by Kenneth Schrupp
Apple has filed a motion to dismiss a case from the United States Department of Justice claiming that it monopolizes the smartphone market using anticompetitive practices making it harder to switch to another phone. Antitrust experts say this case, if won by the DOJ, could set dangerous precedent by granting the government power to more easily define companies as monopolies and practices as monopolistic, and determine what companies must do or cannot do to avoid the label.
The United States Department of Justice and 16 Attorneys General — including California and the District of Columbia — filed a lawsuit in March alleging Apple illegally monopolizes the smartphone market, such as green boxes with “social stigma” for non-Apple text messages and Apple smartwatch incompatibility with other operating systems.
Apple’s lawyers now contend “it is simply not a viable theory of antitrust law for the Government to contend that Apple must open its own platform and its own technologies to third parties on terms and conditions that those parties prefer.”
The government suit details how Apple went from near bankruptcy to success after an antitrust lawsuit required that Microsoft, which had 95 percent market share of computer operating systems at the time, allow allow for easier installation and use of third-party software, such as iTunes, which created Apple’s first commercial success of the 21st century with the iPod.
Today, Apple has a 56 percent market share in the United States smartphone market and 27 percent globally, a fact that antitrust experts say demonstrates strong consumer preference but nothing like the monopoly enjoyed by Microsoft.
“If consumer preference is an antitrust violation then we have a real problem. If success is an antitrust violation we have a real problem,” said Robert Bork Jr., President of the Antitrust Education Project. “The government’s target here is not Apple but any company that satisfies consumer demand.”
Bork says that under the antitrust standard created by his father, jurist Robert Bork, and adopted nationwide, the fact that matters most is whether or not consumers are harmed, and that in the case of Apple, consumers have benefited.
The DOJ complaint claims “Apple deploys privacy and security justifications as an elastic shield that can stretch or contract to serve Apple’s financial and business interests,” but Bork notes it’s that Apple devices were not brought down by the recent Crowdstrike global cyber outage, and pointed to an article finding “ecosystem control and limited third-party exposure shielded its devices from the defect.”
Bork, whose public affairs company included Google as a client and whose foundation includes Amazon as a donor, said a ruling in favor of Apple would even benefit Apple’s competitors.
“On principle, it’s the kind of the case which is destructive to property rights and the consumer, Bork said. “It should be tossed out and other companies would benefit from that.”
Bork also used the case to contrast the American technology sector with Europe’s, saying, “In Europe, they don’t make anything, because they have all these rules. There are no Apples in Europe, there are no Googles in Europe, there are no Metas in Europe because their system is set up to hyper-regulate business activity, so all they do is issue fines and warnings — which is why some of these companies are beginning to pare back on the services they will offer in Europe.”
A similar antitrust case against Meta, formerly known as Facebook, was fully dismissed earlier this year.
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Kenneth Schrupp is the California reporter for The Center Square. His commentary and analysis have been published by Newsweek, RealClearPolitics, and the Pacific Research Institute.
Photo “iPhone” by Onur Binay.
