A few thoughts on the DOJ’s antitrust case against Apple

Posted by Matt Birchler
— 7 min read

I’m no lawyer, and I’m not going to pretend I’m one, so don’t expect me to make any confident legal clams here. That said, I did read the 88-page suit (PDF) against Apple and I have some thoughts.

Oh, I also haven’t really looked at any other posts about what other people think of this case, so I have no idea if this is in line or not with the general consensus.

My wife’s reaction to the suit

My wife is technically adept, but it’s not a hobby for her, so I always find it interesting to hear her impressions on things that people in our corner of the internet feel very strongly about. Her overall impression is that it’s absurd Apple has absolute control over what people get to run on their iPhones. From that perspective, the cloud gaming ban seemed clearly malicious to her and the NFC restrictions seemed egregious. I did mention to her that some people think the iPhone is more like a Switch or PS5 than a computer so this absolute control is fine, and her exact response was, “people actually think that?”

She was also persuaded by the idea that Apple has taken their dominant position in smartphones and used that to unfairly take over the smartwatch market. “If you have an iPhone, you can’t even get anything besides an Apple Watch, can you?”

She didn’t know if the messaging thing was technically illegal, but she did say something interesting. She said green bubbles suck so much that it makes her never want to get an Android phone lest she be the green bubble person everyone else in the group thread is slightly angry at all the time. “It’s social suicide.”

Finally, she pulled up this Mean Girls GIF to explain how she thinks Apple will defend itself:

The weirdest part of the suit that stumbles into a cogent point

Back to me now, early in the suit there is a section about the U.S. vs. Microsoft suit in the late 90s and how Apple benefitted from that result.

A path-clearing antitrust enforcement case, brought by the United States and state attorneys general, against Microsoft opened the market and constrained Microsoft’s ability to prohibit companies like Apple from offering iTunes on Windows PCs.

What? Even at the height of Microsoft’s dominance in the 90s, there was no situation where they were in a position to block a competitor from releasing software on Windows. The case authors basically say just as much a little later:

In 1998, Apple co-founder Steve Jobs criticized Microsoft’s monopoly and “dirty tactics” in operating systems to target Apple, which prompted the company “to go to the Department of Justice” in hopes of getting Microsoft “to play fair.” But even at that time, Apple did not face the same types of restrictions it imposes on third parties today; Apple users could use their iPod with a Windows computer, and Microsoft did not charge Apple a 30 percent fee for each song downloaded from Apple’s iTunes store.

Exactly! Even at their most anti-competitive, Microsoft would allow iTunes on Windows and they would not have any mechanism to take 30% from all music sales because there simply wasn’t a concept of either of those at the time.

That said,this idea that general purpose computers have one gatekeeper with absolute control over what businesses are and aren’t allowed to exist, and that those allowed businesses owe 10-30% of their revenue to the gatekeeper is quite new, and honestly even in 2024 only applies to iOS and iPadOS. I’m not saying this is illegal, I’m just saying whatever headwinds Apple of the 90s would have made against Microsoft are nothing in comparison.

the iPod did not achieve widespread adoption until Apple developed a cross-platform version of the iPod and iTunes for Microsoft’s Windows operating system, at the time the dominant operating system for personal computers.

I do think it’s notable that (a) the iPod is what really pushed Apple off the brink and into the mainstream, setting them on the path that got them to be the biggest tech company in the world and (b) the iPod really took off once Windows users could buy it, and Apple would not have been able to do this if Microsoft had the same rules in place that Apple has over the iPhone and iPad.

This got me thinking about this line from a Chris Rock special many years ago:

There are no wealthy black or brown people in America. We got some rich ones, we don't got no fucking wealth. People go, 'what's the difference?' Here's the difference: Shaq is rich. The white man that signs his check is wealthy. I'm not talking about rich, I'm talking about wealth, ok?

