Apple Sued by U.S. Department of Justice, Says Lawsuit is 'Wrong'

[lotones]

"-Diminishing the Functionality of Non-Apple Smartwatches. Apple has limited the functionality of third-party smartwatches so that users who purchase the Apple Watch face substantial out-of-pocket costs if they do not keep buying iPhones."

This is the thing. Why should Apple be forced to make an inferior, less secure product just so it's compatible with Android, or any other app or OS? They shouldn't. Btw, is Samsung making their smartwatches completely iOS compatible? Yeah, didn't think so.

This whole case against Apple seems poorly thought out, and not based on facts nor law, but jealously and envy. It appears to me the DOJ has seen the EU dubiously scrape a couple billion off of Apple, and it wants some of those sweet. sweet Apple profits too.

What a waste of time, resources, and tax payer money.

 

[bcortens]

I'm with you, but you're almost asking for app stores to be utility services...and if we want to go there, let's start with wireless providers and ISP's.

I'd actually wholly support forcing telecoms into the role of pure utilities. I think that iOS has grown to a point where it should also be treated as a neutral platform which can only charge FRAND like access to the platform. You are correct though, they should really start with telecoms.

 

[TigerNike23]

Yes. Today you can select a default browser and search engine on any platform INCLUDING APPLE PLATFORMS thanks to the anti-trust action against Microsoft. There's even more history that you are ignorant of.

BTW Google pays Apple BILLIONS of dollars per year for Apple just to SET that default search engine to google. This should also be subject of an anti-trust action. Money talks.

You're clearly forgetting how things worked. DOJ won, but Microsoft appealed. Bush took over in January 2001 and had DOJ settle in September.

Microsoft was never broken up. Internet Explorer never got decoupled from Windows XP/2000/Me/98/95.

 

[Iconoclysm]

None of the examples cited is like that though. From what I read, the DoJ alleges that Apple would have the ability to open those APIs and features to third-parties if they wanted to, thus enabling said third-parties to implement the same functionality the Apple Watch is currently able to offer.

Yes, one of them being that the watch and the phone stay connected when bluetooth is turned off is an example. Another related to imessage being what keeps the phone and watch in sync with different numbers.

 

[bsolar]

I get the impression that the DOJ is not looking for reasonable solutions and that Apple will have to fight back just as unreasonably.

The stated position of the parties is almost always extreme in those cases, but this doesn't mean a settlement is off the table.

If the case is tried and it comes down to a court of law to decide, one of the party is going to lose which is going to be a disaster for them no matter who they are. For the DoJ would be a political disaster and for Apple it would significantly affect their most important product.

With a settlement both parties could bring home some measure of success and depending on the kind of concessions made it might hurt much less than being defeated in court.

 

[Jumpthesnark]

Perhaps Apple and its employees need to rethink which political party has it out for them, as was made abundantly clear this morning.

Based on a DOJ investigation that was started by the other guy, from a different political party?

<sureJan.gif>

 

[VulchR]

I remember trying to get apps for my Nokia smart phone before the iPhone was released. Life was a nightmare pre-iPhone and App Store. Every time I think about adding applications outside of the Apple ecosystem for anything I have an extra layer of FUD and concern about security.

Down with big government stepping in where they do not belong. Next they will decide the App Store should be a federally run entity and totally jam things up. Jerks.

The last sentence is a little extreme, but I agree otherwise.

 

[bsolar]

Yes, one of them being that the watch and the phone stay connected when bluetooth is turned off is an example. Another related to imessage being what keeps the phone and watch in sync with different numbers.

All of these features have no technical reason to be unavailable to third-party smartwatches.

 

[StrongArmmed]

Eyeopener for many people here. DOJ addresses this and I think the 30% cut will go away if DOJ wins the case.

Wording from the suit.

"When developers imagine a new product or service for iPhone consumers, Apple demands up to 30 percent of the price of an app whose content, product, or service it did not create. Then when a consumer wants to buy some additional service within that app, Apple extracts up to another 30 percent, again for a service Apple does not create or develop. When customers buy a coffee or pay for groceries, Apple charges a fee for every “tap-to-pay” transaction, imposing its own form of an interchange fee on banks and a significant new cost for using credit cards. When users run an internet search, Google gives Apple a significant cut of the advertising revenue that an iPhone user’s searches generate."

So, the DOJ and attorneys of 17 states believe that Apple's behavior is rent-seeking.

What the DOJ thinks is rent-seeking, is to a producer a reasonable recoup of expenses entailed in providing a service. I think the DOJ is going to have a hard time proving the commission is abusive and a payment that exceeds the costs involved in providing the resources for production. Frankly I'm not sure the DOJ even knows or understands the costs in providing the App Store infrastructure, dev tools, hosting, technical infrastructure, marketing, etc.

