The big Apple lawsuit explained: why Apple is being sued and what it means for the iPhone
In a move that has sent shockwaves throughout the technology industry, the US government is suing Apple through the Justice Department for what it considers unfairly and illegally building a monopoly around the iPhone.
You can read the full file herebut here we’re going to break down the key points for you: why Apple is being sued, what this could mean for the iPhone and the tech industry in the future, and what the arguments are on both sides.
The story is likely to dominate tech headlines for years to come, and it asks fundamental questions about what is fair and appropriate in the tech sector – how far can big tech go to protect market share and grow revenue? And how could this change the iPhones and devices we use every day – let’s dig deeper…
Apple Lawsuit: Why Is Apple Being Sued?
In the words of the DOJ, Apple’s “exclusionary behavior” over the years has made it harder for users to switch smartphones, and for other companies to innovate their own apps and products, while raising costs for developers, businesses and consumers have risen. Those are the three main points of attack in the case against Apple.
In more specific terms, we’re talking about decisions like Apple blocking iMessage clients on Android phones, imposing a 30% tax on every purchase made through apps, and not enabling Android support for the Apple Watch. These are the same issues that Apple is having trouble with in the EU, although there is no guarantee that the US rulings will be the same as in Europe.
According to the lawsuit, Apple’s unfair practices include Internet browsing, video calling, news subscriptions, entertainment services, car services, advertising, location services and more. It is clear that Apple intensively protects technologies such as FaceTime and CarPlay, but the big question is: is this anti-competitive?
Apple Lawsuit: Does the iPhone Really Have a Monopoly?
That’s what the lawsuit claims, although Apple obviously disagrees. There’s going to be a lot of debate about this: for starters, no one is exactly sure of the market share the iPhone has in the US, although most estimates are around 60%. The US lawsuit introduces the rather vague concept of the ‘performance smartphone market’, in which iPhones apparently account for over 70%. Around the world, roughly a fifth of smartphones sold are iPhones, which is hardly monopoly levels.
With the lawsuit being filed in the US, most of the debate will likely focus on Apple’s home country. Whichever numbers you choose, more iPhones are sold in the United States than Android phones – is that because the iPhone is better, or because Apple is making it harder than it needs to be to switch to Android? That is an important question in this case.
As our own US Editor-in-Chief Lance Ulanoff puts it: “It seems to me that the DOJ is confusing ‘monopoly’ with ‘ecosystem.’ Apple’s complete control, from silicon to components, from platform to consumer hardware, is virtually unmatched in the industry. The Apple ecosystem and the significant consumer benefits it delivers flow directly from that control.”
Apple Lawsuit: How Did Apple Respond?
You would expect Apple to reject the DOJ’s claims, and the company has done so emphatically: “We believe this lawsuit is flawed on the facts and the law, and we will vigorously defend against it” , Apple told us. “This lawsuit threatens who we are and the principles that distinguish Apple products in fiercely competitive markets.”
Despite virtually every point the DOJ makes, Apple’s argument is that it is actually protecting users and (legally) protecting its own business in an ultra-competitive market. For example, keeping iMessage exclusive to Apple products allows Apple to guarantee the security and privacy of conversations on the platform, Apple would argue.
Apple has also pointed to the huge amounts of money it makes for app developers – far more than developers make through Android – and believes that switching between iPhones and Android phones is much easier than the DOJ claims. Moreover, it says that a victory for the US government here would set a “dangerous precedent” when it comes to authorities’ interference in technological innovation and business freedom.
Apple lawsuit: What happens next?
A lot of legal hassle, to put it simply. It will take years to resolve, so don’t expect anything to happen to the iPhone or iOS immediately. If Apple wants to avoid a long and drawn-out debate in court, the company could agree to a settlement – some analysts suggest this could take between 12 and 18 months.
Take, for example, the case of the Epic Games lawsuit against Apple, which specifically challenged Apple’s insistence that all iOS developers must accept in-app payments through the Apple App Store – and only through the App Store. In January 2024, the appeals surrounding that case were still pending, although the procedure had started in August 2020. This is a much more complicated and far-reaching matter.
For the time being, we are still waiting for the lawsuit to be assigned to a judge. Apple could then request that the case be dismissed on the grounds that it is without merit. It is notable that the lawsuit was filed in the state of New Jersey, which may have been a strategic choice to have the case handled by the parties. friendly to antitrust rulings.
What does this mean for the iPhone?
We’re still in the very early stages of this legal battle, so it’s hard to know for sure how this will affect the iPhone in the future. We can take some clues from what has already happened with Apple in the EU: However the case is decided, it is likely that Apple will have to make some changes and concessions to the Justice Department.
For example, users in the EU can now install alternative third-party iPhone app stores, in addition to the official Apple app. That gives users more choice about where they get their apps and games, and developers the ability to charge for in-app purchases without having to give 30% of the cut directly to Apple.
Apple has also taken a number of preventive steps to circumvent antitrust laws. It now allows so-called ‘super apps’ – apps that provide access to many other apps, such as cloud gaming portals – in the App Store. It will also add support for the RCS standard to the Messages app sometime this year.
Here’s what we’ll likely see in the future: a more open iPhone, one that’s friendlier to other platforms and devices. It’s hard to know how extensive the changes will be, but eventually we could be talking about iMessage and FaceTime on Android, or the Apple Watch supporting Android (something Apple says it has looked at before).
It will be fascinating to see how this plays out, and we will keep you informed at every stage of the process. However, it seems clear, for better or for worse, that the iPhone and Apple’s other devices will never be quite the same again.