OPINION:
Americans have become comfortably numb to Big Tech’s monopolistic behavior, but a recent flurry of efforts to rein it in and stand up for everyday consumers is finally gaining momentum. On the front lines is the company perhaps most overdue for scrutiny: Apple.
For too long, Apple has been given a pass from antitrust scrutiny despite maintaining a stranglehold on the iPhone, one of the most important platforms in modern life.
On an iPhone, Apple controls not only the device itself but also the camera, the operating system, all the apps that come preloaded on the device (including the internet browser, the weather and the news), and the App Store, which is the only place you can download third-party apps.
It is a level of control that monopolies of the past could only dream of.
The last time a company exerted this level of control over a digital platform, the federal government took action. Twenty-five years ago, in the landmark antitrust case against Microsoft, the federal government went to court to block a single company from tying the Windows operating system to the Internet Explorer browser, an anticompetitive tactic threatening the future of online innovation. That conduct infamously led to the company being compared to a baseball game in which it “owns all the bats and the field.”
Ironically, the court didn’t consider Apple a meaningful competitor to Microsoft. Today, of course, Apple’s dominance over the iPhone ecosystem is absolute.
Much has changed in America in the past quarter century, but our definition of monopolies should not, and neither should our commitment to protecting and promoting competition, a fair and open marketplace and the entrepreneurs and consumers who fuel our economy. What was anticompetitive 25 years ago is still anticompetitive today. The Sherman Act is more than 130 years old, and although the underlying technologies change, monopolization is still prohibited.
Fortunately, the government is once again stepping in to hold Big Tech accountable, and Apple just lost its bid to dismiss the Justice Department’s case challenging its smartphone monopoly.
Here’s what’s going on in that case and why you, as a consumer, should care:
• The Justice Department and 20 state attorneys general are suing Apple, alleging that the iPhone maker has illegally maintained its dominance in the smartphone market, particularly among high-end, “performance” phones, by blocking technologies that would make it easier for users and developers to leave the Apple ecosystem.
• Apple’s motion to dismiss was denied in full, clearing the way for the litigation to continue. According to the court’s ruling, the government has plausibly alleged that Apple imposed technical and contractual restrictions to suppress competition from cross-platform services, such as super apps, cloud gaming and third-party smartwatches. These tactics entrench user dependence on the iPhone and exclude rivals, not through innovation but through control.
• The judge found that the complaint states a strong case of monopolization and attempted monopolization. Although only five practices are highlighted, including Apple’s block on tap-to-pay rivals and its throttling of iMessage interoperability, they are just the tip of the iceberg.
I hear directly from app developers about the anti-consumer consequences of Apple’s abuse. Smartwatch makers are blocked from offering Apple’s iMessage services. Apps are forced to push higher prices on iPhone users to compensate for Apple’s extra fees. This has been going on for years. The Justice Department’s action is long overdue.
It’s not just the Justice Department attempting to hold Apple accountable and reverse some of the ensuing harms stemming from the company’s infamous “walled garden.” Rep. Kat Cammack has introduced the App Store Freedom Act, Sens. Marsha Blackburn, Richard Blumenthal, Mike Lee, Amy Klobuchar and Richard J. Durbin have reintroduced the Open App Markets Act, and Mr. Lee and Rep. John James have reintroduced the App Store Accountability Act.
Apple’s attempts to explain away its own anticompetitive, monopolistic behavior are full of holes. For instance, the company likes to say that “privacy” and “security” concerns undergird the need for the App Store to be the clearinghouse for all app downloads on the iPhone. Yet at the same time, you can visit any website and download applications for your MacBook. If Apple were consistent, the same privacy and security concerns would apply to your laptop and phone. However, Apple generates approximately $40 billion in annual cash flow from the App Store on the iPhone, which may distort its priorities.
Apple should take a hint from Microsoft in 2001 and change its practices before the legal and regulatory problems get even worse and break up its walled garden, by force.
• Brandon Kressin is the executive director of the Coalition for a Competitive Mobile Experience and the founding partner of Kressin Powers, a law firm specializing in antitrust litigation.
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