 

[michaelsviews]

There platform there rules, don't like it Oh well...
Sure there's allot things people don't like about Apple but you do have choices
Something else is brewing

 

[visualseed]

Yes. Today you can select a default browser and search engine on any platform INCLUDING APPLE PLATFORMS thanks to the anti-trust action against Microsoft. There's even more history that you are ignorant of.

BTW Google pays Apple BILLIONS of dollars per year for Apple just to SET that default search engine to google. This should also be subject of an anti-trust action. Money talks.

Wrong. The government dropped their browser-in claim on appeal and the settlement Microsoft agreed to was so limited it only applied to OS-level access to APIs, not higher-level APIs more useful for software developers. The browser choice requirement was a EU thing and it really didn't change much of anything because user choice was not the driving force for browser and search engine dominance.

Unless memory fails you, IE was the de facto standard browser for nearly a decade and a half after this settlement and the settlement gave Microsoft "a special antitrust immunity to license Windows and other 'platform software' under contractual terms that destroy freedom of competition."

 

[Iconoclysm]

"People choose us because we illegally abuse our competition, Your Honor!"View attachment 2361471

A walled garden isn't illegal.

 

[gnipgnop]

The DOJ is basing the lawsuit on Section 2 of the Sherman Act. Section 2 is specifically about protecting the competitive process rather than on protecting competitors. So harm to specific competitors isn't really enough to prove anything under Section 2.

"Firms with ill-gotten monopoly power can inflict on consumers higher prices, reduced output, and poorer quality goods or services.(48) Additionally, in certain circumstances, the existence of a monopoly can stymie innovation."

Competition And Monopoly: Single-Firm Conduct Under Section 2 Of The Sherman Act : Chapter 1

This is archived content from the U.S. Department of Justice website. The information here may be outdated and links may no longer function. Please contact webmaster@usdoj.gov if you have any questions about the archive site.

www.justice.gov

That bolded section is what the DOJ has to try and prove in court.

 

[Beautyspin]

What the DOJ thinks is rent-seeking, is to a producer a reasonable recoup of expenses entailed in providing a service. I think the DOJ is going to have a hard time proving the commission is abusive and a payment that exceeds the costs involved in providing the resources for production. Frankly I'm not sure the DOJ even knows or understands the costs in providing the App Store infrastructure, dev tools, hosting, technical infrastructure, marketing, etc.

They must be confident, afterall they have been sitting on this for five years.

 

[erikkfi]

A walled garden isn't illegal.

Correct; the anticompetitive behavior described in the 88-page indictment is alleged to be illegal. The words "walled" and "garden" don't appear in it once.

 

[Iconoclysm]

You don't even understand the point of all this. Your comment confuses how the software industry evolved with who controlled the industry (which was no one). So your comment actually proves the anti-trust case agains Apple.

Here's why:

IBM created the original IBM PC. If IBM controlled the software for its platform all those stores would have been IBM "App Stores" and we all would still be shopping there. IBM probably had the money to try this at the time so it's not as far fetched as you might think...

And of course (you'll love this one) if Apple opened such physical stores to compete with IBM at the time they never would have survived.

The only silver lining would be Microsoft also would have never survived.

Oh I understand the point of all of this. To even suggest that I don't is absolutely absurd. And your assumption/suggestion that I would be particularly incensed by IBM obliterating Apple shows a bias here, you're not listening because you confuse the motivation of the discussion.

If you think Microsoft wouldn't have survived because they had to give up 30% of revenue to IBM you're crazy. They might not have been able to buy every competitor they ever had though, because they too could have survived better in that environment.

Yes, the App Store and its relationship with developers must change. Claiming Apple is a monopoly and everything Apple ever does including its success is due to them being bad is not the way to fix that. It's hamfisted, it's objectively incorrect, and it makes the DOJ look like it doesn't really understand where the actual problem lies.

 

[chadamorrill]

Can someone help explain this to me?

If there was only one cellular provider and in order to have a mobile phone, I was forced to use that one provider and pay whatever it was I had to pay, then yes: it’s a monopoly.

Apple is one of a hundred cell phone manufacturers that I get to choose from. iOS is the OS on that phone, which makes sense to create a particular experience. If I don’t like the browser on the iPhone, I have the choice to go get a different phone with a different browser. This is not a monopoly. I have a choice here.

To me it’s like… I don’t love the seats in a Chevy, so I don’t buy Chevy’s. I can buy a Ford or Volvo or whatever with other seats that I like better, right? But the DOJ is not investigating Chevy for monopolistic tendencies. It’s a preference, right?

This literally doesn’t make sense to me, unless I’m severely missing something.

 

[gnipgnop]

What the DOJ thinks is rent-seeking, is to a producer a reasonable recoup of expenses entailed in providing a service.

