Apple CEO Tim Cook
Spencer Platt | Getty Images
For a long time, the European Commission seemed to stand out from the US when it came to cracking down on technology giants with antitrust fines against Google and data protection regulations such as the General Data Protection Regulation.
When the EU’s competition policy chief Margrethe Vestager announced a preliminary finding on Friday that Apple had abused its dominant power in the diffusion of streaming music apps, the US finally seems ready to move in a similar direction move.
“The Commission’s argument on behalf of Spotify is the opposite of fair competition,” Apple said in a statement following Vestager’s announcement, referring to the music streaming company that raised the competition complaint. According to Apple, Spotify “wants to use all the advantages of the App Store, but does not have to pay for them” by speaking out against the commission of 15 to 30% for in-app payments for streaming apps.
Apple is not currently facing any antitrust charges from US government officials, and one such lawsuit may never materialize, despite the Justice Department reportedly gaining control of the company’s competitive practices in 2019. But even if the government refuses to press charges, recent actions in Congress, state legislatures, and private trials show that the sentiment of the American public towards Apple and the tech industry as a whole has changed significantly.
When the commission penalized its first record-breaking competition against Google in 2017, it wasn’t yet clear whether the US could be ready to move on from its once-cozy relationship with its booming tech industry. But that seemed to change in 2018 following the news of how Facebook user data was used by analytics firm Cambridge Analytica during the 2016 election and the growing question of how technology platforms can impact American democracy.
Now that Europe continues its investigation of Apple, the US doesn’t seem that far behind.
Here is where Apple is at risk of US antitrust action or regulation:
The DOJ has already filed a massive lawsuit against Google. So it could be some time before it decides to launch an investigation against Apple. According to a report in the Wall Street Journal, the DOJ’s antitrust division took over Apple’s regulatory agency in a 2019 agreement with the FTC. However, Google’s investigation appears to be a priority.
Still, then-Attorney General Bill Barr announced later that year that the DOJ would conduct a comprehensive antitrust review of big tech companies.
Any act of the DOJ or state executors would be in the form of a settlement or lawsuit that would place Apple’s fate in the hands of the courts.
The popular video game “Fortnite” from Epic Games is shown on a screen in this illustration on August 14, 2020.
Brendan McDermid | Reuters
Apple’s most immediate challenge in the US came from private companies bringing antitrust lawsuits against their business.
The most notable of these lawsuits comes from Fortnite maker Epic Games, which is due to begin the process on Monday. Epic filed its lawsuit on a PR blitz after contesting Apple’s in-app payment fee by promoting an alternative, cheaper way on its app to purchase character outfits direct from Epic, which goes against the Apple Violated the rules. This prompted Apple to remove Fortnite from its app store. Epic filed the lawsuit shortly thereafter, and Apple filed counterclaims against Epic for alleged breach of contract.
“Although Epic presents itself as a modern Robin Hood company, it is in reality a billion-dollar company that simply does not want to pay anything for the enormous value it gets from the App Store,” Apple said in a report to the district court for the Northern District of California in September.
Senator Amy Klobuchar, D-MN, asks questions during a hearing for the Senate Subcommittee on Privacy, Technology, and Law at the U.S. Capitol in Washington DC on April 27, 2021.
Tasos Katopodis | Pool | Reuters
Just last week, several app makers testified before the Senate’s Antitrust Subcommittee on the alleged anti-competitive damage they were exposed to from restrictions on Apple and Google app stores.
Representatives from Apple and Google told lawmakers that they only charge for the technology and labor needed to run the app stores, which has significantly reduced distribution costs for app developers over the years.
But witnesses from Tinder owner Match Group, manufacturer of item tracking devices Tile and Spotify have painted a different picture.
“We’re all scared,” said Jared Sine, Match Group’s chief legal officer, of the platforms’ widespread power over their businesses.
The witnesses discussed the seemingly arbitrary nature with which Apple allegedly enforces its App Store rules. Spotify’s legal officer alleged Apple had threatened retaliation on multiple occasions, and Tile’s top attorney said Apple denied access to a key feature that would improve the asset tracking product before it was used on Apple’s own competing gadget called the AirTag .
Tile said that while Apple is now making the feature available to third-party developers, access to it would mean handing a significant amount of data and control over to Apple. The Apple representative said its product is different from Tile’s and opening up the feature in question will encourage further competition in the area.
The senators at the hearing appeared receptive to app developers’ complaints, which build on previous allegations made before the House legislature. The House of Representatives’ Antitrust Subcommittee found in more than a year of investigation that Amazon, Apple, Facebook and Google all have monopoly power, and lawmakers are currently drafting bills to enable greater antitrust enforcement of the digital markets.