The Department of Justice case will hang over Apple for years
The US Department of Justice has enlisted more help in its omnibus and controversial antitrust suit against Apple, with the count now up to 20 co-plaintiffs.
The four states added in an amended complaint filed on June 11 are Indiana, Massachusetts, Nevada, and Washington. The amended filing contains no additional information other than the additional states jumping on.
“We welcome the States of Indiana, Massachusetts, Nevada and Washington, who join our existing coalition to restore competition in the smartphone markets that Apple has monopolized,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division in a statement. “We look forward to litigating this important case alongside our state partners to deliver the benefits of competition to consumers, app developers, accessory makers and the American public.”
After years of speculation and rumors, an official announcement from the Department of Justice on March 21 confirmed that it is suing Apple on antitrust grounds. The United States versus Apple lawsuit addresses multiple issues, spanning nearly every aspect of how Apple runs its business.
The Department of Justice says that Apple has violated section two of the Sherman antitrust act, in five ways.
- Restrictions on the App Store applied to “super apps,” and in doing so, limiting the growth of apps for third parties
- Cloud streaming services are limited by Apple, specifically game-streaming services
- Excluding cross-platform messaging apps, forcing people to continue to buy iPhones to maintain messaging
- Diminishing the functionality of non-Apple smartwatches, by limiting access to software and hardware features
- Limiting digital wallets, and preventing use of the near-field communications to third-parties
In a press conference about the event, US Attorney General Merrick Garland complained about 30% fees on the App Store, degraded experience for third-party accessories, and leans heavily on Messages as part of the suit. Based on the statement, it’s not clear if the US understands that RCS is coming to Messages, comprehends the limitations of the SMS standard that Messages utilizes to connect with devices that are not iPhones, or knows that the fee structure on the App Store is not a full 30% across the board — and is free for small developers.
According to Apple, the DOJ has brought an antitrust case as a Section 2 Sherman Act claim, and that this can only “move past the pleadings” if it is shown that three specific allegations are valid. The DOJ, says Apple, has to show that the company has:
- Monopoly power in a relevant market
- Has performed anticompetitive conduct
- It has had anticompetitive effects
Apple then says that the DOJ has accused it of restrictions that it has then failed to show have had anticompetitive effects. Apple “faces fierce competition from well-established rivals” and does not have “the market share necessary to establish or infer market power.”
Consequently, Apple is asking the court to dismiss the case. But it’s also going further in accusing the DOJ of attempting to change antitrust law.
If Apple’s motion to dismiss is not upheld, the DOJ’s case will continue and proceed to a full hearing. The dates for this are again down to the court.
A ruling on the motion to dismiss is expected by the end of July. Regardless of that ruling, with appeals expected after the trial regardless of outcome from either side, it’s unlikely that the case will be resolved for years.
