US Justice Department sues Apple

This article was last updated on March 22, 2024

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An Unprecedented Legal Row

In a historic move, the US Department of Justice, supported by sixteen states, has yanked the chain of technology powerhouse Apple by launching a formidable lawsuit against it. Apple is being accused of employing unfair competition practices with its flagship product – the iPhone. Revealingly, iPhone sales make up more than fifty percent of Apple’s yearly revenue, grossing over 350 billion euros last year. In a news conference lights lit by Attorney General Merrick Garland, it was revealed that Apple is allegedly indulging in “exclusionary and anti-competitive” practices that negatively affect both consumers and app developers. Garland expounded that these practices result in limited choice for consumers, inflated prices, less innovative strides and a dip in quality. For app developers, the situation is compounded by being coerced to adhere to Apple’s stringent rules, effectively isolating them from the competition.

The Elaborate Apple Strategy

The contention here is not solely about a single violation. Rather, the bone of contention is the enduring strategy that Apple has masterminded over the years. The scope ranges from the App Store policies to the fees developers are required to pay, extending all the way to third-party access to critical iPhone functionalities. Over the years, Apple has meticulously constructed an ecosystem – a harmonious blend of the products it sells and its proprietary/premium software – offering seamless integration and smooth functionality. This approach has been a significant driving force behind the brand’s appeal with consumers. However, the flip side of this phenomenon is that it dampens the allure of purchasing devices from other, possibly cheaper, brands due to concerns about compatibility and integration. The prosecutors are unrelenting in their assertion that such unfair practices are manifesting in various ways. Banks are pushed towards collaboration through Apple Pay for contactless payments, while simultaneously being barred from leveraging this technology in their apps. Interestingly, under pressure from the European Commission, Apple has shown signs of yielding ground on this front. Furthermore, restrictions like the Apple Watch only working optimally with iPhones while smartwatches from other manufacturers having compatibility issues with iPhones have also been highlighted by the justice department.

The iMessage Quandary

Adding to the growing list of grievances is the fact that Apple’s messaging service – the iMessage – only offers optimal functionality between Apple devices. Messages sent to non-Apple devices result in lowered-quality SMS messages. In the US, where iMessage has assumed the role of primary communication medium (a title held by WhatsApp in many other countries), this has led to a considerable outcry. The color-coding of text message backgrounds further aggravates the divide – turning blue for Apple-to-Apple messages, and green when sent to Android devices. This essentially excludes Android device users from Apple device-centric group conversations. The Justice Department also pointed out that messages appearing in green bubbles are not encrypted, videos have drastically lower quality, and users cannot modify them post sending. All these are consequences of the message being sent as an SMS.

The Potential Impact

This lawsuit by the American Justice Department symbolizes a direct attack on Apple and its practices. The tech giant has, predictably, come out swinging against the allegations, stating that the case threatens its core ethos and could impede its ability to produce beloved technology products. However, this marks only the incipient phase of a convoluted and prolonged legal process, one with massive stakes. Taking on one of the most cherished gadgets of the American populace is not a move to be taken lightly. With a dominant market share of 65 percent in the US alone, Apple represents a formidable opponent. Further complicating matters is a separate case being handled by the EU against Apple, which recently resulted in a fine worth nearly 2 billion euros charged to the tech titan.