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The United States Department of Justice (DOJ) appears to be on a mission against Apple. In an expansive antitrust lawsuit filed on Thursday morning, it accused the company of operating an illegal monopoly in the smartphone market. The lawsuit targets various Apple products and services, even making seemingly misleading claims against some of them. It also blames Apple for the failures of Amazon Fire Phone and Microsoft Windows Phone.
The DOJ says Apple caused the Amazon Fire Phone to fail, at least partially
The DOJ’s lawsuit against Apple, also signed by 16 state and district attorneys general, alleges that the company employed unfair and anticompetitive business practices to strengthen its smartphone market dominance. Among other things, it names CarPlay as one of the products that Apple uses to drive out competition and stifle innovation. The lawsuit says the new version of CarPlay can take over your car, which is a misleading statement.
However, there are some more ridiculous claims buried in the 88-page lawsuit. According to the DOJ, “many prominent, well-financed companies” tried and failed to enter the smartphone market because of Apple’s “entry barriers,” which include “strong network and scale effects and high switching costs and frictions.” Amazon, which launched its Fire Phone in 2014 could not profitably challenge the iPhone maker and exited the following year.
Microsoft also discontinued its mobile business in 2017 after failing to compete against Apple. HTC, which sold its smartphone business to Google in September 2017, and LG, which exited the smartphone market in 2021, are the other two examples cited by the DOJ in its official complaint. Barriers are so high that despite controlling the development of the Android OS, Google is a distant third to Apple and Samsung in the US smartphone market.
Blaming Apple for the Amazon Fire Phone failing is absurd, to say the least. It failed mostly of its own accord. Notably, Amazon used a forked version of Android, did not offer the Google Play Store, and sold the phone exclusively through AT&T. Microsoft’s Windows Phone failed because of a poor app ecosystem. HTC and LG also exited the smartphone industry after failing to fight in the competitive Android market.
Apple will challenge the DOJ’s claims
Apple says the Justice Department’s antitrust lawsuit is “wrong on the facts and the law.” Sure enough, it can’t be blamed for the mistakes of other companies. Many companies have entered the smartphone market and succeeded over the past decade. Some of them also carved out a market for themselves in the US, including OnePlus. The Cupertino-based iPhone maker plans to “vigorously” defend itself against the lawsuit.
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