On March 21, 2024, the United States Justice Department decided to sue Apple for monopolizing the smartphone market. According to the United States Office of Public Affairs, “The complaint, filed in the U.S. District Court for the District of New Jersey, alleges that Apple illegally maintains a monopoly over smartphones by selectively imposing contractual restrictions on, and withholding critical access points from, developers.” In other words, the United States claims that Apple’s applications and products are causing people to be too reliant on them, leading to extracting excess money from consumers and therefore mitigating the competition.
What is Monopolization?
A monopoly can be defined as “the exclusive control of a commodity or service in a particular market, or a control that makes possible the manipulation of prices.” Put differently, it’s when a business exclusively owns a type of product or service with no competition and therefore can adjust its prices to its liking — not according to the market. This accusation is fairly severe due to how harmful monopolies are to the United States economy, potentially leading to abuse of power over the economy.
Under what circumstances is the United States suing Apple?
The United States Justice Department is suing Apple for violating Section 2 of the Sherman Act, which states that it is “unlawful for any person to monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations.” In this case, that monopolization is regarding the smartphone market.
The government has five key reasons for this lawsuit: blocking innovative super apps, suppressing mobile cloud Streaming services, excluding cross-platform messaging apps, diminishing the functionality of non-Apple smartwatches and limiting third-party digital wallets.
From these points, it shows that the United States government is not exactly targeting Apple’s most popular product, the iPhone, but more so the Apple-created services applications on it and additional products like the Apple Watch. These topics focus on the idea of Apple excluding other businesses in the market by making their products too “Apple exclusive.”
What happens next?
The turnout of this lawsuit is still relatively new and ongoing, but it has the potential to severely change the way Apple prices and designs all of its products. Depending on the turnout, Apple could change how it designs and creates its apps and services like iMessage, Apple Wallet and iCloud. Apple may also have to change the features and services on Apple wallets.
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