Today, the U.S. Department of Justice and states including California, New York, North Dakota, Oklahoma, Arizona, and Vermont filed an antitrust lawsuit against Apple. The suit argues that Apple has abused its market power in the smartphone market through a series of anticompetitive actions, such as blocking third-party apps from working, suppressing cloud services for high quality games and services, excluding cross-platform messaging apps, and diminishing functionality of third-party products like smartwatches or digital wallets. The suit follows years of Public Knowledge advocacy urging the United States to reform the nation’s antitrust laws to address gatekeeper conduct by digital platforms and ensure platforms prioritize the needs of users and developers.
The following can be attributed to John Bergmayer, Legal Director at Public Knowledge:
“The DOJ and states have put forward a compelling case, backed by evidence including emails and statements from Apple executives, describing how Apple’s conduct has harmed consumers and held back the development of entire markets. This comes as Apple has been scrutinized by lawmakers, courts, and regulators around the world for its pattern of behavior.
“For too long, Apple has used its market power in smartphones to limit consumer choice, extract excessive fees, and slow innovation that threatens its power over the mobile ecosystem. As the complaint lays out, Apple has restricted competition in app distribution, messaging, in-app payment processing, and hardware accessories, and blocked some categories of app from being available on the iPhone at all.
“By using its control over APIs, app store policies, and developer agreements, Apple has blocked the emergence of cross-platform technologies like ‘super apps,’ cloud gaming, and third-party digital wallets that could increase competition, improve the user experience, and put pressure on Apple’s outsized profit margins.
“The iPhone’s success and value to consumers is in large part due to the vibrant ecosystem of apps and services created by third-party developers. However, Apple’s anticompetitive actions have harmed these same developers by limiting their ability to innovate, reach users, and monetize their apps. The company that used to advertise, ‘There’s an app for that,’ now says to developers: ‘Where’s my cut?’
“Consumers are paying the price for Apple’s abuse of its gatekeeper power – not just in higher smartphone prices, but in reduced innovation and a more limited, locked-down user experience. As the complaint describes, ‘privacy’ and ‘security’ do not justify Apple’s actions. Protecting users does not justify, nor require, anticompetitive and illegal conduct. In fact, as the complaint alleges, Apple’s actions can harm the security and privacy of smartphone users, by putting obstacles in the way of secure, cross-platform messaging.
“We applaud the DOJ and states for challenging Apple’s abuse of its smartphone dominance. This lawsuit is an important step towards restoring competition and unlocking innovation in the mobile ecosystem. We urge lawmakers to support this enforcement action and consider strengthening our antitrust laws to prevent gatekeeper platforms like Apple from engaging in this type of anticompetitive self-preferencing in the future.”
You may view our paper, “Tending the Garden: How to Ensure That App Stores Put Users First,” to learn more about our recommendations to promote the public interest in the app store market.
Members of the media may contact Communications Director Shiva Stella with inquiries, interview requests, or to join the Public Knowledge press list at shiva@publicknowledge.org or 405-249-9435.
