The iPhone ecosystem in the sights of American justice and government

2024-03-21 17:15:23

The US government sued Apple on Thursday, accusing the tech giant of illegally maintaining a monopoly on its iPhone by stifling competition and imposing exorbitant costs on consumers.

Published on : Modified :

4 mn

Will the iPhone preserve its exclusivity? The American government took Apple to court on Thursday March 21 for monopolistic practices linked to its iconic smartphone and the constraints set by the Californian group for application developers.

“All the decisions taken by Apple have established and strengthened the defenses protecting its monopoly in the field of smartphones,” argues the American government, which joined forces with prosecutors from fifteen states and that of the federal capital Washington to seize the federal civil court in New Jersey.

In doing so, Apple harmed “users, developers, and other parties who helped make iPhone what it is today,” the subpoena document continues.

“If this situation is not called into question, Apple will continue to solidify its monopoly on smartphones,” predicted Justice Minister Merrick Garland at a press conference.

US Justice Minister Merrick Garland during a press conference announcing an antitrust lawsuit against Apple, March 21, 2024 in Washington © Mandel Ngan, AFP

According to the Department of Justice, the Cupertino (California) group prevented or disrupted the creation and offering of services capable of being used on competing smartphones and easily switching from one to another.

He mentions “streaming” services on iPhone, but also digital wallets that can be used on several platforms.

Apple has also obstructed the development of messaging services that can be used across multiple media.

Merrick Garland pointed out that on Apple’s messaging system, iMessage, conversations with smartphones from other brands were not encrypted, unlike exchanges between two iPhones, and technical capabilities were limited.

Therefore, he explained, “iPhone users have the impression that competing smartphones are of less good quality (…) even though Apple is responsible” for these degraded features.

The government claimed to have relied on internal documents showing that the company had knowingly acted to exclude competition and innovations that would have threatened its economic model.

“Dangerous precedent”

The government is also accusing Apple of having voluntarily prevented the use of its connected watches with devices other than the iPhone, or of dissuading the creation of a “super app”, which would bring together several services on the same platform.

“Consumers should not have to pay higher prices because companies violate competition laws,” said Merrick Garland.

If the procedure resulted in a decision binding on Apple, “it would set a dangerous precedent, allowing the government to weigh heavily in the design of consumer technology,” the company said.

Apple has been accused for several years of imposing drastic conditions on companies that offer services on the iPhone and of preventing them in particular from creating their own application store to directly monetize their content.

The European Digital Markets Regulation (DMA), which came into force in mid-March, requires six of the largest technology companies, including Apple, to open their platforms to competition.

In response to this text, Apple said that it would soon allow its users in the European Union to download applications directly via websites.

In September 2021, a federal judge in Oakland (California), seized by the video game publisher Epic Games, ordered Apple to no longer prevent third-party companies from using their own payment system.

The Apple brand proposed an alternative option authorizing these external purchases, but predicting that it would continue to charge a commission of 12 to 27% on each transaction, compared to 30% on the App Store, a formula denounced by many major players. digital players.

The action announced Thursday is a new example of the all-out offensive led by the Biden government against what it considers to be anti-competitive practices, in the technology sector but also beyond.

He is notably involved in a lawsuit against Google, accused of maintaining a monopoly on the search engine market.

After a first part which lasted several weeks at the end of 2023, the hearing must resume in the spring for the pleadings, with the decision expected by the end of the year.

On the New York Stock Exchange, Apple shares fell 3.46% around 4:30 p.m. GMT.

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