US Senate

Cupertino’s legal problems fly back across the Atlantic

The US government’s monopoly lawsuit directly takes aim at Apple’s competitive ‘moat’, says Jason Walsh
Image: Shutterstock via Dennis

22 March 2024

Hot on the heels of a slap administered by the European Unionnews broke yesterday that the United States Department of Justice (DoJ), supported by 15 states and Washington DC, had filed an anti-trust complaint against Apple, significantly turning up the heat on the Californian giant.

The complaint alleges that Apple has built an illegal monopoly on smartphones with tactics such as hobbling cross-platform messaging and making it difficult for third party device manufacturers to connect to iOS, Apple’s smartphone operating system.

Apple denies the charges, telling Euronews: “We believe this lawsuit is wrong on the facts and the law, and we will vigorously defend against it”.




However, in the words of US attorney general Merrick Garland: “Apple has maintained monopoly power in the smartphone market, not simply by staying ahead of the competition on the merits, but by violating federal antitrust law”.

Strong stuff. So, could we see Apple broken up, in a manner similar to the splitting of Standard Oil back in 1911 or the almost-but-not-quite voluntary breakup of telco AT&T in 1982? It seems unlikely.

Central to the complaint is Apple’s so-called ‘moat’ (occasionally referred to as a ‘walled garden’), the defensive means by which Apple seeks consumer loyalty. Effectively vendor lock-in. 

If Apple loses the case, or even senses that it might, it is likely to loosen up the strictures on developers, giving them better access to iOS. The single most important thing is messaging. 

Unlike in Europe, where use of WhatsApp, Signal and Facebook Messenger and other applications is commonplace, in the domestic US market users tend to stick to the built in messaging application. However, Apple does not allow Android phones access to the advanced features of its messaging network. For example, Android users in a group chat with iPhone users are unable to send large files or photos, edit their messages, or send emoji reactions.

In addition, Android users are given a mark of Cain: the dreaded green bubble. The result is green bubble syndrome, named after the colour of the text ‘bubble’ when Android users send a text message: green, rather than blue. This has created a strange kind of top-down class conflict in the US, with ‘green bubble’ users mocked as being poor and even seen as unattractive dating candidates. (Frankly, this says more about the US than about Apple, but there you are).

Whether or not Apple is a monopoly, it is true that the company works hard to ensure that users stick with it when it comes to upgrade time. Tight integration with Apple’s other hardware and software is to be expected, then, but it does seem that Apple’s main competitive advantage is that once users own an iPhone it is annoying for them to then switch over to an Android device.

Crucially, it is on this basis that Apple has been transformed from a niche hardware supplier for the publishing industry and creative arts into one of the world’s most valuable businesses.

Whatever the outcome of the legal action, its very existence shows just just how much technology, and indeed the world, has changed since the late 1990s when the minnow-like Apple was thought to be the main beneficiary of anti-trust complaints aimed at Microsoft and its Windows operating system monopoly.

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