Written by Mike Scarcella
(Reuters) – The U.S. government's antitrust case against Apple builds on a watershed 1998 case that broke Microsoft's grip on desktop software, but it says it is incomplete in addressing smartphone competition. It has the potential to become a blueprint.
Today's iPhone market is very different from the near-monopoly enjoyed by Microsoft's Windows operating system two decades ago, and as a result, governments could face a tougher challenge in a showdown with Apple. said legal experts.
The Justice Department, along with 15 state governments, accused Apple of illegally monopolizing the smartphone market through restrictions on app developers that stifle choice and innovation, forcing consumers to pay higher prices.
Apple argued that the government was wrong on facts and law.
Legal experts say the government will need to prove that Apple's business practices were “chauvinistic” and harmed consumers by lowering the quality of competing products.
The government accused Apple of stifling technology that would increase competition among smartphones in five areas: so-called “super apps,” cloud streaming gaming apps, messaging apps, smart watches and digital wallets.
One of the examples cited by the government is familiar to anyone who sends text messages from an iPhone to an Android phone user. It's the dreaded “green bubble” that causes glitches like grainy photos sent via text. This does not apply to sending text messages between two mobile phones. Apple's iOS operating system.
Antitrust enforcement officials said Apple is rapidly expanding its influence and power in industries such as content creation and financial services.
By comparison, Microsoft was accused of abusing its market dominance to prevent users from freely installing software on computers using its operating system.
While this may sound similar to Apple's control of the app store, legal experts said there are important differences.
Legal experts say Apple can contract with whomever it wants and design products as it sees fit.
Douglas Ross, an antitrust scholar at the University of Washington School of Law, said a problem arises when companies with monopoly power take steps to reduce short-term profits in order to crowd out rivals over the long term.
“The basic premise that the Department of Justice has is that in order for rivals to be able to compete with Apple, Apple has to cooperate with its rivals,” Ross said, adding, “It's a monopoly. “This is a reversal of the ban,” he said.
market share
Microsoft controlled 95% of desktop operating systems in the 1990s, forcing them to open up their operating systems. In contrast, according to market analysis firm Canalys, Apple accounted for 55% of the North American smartphone market as of the end of September based on unit shipments, with the remainder mainly comprised of mobile phones equipped with Google's Android operating system. It is being
The Department of Justice is attempting to define this market as the U.S. smartphone market. Apple representatives said they intend to persuade the court to define the market as the global smartphone market.
According to Canalys data, Apple and rival Samsung Electronics each had a global market share of about 20% in 2023, but Apple slightly surpassed Samsung in terms of shipments.
Microsoft was “clearly a monopoly and had no effective competitors in the PC operating system space,” Ross said. Android, on the other hand, is “very popular, especially in other countries around the world, and is a very strong competitor to iOS.”
Ross predicted that the Justice Department would have a harder time winning against Apple than it did against Microsoft.
Some of these allegations have been mentioned in court before.
In a 2021 antitrust lawsuit brought by Fortnite creator Epic Games, a federal judge ruled after trial that Epic found Apple users “locked in” to their iPhones and tried to force them to switch to Android devices. It was determined that it was not possible to prove that the
Of course, government lawyers were aware of these differences when they brought the case.
Legal experts said this reflects the views within the Justice Department and the Biden administration's Federal Trade Commission regarding difficult litigation.
“They are willing to take on a very large litigation risk,” said Patrick McGahan, a lawyer for the plaintiffs. His office is involved in a lawsuit against Apple.
Washington litigation attorney Melissa Maxman said the Microsoft case changed the technology landscape and praised the government's case as a step toward increased competition in the smartphone market.
“If you open up the market to other competitors, prices will go down and quality will go up,” Maxman said. “That's exactly what was said at Microsoft. And it was true.”
(Reporting by Mike Scarcella; Editing by Tom Hulse and Jamie Freed)
