The DOJ alleges that Apple blocks “super” apps, suppresses mobile cloud streaming services like Xbox Cloud Gaming, blocks cross-platform messaging apps and forces green bubbles, limits third-party digital wallets, and even limits how well third-party smartwatches work on its platforms. The Verge’s Alex Cranz explains the lawsuit.
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00:00 The DOJ is suing Apple.
00:02 The Department of Justice, joined by 15 states and the District of Columbia,
00:06 sued Apple in the U.S. District Court for the District of New Jersey
00:10 for violating Section 2 of the Sherman Antitrust Act.
00:13 The DOJ is going after Apple because it thinks Apple's created this monopoly in the smartphone market.
00:18 And it's got a couple of different examples of why it thinks it's done that.
00:22 It doesn't like the fact that when you have a smartwatch that isn't an Apple Watch,
00:26 the experience really sucks on an iPhone.
00:28 It doesn't like the fact that you can't use super apps like WeChat or KakaoTalk very well on an iPhone.
00:35 It doesn't like the fact that you can't do cloud streaming or cloud gaming on an iPhone.
00:40 It doesn't like the fact that you can't use any other digital wallets on the iPhone very well,
00:44 except for the Apple wallet, which means you have to give all your information to Apple,
00:48 even if you don't really want to.
00:50 And they do not like the green bubbles.
00:52 Specifically referencing this moment at Code 2022.
00:56 I can't send my mom certain videos or she can't send me certain videos.
00:59 And so we leave...
00:59 Buy your mom an iPhone.
01:01 (laughter)
01:03 This case is going to take a while to actually try in the courts.
01:06 And they compared it a lot to the Microsoft case back in the 90s.
01:09 Back at the time, Internet Explorer was kind of the dominant browser on the web.
01:13 If you were using a Windows machine, you pretty much were stuck using Internet Explorer.
01:17 And they did a lot of anti-competitive stuff to make sure you were stuck using Internet Explorer,
01:22 including trying to kill Netscape.
01:24 The DOJ feels that Apple's doing the same thing with a lot of new app developers,
01:28 and a lot of new applications, and a lot of new technology.
01:31 Apple has engaged in many of the same tactics that Microsoft used.
01:36 Apple's anti-competitive conduct discourages developers from offering new and innovative applications,
01:44 and makes it more difficult for consumers to switch to other smartphones.
01:49 When Microsoft lost its case, that meant it became a lot easier to develop new applications,
01:54 and to develop new protocols, and just create new technology to work on computers.
01:59 And to the point that even in this press briefing,
02:03 they alluded to the fact that Apple actually became much more successful because of Microsoft's case.
02:09 Approximately 25 years ago, the Department of Justice, State Attorneys General,
02:15 announced a case against a different platform monopolist.
02:19 Apple itself was a significant beneficiary of that case.
02:24 And the remedy paved the way for Apple to launch iTunes, iPod, and eventually the iPhone.
02:30 One of the big questions that came out of this press briefing was,
02:33 does this mean that Apple's not going to actually be able to check and see if bad apps are coming on the App Store?
02:39 Because that's a big reason why they maintain the App Store.
02:42 They say it makes it more private and more secure.
02:45 And Garland and the rest of the DOJ made it very, very clear that they're not going after that part of the App Store.
02:51 They're going specifically after the stuff that they call "exclusionary conduct."
02:54 Basically, the stuff where Apple makes it as anti-competitive as possible.
02:59 That means they're going after the App Store fees, not the App Store security.
03:02 For most of the past 15 years, Apple has collected a tax in the form of a 30% commission
03:09 on the price of any app downloaded from the App Store, as well as on in-app purchases.
03:16 Apple is able to command these fees from companies of all sizes.
03:21 If it's found that Apple did actually create a monopoly, then it's going to have to open things up.
03:27 That could mean less fees that you have to pay as a developer.
03:31 That could mean a lot more cool apps that have been really restricted on Apple devices.
03:37 When all of our friends in the rest of the world have been using them just fine on their Android ones.
03:42 It could also mean cheaper iPhones.
03:44 And it could even mean the end of the green bubble.
03:47 We reached out to Apple to get their take on being sued for being a monopoly, and this is what they had to say.
03:52 "At Apple, we innovate every day to make technology people love.
03:56 This lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets.
04:02 If successful, it would hinder our ability to create the kind of technology people expect from Apple,
04:06 where hardware, software, and services intersect.
04:09 We believe this lawsuit is wrong on the facts and the law, and we will vigorously defend against it."
04:15 This is what Apple has said every single time they're talking about anti-competitive stuff.
04:20 "We have vertical integration, so everything works seamlessly."
04:24 And that's true.
04:25 Apple does have one of the most seamless experiences you can get on a phone, or really any kind of gadget.
04:31 But that comes at a cost, and the DOJ thinks that cost is just too high.
04:36 They just dropped the suit today, and it's going to take a little while for that to actually get into the court system
04:40 and for the trial to actually happen.
04:42 We're not looking at a couple of days.
04:44 We're looking at months, probably even years, before this thing is resolved.
04:47 We're going to be covering this heavily on the site.
04:49 We've already got a ton of stories that are being queued up as we speak, so stay tuned.
04:54 This is going to be a wild one.