The giant Apple is attacked by the US Department of Justice, which accuses it of anti-competitive practices. The procedure aims for a monopoly on the smartphone market, centered on the famous iPhone.
Apple is in the middle of a storm in the United States. The Department of Justice has launched an antitrust action against the Apple brand, accused of holding a monopoly on the telephone market which harms consumers as well as developers and competitors. This action calls into question Apple’s closed ecosystem, which extends from the iPhone to the Apple Watch. It comes at a time when regulators around the world have the Cupertino company in their sights.
For American justice, the iPhone allows Apple to cultivate its monopoly
The ministry claims that Apple used its monopoly power to increase its valuation with the help of the iPhone. The sixteen prosecutors who joined the DOJ (the department) bluntly assert that Apple’s anticompetitive practices go beyond activities related to the iPhone and Apple Watch. They also include advertising offers, the browser and even FaceTime.
These multiple actions have led to a drop of more than almost 4% in Apple’s stock price in recent hours. Additionally, the DOJ alleges that Apple blocked cross-platform messaging apps and limited third-party wallet compatibility, disrupting App Store activity and cloud streaming services. We obviously think of the conflict between the behemoth and the European Commission and the EU, which requires it to open the App Store to competing companies like Microsoft or Epic Games.
The case represents a major challenge for Apple’s closed – and that’s a weak word – business model. It could threaten some of its most lucrative businesses or products, such as the iPhone, Apple Watch and its services. The lawsuit could even force Apple to make substantial changes to its business practices, which could have a significant impact on its revenue. We immediately understand better the net drop in the company’s shares.
Apple rails against the appeal, and accuses the courts of wanting to hinder its innovation
While the US Department of Justice insists on the need to hold Apple accountable for its monopolistic practices, the company defends itself and deplores accusations that threaten its innovation and its fundamental principles. The company claims that compliance with all regulations could restrict its ability to develop new products (hardware and software) and meet consumer expectations.
The action against Apple in any case follows years of investigations and previous litigation. It is being launched at a time when other large technology companies are also under fire from regulators. It is also part of a long tradition of fighting against monopolies in the technology sector, recalling in particular past actions against Microsoft.
The main question is whether the DOJ will be able to bring down Apple’s monopoly on the phone market, or whether this attempt will just be another doom and gloom.
Source : CNBC
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