Read the rest of Sundays Gurman’s Power On Newsletter then discuss
With its lawsuit against Apple, the Justice Department focuses on outdated issues and irrelevant points, missing an opportunity to address more pressing concerns. Also: Why the company is talking to generative AI partners; Sonos readies a fresh Roam speaker; and Apple prepares a wide rollout of...
www.bloomberg.com
Apple also hasn’t been one to welcome openness or competition. It refused to bring its iMessage app to Android phones and only agreed to adopt the cross-platform RCS messaging system under mounting pressure. Apple makes developers use its in-app purchase system, shuns cloud-gaming services and has been reluctant to open up its tap-to-pay chip to outside apps — all because it wants to protect its kingdom from rivals.
That’s provided the US Department of Justice with plenty of fodder for its antitrust lawsuit, which was
filed on Thursday. But the case relies mostly on outdated arguments and cites problems that Apple is already resolving. It even levels the dubious claim that Apple makes its products worse in order to harm rivals. (The DOJ also takes credit for Apple’s success, attributing the company’s rise to a Microsoft Corp. antitrust settlement in 2001.)
But perhaps the biggest flaw in the case: It does little to prove that Apple has harmed consumers.
The lawsuit claims that the main reason people hold on to their iPhones is because Apple makes it difficult to switch, not because people — I dunno — actually like their iPhones. The DOJ goes as far as to claim that Apple is trying to hurt automakers with a
new version of CarPlay that takes over more of the instrument panel. But that service is completely optional for both consumers and auto brands (and, let’s face it, not at risk of being widespread anytime soon).
The government even makes the fairly silly assertion that Apple’s control over the iPhone led to the very public failures of Amazon.com Inc. and Microsoft in smartphones. It argues that cloud-gaming apps were barred in order to sell pricier iPhone hardware and that Apple is responsible for the learning curve that makes it more difficult to switch to Android.
There are very real concerns with some of Apple’s practices. But the Justice Department spends less time on those issues, focusing instead on half-baked claims that suggest a lack of familiarity with modern technology.
Let’s quickly address the first three complaints, which have either been resolved or are at least a bit misleading:
- On super apps: In January, Apple expanded what super apps could do, making it easier for applications to have their own set of embedded mini apps. WeChat, meanwhile, has always been allowed. Super apps have failed in the US, not only because of Apple, but because they’ve never caught on culturally (other than Facebook to some extent). And here’s the great irony: Only huge companies can create super apps, and a super app by very definition hurts smaller developers. So, what are we even doing here?
- Also in January, Apple opened up streaming games so a developer can create a single app that offers access to a library of titles. For years, Apple allowed developers to offer games that stream from the cloud, but it barred companies like Microsoft and Nvidia Corp. from releasing a single app with access to their full cloud libraries. This was a real issue — one I first raised four years ago.
- Last year, Apple said that RCS, or rich communication services, will come to the iPhone as part of an update to iOS 18 at the end of 2024. That should usher in a new era of interoperability. It’s true, though, that Apple doesn’t allow third-party developers to send SMS messages and that the company will probably never enable iMessage on Android.
To be fair to the DOJ, Apple might not have made these changes if it weren’t for the fear of this very lawsuit and other regulatory efforts globally. And there’s little to stop the US government from going after Apple for past behavior, as the
European Union did in relation to streaming music services. The Justice Department lawyers also may be sitting on more information and evidence that will come to light as the case unfolds.
Now, on to the last two items, which are entirely reasonable:
- Regarding smartwatches, it’s true that the iPhone’s operating system works best with an Apple Watch. The company clearly does that to sell more watches and keep consumers locked into its product ecosystem (though Apple cites privacy and security reasons as well). Apple really should do more to support third-party devices on the iPhone, including watches. And this doesn’t seem like it would be a massive undertaking.
- The company also cites security and privacy reasons for failing to let outside firms use the near-field communication, or NFC, chip to build Apple Pay competitors. But it is more likely that the company wants to protect the royalty it gets from each Apple Pay transaction. Apple has already opened up NFC access in Europe, and I am told that engineering work to do so in the US is already underway.
At this juncture, it’s not clear what the US ultimately wants Apple to do — whether it’s paying a hefty fine, changing its practices or both. But regardless of the outcome, Apple is likely to continue to overhaul its software and move closer to the approach it’s been
forced to take in Europe.
Besides opening up the NFC chip to third parties in the US, Apple will likely broaden its support of outside smartwatches, app stores, in-app payment services, physical trackers, browser engines and voice assistants. And you can bet that Apple will have to make it easier to transfer data from an iPhone. The one big item that I think will never change, though, is bringing iMessage to Android. Apple is dead set against it.
