US Sues Apple for Illegal Monopoly Over Smartphones

Facts

• The US Dept. of Justice filed a lawsuit against Apple in a New Jersey federal court on Thursday for allegedly abusing its dominance in the smartphone market to artificially drive prices up for consumers and box out competitors.¹
• According to the complaint, the tech giant restricts the functionality of non-Apple devices and access to contactless payment for third-party digital wallets, while refusing to allow its iMessage app to exchange messages with competing platforms.²
• This is reportedly the most pivotal legal action by the Justice Department against the Cupertino, Calif.-based company that has nearly a two-thirds share of smartphone sales in the US in Q4 2023 to date.³
• Apple argues that the lawsuit, if successful, would affect its ability to create products that people expect from the company and also set a 'dangerous precedent' for government officials to shape users' technology.⁴
• This comes as the Biden administration has ramped up efforts to enforce antitrust statutes against tech giants, filing lawsuits against Google and Amazon and attempting to block acquisitions by Meta and Microsoft.⁵
• Meanwhile, Meta, Microsoft, X (formerly Twitter), and Match Group joined on Wednesday a protest from video games maker Epic Games that claims Apple has violated a court-ordered injunction regarding payments in its App Store, which stems from their ongoing legal battle.⁶

Sources: ¹Wall Street Journal, ²Associated Press, ³New York Post, ⁴Verge, ⁵Independent and ⁶Reuters.

Narratives

• Pro-establishment narrative, as provided by Washington Post. It takes only an Apple device and another from a competitor to verify that all allegations in this lawsuit are true. While Apple has claimed that these limitations are in place to protect consumers' privacy and security, the company actually makes chat messages less secure and functional. Additionally, consumers aren't allowed to download innovative apps — including games and payment services. This lawsuit is crucial to better regulating Big Tech.
• Establishment-critical narrative, as provided by Reason. Apple and other big techs are indeed dominant in some very specific ecosystems for now, but it's highly unlikely that this situation will hold forever. The explanation for this spate of populist, bipartisan antitrust actions relies not on actual monopoly concerns, but rather on political agendas to expand control over American businesses. If Apple does harm its consumers, it's up to them — not the government — to say.

Predictions