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There are growing concerns that Apple could be facing an anti-trust investigation by the US Department of Justice.

Apple faces antitrust worries

What does antitrust mean?

In most jurisdictions around the world, it is illegal for large companies to band together to form agreements or “trusts” to behave in a particular way – for example, to all sell their products for the same high price. Laws designed to outlaw this type of behavior are called antitrust legislation.

However, the term is used more generally to refer to laws designed to prevent companies from engaging in any kind of anti-competitive action – that is, do anything that would tend to artificially distort competition within a market.

One common myth is that antitrust laws only apply to monopolies. This is very much not the case: They apply to any company large enough to have a dominant position in any market. As we shall see below, the definition of the word “market” can be crucial to deciding whether antitrust concerns arise.

Why is Apple facing antitrust investigations?

First, Apple is a very large company, and it would be very easy for a company of that size to commit antitrust violations, so it is to be expected that any massive corporation would be put under the antitrust microscope.

But in Apple’s case, there are some more specific concerns based on the company”s market dominance in particular areas. These are addressed below.

What are the antitrust concerns with Apple?

There are a number of different ones, in areas as diverse as ad tracking and Sign In With Apple, but here are three of the main ones.

The App Store

The biggest antitrust concern is the App Store.

Apple argues that it does not have a dominant position in this market, as it considers the relevant market to be either “smartphones” or “apps.” Since the company holds a minority share of the smartphone market in most of the countries in which it operates, it believes it cannot be considered to have a dominant position.

Competition regulators tend to take the view that the relevant market is “iOS apps,” and here Apple has a 100% monopoly on their sale and distribution. Edge cases aside, there is no way for a developer to bring an iOS app to market without selling it through the App Store.

Companies like Epic Games argue that they should be allowed to sell in-app purchases without Apple taking a cut of their revenue. The argument here is that Apple harms developers by taking part of their income, and consumers by forcing developers to charge more to make up for Apple’s cut. Apple, in response, says that it is perfectly normal for a company to take a cut of the sales it facilitates.

Default apps

Additionally, some companies accuse Apple of anti-competitive behavior by giving its own apps advantages over third-party ones.

One way that Apple does this, they say, is by pre-installing its own apps. For example, when the Apple Weather app is already installed on an iPhone when you buy it, then Apple’s own app has an obvious advantage over a competing app.

There is overlap here with the App Store concerns. For example, Apple Music and Spotify are competitors, but not only is Apple Music preinstalled, you can subscribe from within the app. If Spotify offered this same ability, it would have to pay Apple a 30% cut. Spotify can’t afford this, so users are forced to take a more long-winded route to subscription, which gives Apple Music an additional competitive advantage.

Relationships with carriers and retailers

Apple has also been found guilty in more than one country of exploiting a dominant position within the smartphone market to place undue demands on carriers and retailers.

Because the popularity of iPhones meant carriers had to sell them, Apple was able to dictate terms. In South Korea, for example, it was accused of imposing three onerous conditions on local carriers:

  • Carriers had to buy minimum quantities of each model, dictated by Apple
  • Carriers had to share the cost of warranty repairs or replacements
  • Carriers had to pay to run Apple’s own TV ads for the iPhone

Budget-focused carriers might, for example, want to buy only older and cheaper models, as that’s what their customers want, but Apple would force them to buy flagship models, too. And if a phone proved faulty, Apple wouldn’t just replace it, but would oblige carriers to meet some of the costs. Finally, although carriers had to pay the full cost of running iPhone ads on TV, they were only allowed to use Apple’s own ads, and the only thing they were permitted to change was adding their own logo to the final frame.

Additional areas of concern range from Apple Pay to a 4K video codec alliance!

What could happen to Apple as a result?

Antitrust outcomes will usually happen on a country-by-country basis, though there are exceptions. In Europe, for example, it is likely that the European Union will act as a bloc, and that any legislation applying to Apple will apply across all 27 member countries.

The worst-case scenario for Apple is for the US government to call for the breakup of the company. For example, it might be ruled that Apple Inc cannot run an App Store while also selling the iPhones on which those apps run. This is not a likely outcome, however.

A more likely scenario is a series of smaller changes. For example, Apple might be required to appoint an independent oversight board to carry out app reviews, or that it must allow Spotify to offer in-app subscriptions without taking a cut.

How is Apple responding?

In public, Apple’s stance is an outraged one, arguing that it does not have a dominant position and is doing nothing wrong. Behind closed doors, the company is aware that it either has to change some of its practices, or be forced to do so by law.

For example, while publicly declaring that a 30% commission on apps was industry standard, Apple made a massive U-turn by introducing the Small Business Program, with a 15% commission instead. Although touted as applying to the smallest developers, it in fact applies to 98% of them. It would be more accurate to say that the App Store now has a standard commission rate of 15%, with a higher 30% rate applying only to a tiny minority of companies.

