The United States Department of Justice (DOJ) has filed a significant antitrust lawsuit against Apple, accusing the technology behemoth of employing its app market regulations to illegally suppress competition and stifle innovation.
Filed on March 21 in a New Jersey federal court, and supported by 16 state attorney generals, the lawsuit claims that Apple maintains a monopolistic position in the smartphone market.
This, the DOJ contends, allows Apple to coerce developers into exclusively using its payment system, thereby locking in developers and users to its platform.
Central to the DOJ’s accusations are Apple’s App Store guidelines and developer agreements, which are criticized for their complex and variable rules.
These restrictions, according to the DOJ, enable Apple to charge excessive fees, hinder innovation, compromise user experience security, and limit competitive alternatives.
The lawsuit suggests that such practices notably restrict the functionality of crypto-based apps on iOS devices, impacting competition not only in the smartphone sector but also in financial services and other industries.
The DOJ specifically criticizes Apple for excluding alternative payment systems in a manner deemed anticompetitive and exclusionary.
Highlighting the controversial 30% commission, often referred to as the “Apple tax” on apps and in-app purchases, the complaint outlines how this policy and Apple’s fiat-only payment systems effectively block the integration of cryptocurrencies into apps, rendering it economically unfeasible for crypto-based applications to offer in-app purchases.
Additionally, the complaint notes that while Apple permits certain customers to distribute apps through custom app stores, it restricts iPhone users and developers from accessing these alternatives.
This restriction aims to protect Apple’s revenue from its App Store fees.
The DOJ accuses Apple of inconsistently enforcing its App Store rules to penalize developers leveraging technologies that could challenge Apple’s market dominance.
Specific examples include the disabling of functionalities in nonfungible token (NFT) marketplaces like OpenSea, and the social app Damus being forced to remove a Bitcoin tipping feature after Apple removed it from the App Store for circumventing its payment system.
Moreover, the DOJ alleges that Apple’s control extends to web apps, as it mandates the use of its WebKit engine for all iOS web browsers, further restricting competition.
In defense, an Apple spokesperson refuted the DOJ’s allegations, asserting the lawsuit is baseless and vowing to “vigorously defend against it.”
Apple argues that the lawsuit threatens to give the government undue influence over technology design, potentially compromising user privacy and security.
This defense comes as Apple faces pressure from regulations like the European Union’s Digital Markets Act, which mandates offering alternative browser engines and app stores, despite Apple’s concerns for user safety.
Following the lawsuit’s announcement, Apple’s stock price dropped by 4% to around $171, with no significant recovery in after-hours trading, as reported by Google Finance.
To submit a crypto press release (PR), send an email to sales@cryptointelligence.co.uk.
