In March 2024, Attorney General Nessel and the U.S. Department of Justice sued Apple for monopolization of the U.S. smartphone market.[24] According to the lawsuit against Apple:
Apple reduces competition in the markets for performance smartphones and smartphones generally. It does this by delaying, degrading, or outright blocking technologies that would increase competition in the smartphone markets by decreasing barriers to switching to another smartphone, among other things. The suppressed technologies would provide a high-quality user experience on any smartphone, which would, in turn, require smartphones to compete on their merits.[25]
Nessel’s lawsuit against Apple raises similar issues to those in the Verizon vs. Trinko case. The U.S. Supreme Court held in that case that Verizon had no antitrust duty to assist its competitors or to provide them with easy access to its platform.[26] Thus, unless Nessel can convince the federal courts to overrule the standards set by the Supreme Court in the Trinko case, it seems unlikely that this lawsuit against Apple will be successful. In short, this lawsuit ignores the Supreme Court’s strong line of precedent finding that antitrust protects the competitive process, not individual competitors.
Apple also has a strong counterargument that their design decisions are motivated by satisfying customers. They are willing to pay a premium for the curated and streamlined experience the company provides and for the better system security. Apple will almost certainly argue that interfering with these decisions will harm its customers. In fact, during the years of litigation this case is expected to endure, Apple customers may be harmed if the company responds to the legal uncertainty by pulling back from competing as aggressively or reducing investments in new technologies.[*]
[*] Alden Abbott, the former general counsel to the U.S. Federal Trade Commission, provides a more detailed analysis of the flaws in the lawsuit against Apple. Alden Abbott, “US v. Apple Lawsuit Has Big Implications for Competition and Innovation” (Truth on the Market, March 22, 2024), https://perma.cc/ QVQ2-GPFJ.