The company has also quietly made a number of other changes in direct response to antitrust concerns, for example, opening up the Find My app to third-party accessories, and allowing people to change their default email app and web browser.

However, Apple is still sticking its head in the sand and hoping the issue will go away – when it absolutely won’t.

Apple wants you to know that the App Store is a ‘safe and trusted place’ ahead of EU changes

Apple wants you to know that the App Store is a 'safe and trusted place' ahead of EU changes

As part of the European Union’s Digital Markets Act (DMA) antitrust legislation, Apple will have to open up iOS to alternative app stores – and the company has released iOS 17.4 with support for what it calls App Marketplaces. But unsurprisingly, Apple wants people to know that the App Store is still the best place to download iPhone apps, and that’s exactly what it’s been telling its users.

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Mark Zuckerberg explains why there will be no Meta app store for iPhone in the EU

Meta Apple App Store

Many developers and tech companies didn’t react well to the changes proposed by Apple last month to comply with the European Union’s Digital Markets Act (DMA) antitrust legislation, and Mark Zuckerberg is on that team. The Meta CEO said on Thursday that he doubts developers will opt in to the new “onerous” terms set by Apple in the EU.

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Epic Games goes to court to accuse Apple of failing to comply with App Store ruling

App Store ruling headed back to court

While some may have thought the Epic Games versus Apple battle ended when the US Supreme Court decided the existing App Store ruling would stand, and it would not hear appeals from either side, it quickly became clear that this isn’t the case.

Epic Games has now followed through with its threat to contest Apple’s “bad-faith compliance plan” – which would see the company charge 27% commission on app sales made outside of its own App Store

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Apple’s third-party app store announcements guarantee the company will end up in court

Apple's third-party app store announcements | Apple logo against stone columns

Apple’s third-party app store announcements – in which the company set out the terms on which it will claim compliance with European antitrust law – was nothing if not confident.

The company’s announcement combined criticism of the law that required it, exceedingly tough requirements on any developer wanting to sell outside the App Store, and warnings intended to deter users from buying their apps anywhere else …

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Apple now lets developers submit ‘interoperability requests’ for iOS apps in the EU

App Store Connect Apple Developer

Apple on Thursday announced a series of changes coming to iOS in order to comply with the EU’s Digital Market Act antitrust legislation, which forces the company to let developers distribute their apps outside the App Store. In addition, Apple announced that developers will now be able to submit “interoperability requests” for iOS apps.

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Spotify in-app subscriptions previewed – but Apple is still determined to make it impossible

Spotify in-app subscriptions previewed

Spotify in-app subscriptions aren’t currently possible, thanks to Apple’s 30% cut – but the company has today previewed the experience it hopes to offer to European customers from March.

The streaming music company shows animations comparing the current in-app experience with the one it hopes to be able to offer once Europe’s Digital Markets Act (DMA) antitrust law comes into force on March 7 …

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Russian government says Apple paid $13 million antitrust fine over iOS App Store

Latest Apple antitrust case in Russia | App Store

Back in 2022, the Federal Anti-Monopoly Service (FAS) in Russia accused Apple of anti-competitive practices when it comes to the iOS App Store. Last year, the regulator decided to fine the U.S. company 1.2 billion rubles (which was $17.4 million at the time), and now the Russian government claims to have finally received the money from Apple.

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Unlink your Instagram, Facebook, and Messenger accounts – but only in Europe

Unlink your Instagram | Screenshot on smartphone resting on MacBook

Meta has announced a radical new move to comply with European antitrust requirements taking effect in March. The company will let you unlink your Instagram, Facebook, and Messenger accounts – as well as those for Facebook Marketplace and Facebook Gaming.

This means you’ll have the option of setting each up as a completely separate account, with no shared data between them …

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Apple Pay competitor apps coming – but regulators asking whether people want more

Apple Pay competitor apps coming | iPhone user making mobile wallet payment

iPhone users are set to see Apple Pay competitor apps being launched by banks and finance companies, after the Cupertino company gave in to European antitrust pressure to allow them access to the NFC chip.

But before regulators give the okay to the concessions Apple has offered, they are asking both finance companies and iPhone owners whether they want the company to offer more …

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Apple’s 27% commission tactic ‘reeks of greed and avarice’ – Gruber

Apple's 27% commission | 3D render of glass Apple logo

Daring Fireball’s John Gruber has said that Apple’s decision to charge 27% commission on app sales made outside the App Store “reeks of greed and avarice.”

