The United States government has filed a lawsuit against Apple, accusing the tech giant of monopolizing the iPhone ecosystem and crushing competition. In the lawsuit, the department alleges the company used its control of the iPhone to illegally limit competitors and consumer preferences, and in the process squashing innovation, BBC reports. Apple denies the claims and promises to fight the lawsuit.
Good People, like China, America maketh and America also controls. Like I wrote when the world was predicting that Facebook (yes, Meta) was in trouble and could be broken, positing that it would not happen, America will not do anything that will harm Apple in the age of Huawei.
If you decide to break Facebook apart, one part will grow and dominate others. This is possible because of the positive continuum of network effect where the biggest keeps getting bigger and also better. I explained that in a recent piece in the Harvard Business Review. You can regulate Facebook but another company will come to take over its position because in this sector, it is winner-takes-all. Yes, the best wins. Why? The scalable advantage improves with lower marginal cost.
This is my take: U.S. will not regulate Facebook or its web companies at the level many are expecting [I expect nothing to change except cosmetics reporting of violations] because it knows that Chinese competitors which are also well-funded will go after Facebook users across the globe. And even if U.S. regulates Facebook by breaking it, the best surviving part will grow to dominate over time because of network effect where the best gets better and bigger. We just have to agree that Facebook is an ICT utilities and I was very happy when my editors in Harvard allowed me to use that against the company. You negotiate with your utilities [ electricity, water] because you have no alternatives. That is where we are with Facebook.
Yes, no one will go after breaking Apple but this lawsuit could do one thing everyone wants to see in Apple: that the iPhone belongs to the village, and not just Apple Inc. Like in the Igbo Nation where kids are named “Nwaoha’ [a child to the whole village], the success of the iPhone does imply that Apple must look at it from that angle. The iPhone is a platform for commerce and Apple must allow markets to operate.
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Yes, if “uwa bu ahia” [the world is a marketplace], Apple must allow the iPhone, one of the main tools in the market, to operate a lot more freely!
Indeed, the restrictions on how to collect payment is unfair and causing so many problems for Apple creators and builders. I am in support of the US Government to get that freedom for the world, from Apple.
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The United States government has filed a lawsuit against Apple, accusing the tech giant of monopolizing the iPhone ecosystem and crushing competition. In the lawsuit, the department alleges the company used its control of the iPhone to illegally limit competitors and consumer… pic.twitter.com/6wWgybBqf1
— Ndubuisi Ekekwe (@ndekekwe) March 21, 2024
It accuses the California-based company of stopping competitors from offering rival services on the iPhone while also making it difficult for users to switch to alternative operating systems. In a statement, Attorney General Merrick Garland said the company “undermines apps, products and services that would otherwise make users less reliant on the iPhone”. The complaint lists a number of “anti-competitive” steps allegedly taken by the company, including blocking apps, suppressing mobile cloud streaming services, limiting third-party digital wallets and “diminishing the functionality” of smartwatches not made by the company.
At a news conference on Thursday, Mr Garland said Apple had “maintained its monopoly, not simply by staying ahead of the competition on the merits, but by violating federal antitrust laws”.
“Consumers should not have to pay higher prices because companies break the law,” Mr Garland said, accusing Apple of “locking its customers in” while at the same time “locking its competitors out”.
He pointed to the experience of iPhone users who message non-Apple smartphones, which he said led to “limited functionality” including non-encrypted communications and pixelated or grainy images. “Apple creates barriers that make it extremely difficult and expensive for both users and developers to venture outside the Apple ecosystem,” Mr Garland said.
If prosecutors succeed at trial they could force Apple to alter contracts, or possibly even make structural changes within the company, according to the complaint and officials at the press conference.
A spokesman for Apple, Fred Sainz said that the lawsuit was “wrong on the facts and the law” and that Apple would “vigorously defend against it”. “The lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets,” Mr Sainz said. “If successful, it would hinder our ability to create the kind of technology people expect from Apple.” It marks the third time Apple has been sued by the justice department since 2009, and is the first antitrust challenge against the company under President Joe Biden’s administration.
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Even the US government is fed up with Apple’s shenanigans. Apple still doesn’t understand that its iPhone is a platform, yet it holds tight and find unpleasant ways to stifle competition, in the name of security. The fight will continue until Apple behaves like a properly groomed big brother, for over a decade now it has been throwing tantrums.