President Biden’s Department of Justice dropped jaws today by announcing it is suing Apple, accusing the tech heavyweight of operating an “iPhone monopoly.” The antitrust lawsuit, which was joined by 16 states and the District of Columbia, marks the biggest challenge Apple has seen so far to its industry dominance—and that’s despite capping what could be called a world-historic past year of legal troubles, involving everyone from fellow tech companies to the European Union.
But rather than focusing on Apple’s narrow (mis)conduct with the App Store, as those others have, the Biden DOJ—which can now brag it’s sued all four of the world’s largest tech companies—unspools over 88 pages a more bleak set of worries that Apple could come to dominate nearly every entry point into modern digital life, all stemming from its vice grip on the smartphone market.
“The strategies Apple has employed to date are not the only ones Apple can use to achieve its anticompetitive and lucrative ends,” the lawsuit warns, referring back to the App Store abuse allegations, adding: “As technology evolves, Apple continues to evolve and shift its anticompetitive behavior to protect its monopoly power.”
As an example, the DOJ mentions Apple’s growing litany of subscription services that have spilled into, and therefore compete in, sectors spanning from Hollywood to the media, the wellness industry, and finance. The DOJ claims Apple is actively making the “moat around its smartphone monopoly” deeper and wider, so that in effect, iPhone owners can’t escape. In the agency’s eyes, Apple creates services such as Apple Pay, Apple TV, Apple Music, Apple News, Apple Arcade, and Apple Fitness, then uses its ability to write the rules for the App Store and other means to hobble those services’ competitors. The government argues that subscription services also control the manner in which the audience accesses third-party content, allowing Apple to piggyback on outsiders’ work “as the middleman or tollbooth operator.”
To really hammer home its point, the DOJ quotes an untactful line unearthed in Apple’s past internal communications. Fears aren’t about Apple having to compete in a market where consumers can “buy[] a [expletive] Android for 25 bux at a garage sale” yet still “have a solid cloud computing device.” They’re about needing a bigger moat to “maintain its monopoly through many other products and services.”
People have already noted Apple’s dominance in smartphones (61.3% of the U.S. market), tablets (57%), and apps ($1.1 trillion generated by App Store users in 2022, enough to be Earth’s 18th-largest economy). But the DOJ looks to highlight less-noted areas where Apple could widen that moat. One such area that the agency seemed to find particularly worrisome involves Apple CarPlay.
Apple has told automakers that to function in their vehicles, the next generation of CarPlay must be given permission to “take over all the screens, sensors, and gauges in a car, forcing users to experience driving as an iPhone-centric experience if they want to use any of the features provided by CarPlay,” the suit says. While Apple technically may no longer be building an electric vehicle—“CarPlay on steroids”—to rival Tesla’s, it is still going pedal to the metal on a carOS, using an iPhone-compatible info-tainment system as the wedge in. The U.S. government believes it sees a pattern here: “Apple leverages its iPhone user base to exert more power over its trading partners, including American carmakers, in future innovation.”
And losing control of its own dashboards begs new questions about the car industry’s autonomy. What if a driver crashed because their CarPlay glitched, and the vehicle’s interactive panels, all at the software’s mercy, went blank? Who’s responsible in that event? Apple isn’t likely to volunteer as legal tribute, which means automakers could find themselves arguing why they’re not liable for accidents caused by their own cars.
Accusations that Apple is breaking antitrust laws have revolved for years around the effects on App Store developers, from big players like Epic Games and Spotify down to the other 98% that earn less than $1 million per year. However, Apple’s bold CarPlay move may, in fact, have already spooked the American car industry—a group the federal government also must protect from anticompetitive conduct. In fact, GM surprised auto enthusiasts last year when it announced sudden plans to stop offering CarPlay in electric vehicles, beginning with the Chevy Blazer EV due out this upcoming fall. Android Auto, the Google rival platform, would also be phased out, and the move could have been read as an attempt to curb both companies’ growing appetite—only GM said it’s introducing a built-in info-tainment system codesigned by none other than Google. Apple’s CarPlay power grab may have simply given it the shivers.
And that concerns the government. “When one road is closed to Apple,” it says in the lawsuit, “Apple has demonstrated its ability to find new roads to the same or worse ends.” Less of a tech pioneer these days, the giant company now faces less competition, the Biden administration argues, “not because Apple makes its own products better but because it makes other products worse,” from news sites to video games and, potentially, your car.
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