The United States Department of Justice (DOJ) has lodged a comprehensive antitrust lawsuit against Apple, alleging that the company’s “monopoly” and regulations on the crypto apps market unlawfully stifled innovation and competition.
The complaint, filed on March 21 in a federal court in New Jersey and endorsed by sixteen state attorney generals, claimed that Apple’s smartphone market monopoly has been exploited to “lock in both developers and users on its platform through the use of its payment system.”
The DOJ alleged that Apple’s App Store guidelines and developer agreements enforce “a series of shapeshifting rules and restrictions” that enable the company to “impose higher fees, impede innovation, provide a degraded or less secure user experience, and stifle competitive alternatives.”
This may account for numerous crypto-based applications offering restricted functionality on iOS devices.
“Apple’s anticompetitive conduct not only limits competition in the smartphone market, but also reverberates through the industries that are affected by these restrictions, including financial services.”
The DOJ stated that Apple’s policies eliminated alternative payment systems “in exclusive and anticompetitive ways.”
Additionally, the report emphasized the 30% Apple tax, which pertains to in-app payments and applications that utilize “content, products, or services it did not originate.”
The incompatibility of the fee and Apple payment systems with fiat currencies has prevented using cryptocurrencies in apps or rendered it economically unfeasible for a cryptocurrency-based app to offer in-app purchases.
The DOJ stated that while Apple permits “certain enterprise and public sector customers” to offer their applications through custom app stores, iPhone users and developers are not allowed to access such alternative app stores because doing so would result in fee competition with the Big Tech player.
“Apple often enforces its App Store rules arbitrarily. And it frequently uses App Store rules and restrictions to penalize and restrict developers that take advantage of technologies that threaten to disrupt, disintermediate, compete with, or erode Apple’s monopoly power.”
As NFT sales are subject to a 30% fee, certain nonfungible token (NFT) marketplaces, including OpenSea, have disabled functionality on their iOS applications.
Apple delisted the Bitcoin-friendly social application Damus because a BTC tipping feature was removed. After all, the funds were not transmitted through the app’s in-app payments function, which Apple took a cut.
App Store-exempt web applications (web apps) remain under Apple’s jurisdiction, as the company mandates the use of its WebKit browser engine by all iOS web browsers.
According to the DOJ, Apple also prohibited developers from offering their own payment services to customers and denied access to competing digital wallets that offered a “vast array of enhanced features.”
A spokesperson for Apple stated to Cointelegraph that the DOJ’s complaint was “legally and factually incorrect, and we will defend it vigorously.”
Apple asserted that the lawsuit “established a perilous precedent” by potentially granting the government control over “the design of personal technology.”
The Digital Markets Act has compelled Apple to provide alternative browser engines, payment functions, and app stores in the European Union. Despite this, the company maintains an existing approval process, asserting that the new alternatives risk user privacy and security.
According to Google Finance, Apple (AAPL) shares fell 4% daily to around $171 and have remained steady in after-hours trading.