Obviously the iPhone has allowed many companies to do well over the years, you’d have to be delusional to suggest otherwise. But I do think there is a case to be made that Apple has created a dominant computing platform in the U.S. that has made it impossible for someone else to become “wealthy” – to become the next Apple. “You can get rich building on the iPhone, but you’ll never be wealthy like us. Once you get close, we’ll either block you entirely or we’ll build our own version that has more capabilities than you have access to.”

I can already hear the emails starting, but we literally have examples of this we can point to. Do you want to be the next big smartwatch company? Go ahead, but you can hire the best developers and designers in the world, you’ll never be able to beat the Apple Watch because Apple doesn’t offer you the same access their product gets. See also cloud gaming services which were blocked for years pretty clearly because they competed with Apple Arcade and made it impossible for Apple to maintain the IAP revenue and control over what games get to run on people’s devices.

But is this illegal? Once again, I’m not a lawyer so I don’t know. What I will say is that Apple’s tight integration of hardware and software is an asset that makes their products better. It’s a reason that they are able to make things customers like so much. That said, the math changes once you get to a certain size.

The argument that consistently fell flat for me

There are two specific arguments in the case that really feel flat for me, and both of them revolve around requiring Apple to build their products for other platforms. They brought up that the Apple Watch ought to work with Android phones and that iMessage must come to Android as well.

Now I am all for Apple making it so that the Apple Watch and iMessage have capable competitors for iPhone users, but compelling Apple to make their products for other platforms feels wrong to me. The suit calls out the Beeper Mini situation from December as an example of something Apple ought to have allowed, and just like back then, I’m not convinced by this at all.

I found the arguments that Apple should let other messaging apps support sending SMS and RCS messages far more compelling way to create a more level playing field in the messaging space.

The alternate app store argument I hadn’t considered

Nor can developers rely on alternative app stores even though this would benefit developers and users. For example, developers cannot offer iPhone users an app store that only offers apps curated for use by children, which would provide opportunities to improve privacy, security, and child safety.

Game-focused stores and subscription stores like Setapp have been central to the conversation around what stores are possible in Europe thanks to the DMA, but this is a really good idea as well. How many parents have stories about their kid stumbling across objectionable stuff in the App Store or being on the hook for exorbitant in-app purchases that their kid was able to get because they figured out their parent’s password?

A lot of us in the enthusiast space think about alternate app stores as a way to let more stuff run on our devices, but there could also be a market for stores that let less stuff through. An app store for kids with more strict rules and no IAP could be good for some people as well.

There’s this idea spread by Apple’s marketing wing that Apple is the only company in the world trustworthy when it comes to app stores and payments, and that message has certainly been persuasive to many in the Apple ecosystem. If you believe that then we’re just going to see different on this.

Finally, the payments corner

Apple maintains complete control over how users make tap-to-pay payments with their iPhone.

Here we go, my profession comes into the mix! As the suit says, innovation in payments has been stifled because Apple exerts total control over how contactless payments work on the iPhone. Without getting into details, I will say that there are absolutely cases in the payments industry where innovative ideas were proposed but scrapped because you couldn’t do it on iPhones, and good luck releasing a payments feature that makes merchants buy an Android phone. Seriously, I’ve seen incidents where someone is really excited about an idea and then the air is sucked out of the room when the detail comes up that it would only work on Android.

In the U.S. at least, you gotta ship on iPhones otherwise it’s not worth doing.

Final thoughts

A lot of this feels yucky, and none of the things mentioned in the case (besides that weird iPod tangent) should be a surprise to anyone who has been following the Apple space for years. We’ve all blogged about these things and hoped Apple would change (or at least tweak) their ways in many of these areas. That said, it’s one thing for me to blog that Apple should change something because I think it would be better for consumers, it’s another thing when the DOJ says it’s illegal. I think the DOJ has an uphill battle in winning this case, but I do hope that it at least applies some pressure on Apple to continue loosening their grip on some things that have annoyed me for ages.