He also backs the view I expressed yesterday that the iPhone maker is putting itself in the firing line of regulators and legislators, while a majority of 9to5Mac commenters appear to disagree …

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Apple demands $73M in Epic legal expenses

Epic legal expenses | Payment terminal

The Supreme Court’s decision not to hear appeals by either Apple or Epic Games means that the antitrust case is officially decided – and the iPhone maker is now demanding that the games company pay $73M of its $81M legal expenses.

The iPhone maker says that as there were ten issues at stake, and Apple won on nine of them, Epic should pay 90% of its legal bill …

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Apple’s 27% response to the Supreme Court decision is baiting antitrust regulators

Apple response to the Supreme Court | Judge's gavel on US flag

The US Supreme Court yesterday decided that the original ruling in the Epic Games case should stand – and Apple’s response to the antitrust ruling has been uncompromising, to put it politely.

The company’s announcement that it will allow external payments but still claim a 27% commission on sales made outside the App Store is effectively Apple giving the middle finger not just to Epic Games – which may be understandable – but also to the court which made the original ruling, and to antitrust regulators …

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Epic to contest Apple’s ‘bad-faith’ compliance plan following Supreme Court ruling on App Store

Tim Cook and Epic CEO Tim Sweeney

After a long legal dispute, the US Supreme Court ruled today that Apple will have to relax some of its App Store policies. More specifically, the company now has to let developers offer alternative payment methods. Still, Epic Games CEO Tim Sweeney isn’t happy with the final terms and says the company will contest Apple’s “bad-faith compliance plan.”

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Apple tells EU it has five different App Stores, not just one

Five different App Stores | App icons depicted as physical building blocks

While Apple is making behind-the-scenes preparations for allowing third-party app stores to comply with Europe’s antitrust requirements, the company is continuing to make arguments about why it shouldn’t have to.

Latest among these is the suggestion that the App Store shouldn’t be viewed as a ‘platform’ as the company actually operates five different app stores …

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US antitrust case against Apple’s App Store exclusivity is ‘firing on all cylinders’

US antitrust case against Apple's App Store | 3D representation of App Store logo

The US antitrust case against Apple’s App Store exclusivity is “firing on all cylinders” according to the head of the Department of Justice unit responsible for policing breaches of competition law.

The implication is that Apple may soon be forced to allow third-party app stores and/or sideloading in the US as well as in Europe …

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Japan prepares regulation requiring Apple to allow sideloading in iOS

Apple App Store sideloading iOS

As the Digital Markets Act antitrust law passed in the European Union, Apple has until March 2024 to let users in Europe install iOS apps outside the App Store. Although Apple has yet to say a word about how it will do this, regulators around the world have also been considering applying the same demands to the company – and Japan could be the next country to do so.

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Department of Justice investigating Apple blocking Beeper; FTC too

DOJ investigating Apple blocking Beeper | Police car

The Department of Justice (DOJ) is carrying out at least a preliminary antitrust investigation into Apple blocking Beeper, the unofficial app which gave Android users access to iMessage. The Federal Trade Commission (FTC) also appears to be “evaluating” Apple’s actions.

Today’s report follows a call for a DOJ investigation by a bipartisan group of senators, and Bleeper’s announcement that it has now given up any hope of keeping the app working …

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As Beeper Mini broken for most, lawmakers call for antitrust investigation

Beeper Mini broken, call for antitrust investigation | App shown on Android phone

Our sister site 9to5Google yesterday reported that Beeper Mini is now broken for most users – no longer allowing Android users to send and receive iMessages – after Apple took further steps to block the app.

A bipartisan group of lawmakers is now calling on the Department of Justice to look into whether Apple’s action against the app amounts to “potentially anticompetitive conduct” …

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With third-party app stores on the horizon, Apple is working on keeping developers loyal

Apple working to fight third-party app stores | PUBG game on iPhone

We’re likely less than six months away from the launch of third-party app stores on the iPhone – at least in Europe – and Apple’s plans for this appear to be advancing.

We’ve already noted that most consumers are unlikely to switch from the official App Store, unless they are given good reason to. But Apple also needs to keep developers loyal to the platform, and a seemingly small piece of news over the weekend likely revealed how the company intends to go about this …

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App Store anti-steering ban would be consumer-friendly, with little risk to Apple

App Store anti-steering ban | Steering wheel of Ford Mustang

We learned yesterday that the European Union looks set to impose an App Store anti-steering ban on Apple. That is, Apple would no longer be allowed to prevent Spotify and other music services from linking to their own company’s website for subscription sign-ups.

The ruling we’re expecting is a narrow one, in response to a complaint filed by Spotify almost four years ago now, and will likely only apply to streaming music services. But the principle is a sound one, and is unlikely to pose any great risk to Apple …

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