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Apple stares down DOJ

Apple faced a high-profile antitrust challenge a few years ago by video game company Epic Games over the company’s app store rules, and the tech giant mostly prevailed against the challenge.

The wide-ranging claims posed in the government’s latest complaint, however, will put Apple’s rules to the test again over its control in the app market.

The complaint argues that Apple’s creation of the iPhone ecosystem has given the company dominance over the market for smartphones, which are now ubiquitous across U.S. households.

Apple is accused of creating services and products that only work best when used with Apple-run systems, using a “playbook” to maintain dominance across technologies ranging from its app store and messaging platform to smartwatches and digital wallets.

“It is the most significant challenge they’ve faced so far,” said William Kovacic, former chair of the Federal Trade Commission (FTC).

Kovacic said the Epic Games case dealt with “crucial issues” involving the Apple system — and gave a glimpse into possible Apple defenses and brought to light materials through the discovery process — but the case filed against Apple by the DOJ and 16 states attorneys general last week is more important.

“The scope is broader; the range of behavior addressed is more expansive. And in some ways, there’s greater significance to having the force of the government of the United States behind the case,” he said.

The DOJ complaint makes five major allegations about Apple’s conduct. Prosecutors argue the company blocked “super apps” that could transcend its own applications, suppressed mobile cloud streaming services, excluded cross-platform messaging apps, limited function of third-party smartwatches with Apple devices and hindered the use of third-party digital wallets.

Beyond the existing implementations of the alleged anticompetitive “playbook,” the complaint alleges Apple has “every incentive” to follow that same pattern in the future as it expands.

The wide-ranging complaint could lead to impacts across industries based on how the lawsuit plays out, said Henry Hauser, a lawyer at Perkins Coie. Hauser previously worked as a trial attorney in the DOJ’s antitrust division and as an attorney at the FTC’s technology enforcement division.

“This would affect so many different markets — financial services, media, entertainment, gaming, telecommunications,” Hauser said.

Apple has pushed back strongly on the allegations laid out in the DOJ’s complaint and argued it would in effect create less competition.

“If successful, [this lawsuit] would hinder our ability to create the kind of technology people expect from Apple—where hardware, software, and services intersect,” Apple said in a statement.

Read more in a full report at TheHill.com. 

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