According to a new case, the non-competitive behavior of this large technology company is affecting various industries such as finance, fitness, gaming, social media, news, entertainment, and others.
According to the US government, Apple is like a disease: spreading further and eliminating any competition that comes its way. This issue has impacted most parts of the world, to the extent that Apple’s own products have suffered, making the iPhone worse off.
According to a new lawsuit, the anti-competitive behavior of this large technology company is affecting various industries such as finance, fitness, gaming, social media, news, entertainment, and others.
“As long as Apple’s measures, which unfairly limit competition and prevent others from fairly participating in the market, are not stopped, its domination over iPhones can spread to other markets and sectors of the economy.”
Last week, the US Department of Justice officially filed a case against Apple, alleging that the company unlawfully used its ownership in the smartphone market to maintain its position.
A few days later, the European Union announced that it would investigate Apple, Meta, and Google on these claims that they are not acting properly on the Digital Markets Act (DMA).
Apple now faces regulatory scrutiny on both sides of the ocean. Once a scrappy startup and still often perceived that way, the company has become one of the largest businesses in the world.
Recently, it seems governments are beginning to see it as a threat – a danger that could harm their citizens.
The actions in both Europe and America are based on a simple premise: that Apple’s control over its platforms can eliminate competition and thus harm consumers, and that its power needs to be curtailed through regulation.
For example, American lawsuits reveal that Apple can use its control over the iPhone and its platform to benefit Apple Watch, meaning that other potentially superior smart watches cannot obtain such features. While it’s one among many complaints, they largely stem from the same issue: features and benefits are hidden from consumers so that Apple can maintain its power and profits.
Apple sees various aspects of regulation as a threat – or at least wants people to think so. In response to American action, its statement suggested that it could be forced to fundamentally change.
It was further stated, “The lawsuit jeopardizes Apple’s identity and unique features that make Apple’s products prominent in extremely competitive markets. If successful, it could limit our ability to innovate and provide new technology that people expect from Apple, which connects hardware, software, and services. Additionally, it could establish a dangerous precedent, giving governments significant control over people’s technological choices.”
Apple is right that the consequences of action can be dramatic. For instance, DMA allows authorities to fine up to 10% of a company’s annual income.
The American case did not provide much clarity on the demands. It only mentioned ‘relief’ that would prevent Apple from breaking the law. However, this too – still – could lead to dramatic penalties.
Yet, it’s also unusual for a company to publicly respond to these rules and regulations. For example, it seems they have reached out to DMA to understand, experiment, and then make changes if necessary.
During recent hearings of the European Union case, Apple warned an affected developer that some parts of the legislation could be concerning and that they should keep an eye on the response.
Similarly, it seems that Apple, a few weeks prior to this public action, changed its rules to get ahead of the Justice Department, a key part of which was streaming game services, a critical part of the complaint.
This is an issue in trying to control companies through courts. The European Union’s law took years to prepare and includes a full set of rules and penalties for not following them.
It’s also necessary in it that Apple allows its users to download apps from other third-party app stores – Apple has complained about changes for years, and it might only have implemented them in the most resistant way, but it has agreed that it needs to do so.
The US government has made it difficult to pass new laws possibly due to political issues and instead chosen to use existing laws against Apple.
They are attempting to rein in companies. The fundamental principle – that leasing can be legal, but using that leasing status to control the market is not permissible – has been applied to technology companies, a notion never contemplated by the lawmaker Senator John Sherman.
For example, it was utilized in 2001 when the US government filed a lawsuit against Microsoft, alleging that it had unlawfully established leasing in the browser market with its Windows products.
The government initially sought to dismantle the company, but later reached a settlement with Microsoft, accepting limited new regulations on Windows, some of which were later overturned on appeal.
At that time, this case was celebrated as a major advancement in computer-related regulations – although Microsoft remained dominant in the market, and it was not the government but rather the mobile revolution that partly ended it.
Today, Apple’s case resembles the recent versions of old cases, but instead of targeting home computers, it is focused on smartphones that people carry in their pockets.
The newest government lawyers, associated with the latest technology, are included, but they are robustly defending those fundamental principles.
The outcome could also be similar: a silent agreement with little change, followed by grand statements from both sides, and potentially alterations in the tech landscape.