getting out of DoJ - Apple sued for being good?
It finally happened. Apple has been sued by the United States government for alleged customer lock-in and intentionally degrading the experience for users who want to switch between mobile operating systems.
“who the hell cares?”
Good question, imaginary rhetorical device. The answer might be you for reasons you may not realise yet.
On the one hand, most people are aware that Apple engages in some shenanigans when it comes to maximising revenue from their customers. In particular this idea that when a new version of the iPhone is available, all of a sudden older models start to run slow and lose battery more quickly, forcing users to upgrade. Now this has never actually been proven, but the readiness with which people believe it should tell you that Apple are the subject of heightened scrutiny and suspicion. The simple fact is that, as the worlds first trillion-dollar valued company, the eyes of the world are never far aware from the Cupertino-based tech leviathan. And now it appears America’s proud legal institutions have declared enough is enough and are suing Apple in the first major anti-trust action in tech since the 1990s (ask your parents).
Almost by definition, successful companies attract anti-trust scrutiny. For the uninitiated, anti-trust is a catch-all term for laws and regulations designed to promote fairness and even competition in a given market. If one company gains too much control over a market they can prevent other companies from competing, and once there is only one or a handful of companies left, those remaining can set their prices however they choose, leaving the consumer with no choice but to pay. You’re left with a monopoly, which is just as bad as the stupid board game that shares the name.
So what exactly are Apple being sued for? Well this is where it gets interesting, I promise. There are 5 major points to the Department of Justices case.
Disrupting Super-Apps
Blocking Cloud Streaming Apps
Making messaging between Android and iOS crap
Smart watches don’t work well between mobile operating systems
Blocking third-parties from developing an alternative to Apple Pay
Your first question, if you live in the West, is ‘what the hell is a Super App'?’ Well, fellow descendent of Athens, a Super App is one that encompasses multiple services like shopping, travel and communications. Sounds good, right? Hold your horses because that literally would create a whole new monopoly. We’ll wait for the rest of the world to figure that part out and move on.
If any of those other bullet points seem reasonable to you, then great but there’s a chicken-egg dilemma at play here which is worth examining. Apple’s defence against this filing is that it provides a unified, intuitive and, most importantly, secure approach to its digital ecosystem. Meaning that iOS users can go about their daily lives with a reasonable amount of confidence and assuredness that their data is safe, including their money. This led to the proliferation of Apple Pay because if consumers weren’t confident that the system was secure then they wouldn’t have been keen to adopt it. This led to greater flexibility in commerce, more chances for small businesses to thrive without the headache of cash or card management and ultimately paved the way for Google Pay (Android Pay, Google Wallet/whatever its called now) to join an established market. Bingo bongo, competition!
The upshot being that Apple makes good decisions, and understands its market better than anyone else. Users love the products, and buy into the ecosystem in larger and larger numbers every year. This cannot exclude them from anti-trust scrutiny, but the arguments provided so far by the DoJ do not seem sufficiently solid to justify this process. The accusations of monopolistic tendencies within the app store market seemed on much more solid ground and were worth pursuing, but this larger suit relating to the intersection of hardware, software and services seems destined to fall flat.
Consumers do have a choice; Google, Huawei and Samsung all offer access to alternative ecosystems. Its not Apple’s fault that none of them are as compelling. No reasonable person can allege that the Apple Watch working at its most feature complete with an iPhone is somehow harming Samsungs ability to make a decent smartwatch. Or that Google changing it’s messaging strategy 20 times in 10 years is the fault of iMessage. Capitalism is a terrible system, but if we are going to live under its yoke then we have to at least enforce the rules consistently, Apple should not be punished because it plays the game better than anyone else.
