ARI SHAPIRO, HOST:
While Apple is hoping consumers are excited about its latest iPhone, regulators are interested in the company for another reason. Both in the U.S. and overseas, regulators have accused big tech companies - Google, Amazon, Meta and Apple - of behaving like monopolies. Our colleagues over at The Indicator, Adrian Ma and Wailin Wong, look at the Justice Department's case against Apple.
WAILIN WONG, BYLINE: The DOJ accuses Apple of violating the Sherman Antitrust Act by, quote, "monopolizing smartphone markets," end quote. And how, supposedly, has it been doing that? Well, the iPhone has been around since 2007. And ever since it debuted, Apple has designed a whole suite of products and services to work with the iPhone. The classic metaphor for this carefully curated ecosystem is a walled garden.
ADRIAN MA, BYLINE: According to the DOJ's lawsuit, Apple has constructed its garden in such a way that it effectively locks users in. One example it gives has to do with smartwatches. So if you have an Apple Watch, it's designed to really only work with the iPhone. Conversely, if you have a smartwatch made by some other company, it can work with iPhone, but the DOJ asserts that Apple purposely limits how well those other watches work. Rebecca Haw Allensworth is a professor at Vanderbilt Law School, where she teaches antitrust law.
REBECCA HAW ALLENSWORTH: They're making it harder to switch. That idea that it's hard for consumers to switch fortifies Apple's monopoly power, says the government. And they have actually taken specific steps, according to the government, to make it harder for me to switch.
WONG: Another way Apple has allegedly made it harder for users to switch has to do with these things many iPhone users might not be familiar with - super apps and cloud-based gaming apps. Basically, super apps combine multiple functions into one app.
MA: The DOJ also points to these cloud-based gaming apps, which let users stream video games to their phones sort of like you would stream a movie. For both these kinds of apps, the DOJ says Apple has historically stifled their rollout in the App Store.
ALLENSWORTH: Consumers - if they really started living in the ecosystem of these clouds, the hardware becomes kind of irrelevant.
WONG: We reached out to Apple. They said, basically, the DOJ is wrong. They do have super apps like WeChat on iPhone, and when it comes to cloud gaming services, they do have them in the App Store, although it's worth noting that's a more recent development.
MA: Now, one more thing that the DOJ points to as evidence of Apple's allegedly anticompetitive conduct is the fact that text messaging between iPhones and Androids has always been a little wonky.
ALLENSWORTH: And the idea is that that's a artificial thing that Apple's doing.
WONG: One challenge will be proving that all these alleged tactics by Apple translate into actual monopoly power. According to the DOJ, iPhones account for about 65- to 70% of the U.S. smartphone market. Is that enough to say that Apple has a monopoly market share? Rebecca says it's debatable. Apple says that number is inflated because the DOJ is basing it on revenue rather than the number of phones. And from Apple's point of view, the better view of its market power is global sales. Worldwide, sales of Android phones far exceed iPhone sales, and iPhones only make up about 20% of smartphones.
MA: So both sides of this case are clearly digging in for some protracted litigation.
WONG: It could take a very long time before we see a final resolution. Wailin Wong.
MA: Adrian Ma, NPR News. Transcript provided by NPR, Copyright NPR.
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