Rent seeking seems like a strange approach, IMO. Sure, Apple didn't create the developer's app but they did create the phone hardware, the operating system and the App Store. Typically store owners are allowed to collect percentages of what is sold without it being deemed rent seeking. And Apple is doing more than just running a store. They had to create iOS/iPhone to even have a store.

Example: Steam didn't create Windows or all the various hardware from PC vendors that Windows runs on but they still collect a commission on games that are sold on Steam. Steam is just doing what a standard store owner would do which is not legally considered rent seeking.

 

[mcnallym]

It already happened on the locked iPhone, unfortunately.

Apple Security: Hacker Steals Over 6 Lakh Nude Pics From iCloud With Phishing Links

The perpetrator, Hao Kuo Chi, residing in La Puente has agreed to plead guilty to four felonies, including conspiracy to gain unauthorised access to a computer, according to court records.

www.indiatimes.com

iCloud not iPhone.

 

[Iconoclysm]

Correct; the anticompetitive behavior described in the 88-page indictment is alleged to be illegal. The words "walled" and "garden" don't appear in it once.

Yes, the easily shot down claims using examples from all over the industry do allege something to be illegal. The obvious misunderstandings and pointing in the wrong direction make the DOJ look very bad. There's a problem to fix here, they're just doing it all wrong.

 

[Beautyspin]

Apple claims DOJ has had to adjust its legal theories repeatedly​

From CNN's Brian Fung

Apple claims the Justice Department has had to modify the legal theories underpinning its case at least six times over the course of a four-year investigation, as other court rulings have emerged undercutting the government's case.
For example, on a call with reporters Thursday, Apple said an appeals court ruling last year finding that the company didn't violate US antitrust laws with its app store was a major blow to the DOJ.
Apple declined to say how it knew the Justice Department was shifting its arguments, citing the need for confidentiality.
Apple also claimed DOJ is trying to make iPhones work more like Android devices — which Apple customers do not want — and would turn the US government into a de facto technology designer.

US sues Apple in antitrust lawsuit: Live updates | CNN Business

The Justice Department has filed a blockbuster antitrust lawsuit against Apple on Thursday. Follow here for the latest.

www.cnn.com

I sure as heck don't want my iPhone to work more like Android. That is exactly why I bought an iPhone.

DOJ is smart. It is not gunning for Apple because it is a monopoly. It is gunning for it because it is preserving the monopoly using anticompetitive tactics. That is how they are going to get Apple.


Attorney General Merrick Garland cited a key principle of US antitrust law in today's news conference — one that is little-known but is a critical part of today's suit.

It is not illegal to hold a monopoly, Garland said.

That may sound counterintuitive in a case intended to fight monopolies. But under US antitrust law, it is only illegal when a monopolist resorts to anticompetitive tactics, or harms competition, in an effort to maintain that monopoly.

That is what the US Justice Department alleges Apple has done.

Among other things, the DOJ says Apple has used its control over iOS, the iPhone operating system, to block innovative new apps and cloud streaming services from the public; degrade how Android messages appear on iPhones; restrict how competing smartwatches can work with iPhones; and hinder rival payment solutions.

"We allege that Apple has consolidated its monopoly power, not by making its own products better, but by making other products worse," Garland said in a news conference.

Edit: for clarity

 

[Iconoclysm]

All of these features have no technical reason to be unavailable to third-party smartwatches.

Oh, and you say this based on what? The DOJ's technical expertise?

 

[visualseed]

That's what you see, which is fine but not the entire truth. Supermarkets offset the price of their products so that they make a profit *and* don't lose out on the payment processing fees. Same with many (not all) developers. You can lie to yourself and say you aren't paying or recognize that one way or the other you're paying more than if the fees weren't ever levied in the first place.

The flip side of that argument is that supermarkets want the competitive service advantages of offering their customers choice of payment types and payment networks but want to also maintain a competitive price advantage by wishing the fees required to participate in those networks did not exist.

 

[Harmonious Zen]

This admin hates capitalism.

That's the tension between government and private enterprise though. It won't stop with this admin.

 

[Iconoclysm]

DOJ is smart. It is gunning for Apple because it is a monopoly. It is gunning for it because it is preserving the monopoly using anticompetitive tactics. That is how they are going to get Apple.


Attorney General Merrick Garland cited a key principle of US antitrust law in today's news conference — one that is little-known but is a critical part of today's suit.

It is not illegal to hold a monopoly, Garland said.

That may sound counterintuitive in a case intended to fight monopolies. But under US antitrust law, it is only illegal when a monopolist resorts to anticompetitive tactics, or harms competition, in an effort to maintain that monopoly.

That is what the US Justice Department alleges Apple has done.

Among other things, the DOJ says Apple has used its control over iOS, the iPhone operating system, to block innovative new apps and cloud streaming services from the public; degrade how Android messages appear on iPhones; restrict how competing smartwatches can work with iPhones; and hinder rival payment solutions.

So do you agree that Apple somehow degraded SMS functionality?