless integration, enhance user privacy and security, and provide an immersive experience for our users. This lawsuit threatens the essence of our brand and the core principles that set our products apart in the competitive market. If this legal challenge prevails, it might seriously hamper our capacity to produce the cutting-edge technology that Apple users expect, where the perfect harmony of hardware, software, and services is crucial.”

The company’s statement further asserted, “A victory in court for this case could set a dangerous precedent allowing undue government interference in the tech industry. We maintain that this lawsuit distorts the facts and has no substantial legal grounds. We are ready to robustly contest these allegations.”

Apple has noted that the Justice Department has revised the legal foundations of its case multiple times throughout a four-year probe, influenced by other judicial decisions that have weakened the government’s position.

Illustrating this point, Apple highlighted during a press call on Thursday that an appeals court ruling from last year determined that the company had not breached US antitrust laws with its App Store, significantly undermining the DOJ’s arguments.

Apple refused to disclose how they knew of the Justice Department’s shifting strategy, invoking the necessity of confidentiality.

Lastly, Apple criticized the DOJ’s attempts to coerce the iPhone into imitating Android devices — a change they claim is contrary to Apple customers’ preferences — and argued that it would essentially convert the US government into an inadvertent architect of technology.

Potential Implications for Apple’s Future

The lawsuit is likely to be a lengthy and complex legal battle. Apple has vehemently denied the allegations and is expected to defend strongly. The outcome could have far-reaching implications for the tech industry, potentially leading to changes in App Store policies, device interoperability, and the overall structure of the smartphone market.