Five takeaways from the huge US antitrust lawsuit against Apple

The US Department of Justice is suing Apple for “monopolizing smartphone markets” to help guarantee the iPhone’s continued success — to the detriment of consumers and third-party developers. The suit was filed on March 21st and will take a long time to play out. It touches on everything from iMessage lock-in and App Store developer fees to “super apps” and cloud gaming. If the government is successful, we could witness a sea change moment for the iPhone and Apple’s ecosystem at large.

Apple, as expected, is deeply critical of the DOJ’s antitrust filing. “This lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets,” said Apple spokesperson Fred Sainz. The company also said the legal battle sets “a dangerous precedent, empowering government to take a heavy hand in designing people’s technology.”

The iPhone is at the center of everything

With well over 1 billion units sold, the iPhone is Apple’s leading moneymaker. And the DOJ’s argument boils down to one central idea: Apple is doing everything it can to keep things that way and maintain the iPhone’s popularity. But the company has pushed into unfair territory and used underhanded tactics that give its own devices (like the Apple Watch) and services (Apple Pay) a distinct advantage over those of the competition, which cannot offer the same experience.

And the company’s exclusive software features — like the non-interoperable aspects of iMessage — make Android phones seem inferior in the eyes of many consumers, even when those drawbacks have everything to do with how Apple conducts business and very little to do with how companies like Samsung, Google, and others design and manufacture their own devices.

“Over many years, Apple has repeatedly responded to competitive threats by making it harder or more expensive for its users and developers to leave than by making it more attractive for them to stay,” the government wrote in the first paragraph of its complaint. Apple’s conduct, the Justice Department claims, has “locked in users and developers while protecting its profits.”

The US government is keenly aware that green bubbles are uncool

During Thursday’s press conference, US Attorney General Merrick Garland went off on Apple’s messaging strategy. “iPhone users perceive rival smartphones to be of lower quality,” he said, noting that conversations with Android users (green bubbles) lack encryption, result in subpar media sharing, and don’t include features like typing indicators.

Apple has said it plans to support RCS, a more modern messaging protocol, for improved cross-platform communication later this year. But even then, don’t expect those bubbles to change color. The green bubble stigma is a real thing — at least in the United States, where iMessage is so prevalent. And the DOJ says it’s a huge factor that contributes to iPhone lock-in.

The complaint includes a quote from Tim Cook at the 2022 Code Conference that made headlines at the time. “I can’t send my mom certain videos,” an audience member told Cook when complaining about the cross-platform messaging quagmire. “Buy your mom an iPhone,” Cook responded.

It just works… unless your smartwatch isn’t an Apple Watch

Another consumer-driven aspect of the DOJ lawsuit is the messy smartwatch situation on iOS. The Apple Watch offers easy setup, seamless compatibility, and deep integration with the iPhone and Apple’s ecosystem, whereas third-party watches are far more limited in the scope of features they’re able to offer. It’s fast and easy to respond to a text or email from Apple’s watch. Others? Less so.

The Justice Department alleges that Apple is using its wearable as yet another tool in its kit to ensure that people choose another iPhone whenever upgrade time rolls around — and not an Android device, where the Apple Watch would be useless.

(It should be noted that Wear OS devices from Samsung and Google no longer support the iPhone, either.)

This is about the future of apps

The EU might’ve led the way in forcing Apple to loosen its grip over the App Store, but the DOJ also sees a glaring problem with the fees that developers must pay — and the strict guidelines they must abide by — for their apps to remain available to millions of iPhone owners.

Apple has thrown up roadblocks to keep so-called “super apps” off the platform, according to the antitrust filing. And the company’s rules have made it impractical for Microsoft and other cloud gaming companies to launch their services in such a way that they’d be able to monetize those offerings. The EU’s DMA legislation has resulted in Apple changing some of those policies, but key players still aren’t satisfied.

“They definitely don’t go far enough to open up competition on the world’s largest gaming platform,” Microsoft Gaming CEO Phil Spencer recently told The Verge when addressing Apple’s plans to allow third-party app markets on the iPhone and make the App Store more “open” in the EU.

Don’t expect a resolution anytime soon

Apple’s fiery response makes it clear that the company has every intention of defending itself. We’re on day one of a lawsuit that’s sure to drag on long into the future. It took over three years for the government and Microsoft to reach a settlement in that high-profile antitrust case (and another four years for dissatisfied state attorneys general to run through the appeals courts). The stakes here are just as critical.

In the meantime, Apple will make major changes to the App Store framework in the EU and reduce messaging friction by supporting RCS. But to the DOJ, the damage has already been done — and those steps don’t absolve Apple of unfairly suppressing competition, being a thorn in the side of developers, and (supposedly) wielding its monopoly power to “extract more money” from anyone and everyone using an iPhone.