An Apple A Day Does Not Keep the DoJ Away: Exploring Apple’s Legal Woes 🍎

Hi there! 👋

The Department of Justice (DoJ) is leading the charge against Apple in a lawsuit to determine whether the tech titan is truly a monopolising ‘bad seed.’ This article will explore the story so far, including its implications on the tech industry and examine its potential impact on law firms.

From Brussels to Washington – Apple Faces the Hot Seat Once More…🇪🇺➡️🇺🇸

A quick detour across the pond to Brussels where, only recently, Apple was hit with a €1.8 billion fine for anti-competitive activities. Spotify led the charge there with a complaint which claimed that Apple had abused its dominant position in the market by imposing contractual restrictions on music streaming services. This prevented music streaming services from marketing the prices of subscriptions, and numerous other perks, to consumers in-app.

Moving back to American turf, Apple is once again subject to a second round of accusations of anti-competitive practices. Specifically, that Apple has constructed a smartphone monopoly by limiting the amount of choice consumers have to pursue other smartphone models and allegedly confining them within the walls of the iPhone ecosystem.

A Strongly Guarded Business Model or Market Share Hoarders? 🤔

With 234.6 million iPhones sold in 2023 alone, there is no denying that iPhones hold international popularity. According to Counterpoint Research, Apple possessed 64% of the US smartphone market share in the final quarter of 2023.

The issue with Apple taking up over half of the market share is that they obtain a dominant position in the smartphone sector, encroaching on the profitability of other manufacturers such as Samsung and Huawei.

The DoJ have claimed that Apple has implemented multiple anti-competitive strategies, including:

• Preventing non-iPhone users from accessing iMessage features such as conversation encryption and reaction emojis.

• Limiting the functionality of third-party smartwatches with the iPhone, thereby reducing consumer choice as they would be compelled to purchase a more expensive Apple Watch.

• Preventing iPhone users from accessing third-party digital wallet apps.

Apple is not taking these allegations lightly. As a major corporation, with its 2023 revenue reaching $382.2 billion, 52% of which came from iPhone sales, they are not backing down and disagrees with the findings of the DoJ.

A Wake-Up Call for the Tech Industry 📞

Big Tech companies are likely feeling pressure to avoid scrutiny from competition regulators. This heightened scrutiny encourages tech companies to reconsider their business strategy and assess whether they could be viewed as anti-competitive. Moreover, increased enforcement against anti-competitive behaviour creates opportunities for tech companies to challenge the dominance of industry giants like Apple.

A competitive tech industry is highly beneficial:

• Consumer Choice and Affordability: Consumers gain access to a wide array of products at various price points.

• Innovation: A healthy level of competition encourages companies to develop new products that stand out from other tech companies which attracts investment opportunities.

How could Law Firms be Affected? ⚖️

Apple’s legal woes are rooted in competition law but could impact various other practice areas within a typical firm.

• Litigation: Law firms may see a rise in cases where tech companies are found to be anti-competitive by regulators.

• Potential for Practice Growth and Increased Business: High-value companies may seek guidance on maintaining profitability whilst ensuring that they do not violate regulations.

• Creation of Legal Precedent: The outcome of this case may establish legal precedent to distinguish what counts as anti-competitive behaviour in the tech industry and its impact on consumers.

We look to see how US v. Apple pans out in the coming months…