The DOJ has filed a lawsuit against Apple alleging antitrust violations related to the iPhone ecosystem. Update: Statement by Apple.
The U.S. Department of Justice announced today it is suing Apple for illegally monopolizing the smartphone market to the detriment of consumers, competitors, developers and others. The suit focuses on Apple’s resistance to cross-platform messaging, the lack of compatibility between iPhones and non-Apple smartwatches, barring developers from connecting the tap-to-pay feature with alternative digital wallets and making it difficult for customers to switch to alternative smart phones.
The full lawsuit can be read here.
Taking the walled garden to the next level. The DOJ — and the 15 states and District of Columbia that joined the suit — accuses Apple of responding to the threat that cheaper smartphones might “disintermediate” the iPhone, not by offering competitive prices but by making it difficult and expensive to quit the iPhone ecosystem.
In effect, unlike other so-called walled gardens such as Meta and Google, Apple’s ecosystem is not device-agnostic. It’s possible to interact with Facebook or Instagram using any connected device, but it’s typical of Apple’s features and services that the user has to be within the iOS ecosystem to access them.
Apple, Google and Meta are also facing scrutiny for possible antitrust violations under the E.U.’s Digital Markets Act.
Why we care. There is a quiet war being fought between the walled gardens and the open internet. The DOJ might not have a dog in that fight, but this lawsuit sends a clear warning that you can build the walls around your garden but that you can’t put a roof on it too.
It has to be said, though, that there is one odd thing about this lawsuit. While the pleading quotes prima facie problematic statements from Apple executives that appear to show an intent to create a monopoly, one can ask how successful the strategy has been. Android has a worldwide market share above 70%, doubtless due to kinder pricing. In the U.S., the iPhone is in the lead with just over 60% of the market, but that leaves a healthy 40% for its competitors (or competitor).
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MarTechAbout the author
Kim Davis is currently editor at large at MarTech. Born in London, but a New Yorker for almost three decades, Kim started covering enterprise software ten years ago. His experience encompasses SaaS for the enterprise, digital- ad data-driven urban planning, and applications of SaaS, digital technology, and data in the marketing space. He first wrote about marketing technology as editor of Haymarket’s The Hub, a dedicated marketing tech website, which subsequently became a channel on the established direct marketing brand DMN. Kim joined DMN proper in 2016, as a senior editor, becoming Executive Editor, then Editor-in-Chief a position he held until January 2020. Shortly thereafter he joined Third Door Media as Editorial Director at MarTech.
Kim was Associate Editor at a New York Times hyper-local news site, The Local: East Village, and has previously worked as an editor of an academic publication, and as a music journalist. He has written hundreds of New York restaurant reviews for a personal blog, and has been an occasional guest contributor to Eater.
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