A somewhat complicated and touchy subject for Apple has long been its potential breaches of antitrust laws. And in recent years (especially 2021 and 2022), these behaviors have come to a head, leading to investigations and popular discussions on whether or not Apple’s behavior should be changed or punished.
While I’m not qualified to completely discuss what this means for Apple, we are going to take a straightforward look at what Apple has been accused of, why, and what it could mean for the tech giant.
Without further ado, let’s dive in!
- What are antitrust laws?
- Is Apple breaking antitrust laws?
- What will happen if regulators decide that Apple is breaking antitrust laws?
- What are your thoughts on Apple’s potential violation of antitrust laws?
What are antitrust laws?
If you’re like me, then you might not be completely familiar with what antitrust laws are. Knowing that, I’d like to kick things off with a simple definition.
A “trust” is an agreement or partnership between large companies that is designed to hamper the growth and success of smaller companies. For instance, say that Apple and Google agreed that they would both create their own type of USB connector that no one else could use. This would make it harder for other companies to compete with these larger companies in a way that most regulators deem unfair.
Another example would be if Microsoft and Apple both agreed to start pricing their computers much higher. Since they rule the computer marketplace, there would be little that other competitors or customers could do. Boycotting these devices is unrealistic and competitors can’t make similar calls.
The goal of antitrust laws is to prevent these sorts of parasitic partnerships from taking place. Although it’s worth noting that as time has passed, antitrust laws have also become an umbrella term for any regulation designed to prevent monopolistic behavior. So as far as I understand it, Apple doesn’t necessarily have to be working with another large company to engage in behaviors that would land it under an antitrust investigation.
In short, regulators, other companies, and customers are starting to be wary of Apple’s size and how it’s using that size against its competitors.
Is Apple breaking antitrust laws?
It’s not my place to determine whether Apple is breaking antitrust laws. However, what we can do is take a look at behaviors that could potentially be deemed as unfair under antitrust law. These are also common accusations that have been lobbed at Apple, so this is a lump of accusations as well as potentially problematic behaviors from the tech giant.
The App Store’s fees and rules
At the top of the list is the App Store. The App Store has long been a contested area for Apple, with major fights between Apple and companies like Epic Games taking place.
But what is it about the App Store that companies and developers have a problem with?
For one thing, it’s the fees that Apple takes from developers. Many have claimed that these fees are far too high, and there is no way to avoid these fees. It’s why you may have noticed that subscriptions to streaming services are more expensive on your iPhone than they are on the internet.
That’s because Apple takes a percentage cut from every App Store subscription. So Netflix makes less money when you subscribe through the App Store app rather than signing up on Netflix’s website.
Since the App Store is such a massive platform, there’s not much for Netflix and even indie developers to do. They’re left to face these fees or not have their apps on the App Store. This wouldn’t be as much of an issue if the App Store were a smaller platform, but given its size, this poses a debate over whether Apple should be allowed to take fees, and if so, how much.
Another reason that the App Store debate exists is that there is no other way to deploy an app on an iPhone. You can’t download apps on your iPhone without going through the App Store. This isn’t the case on devices like the MacBook, which allows you to download apps from the web, other app stores, or Apple’s own App Store.
In short, Apple has total control over who can create apps for the iPhone, and many believe that it’s misusing that control.
Imposing unfair conditions on carriers and suppliers
Another accusation that has come Apple’s has been tied to its treatment of carriers and suppliers, particularly in international markets. There have been reports that in countries like South Korea, Apple has imposed harsh and unfair rules on carriers.
These rules have supposedly included dictating that carriers buy a minimum number of iPhones rather than deciding how many they want to carry, forcing carriers to share the cost of warranty fulfillment, and having carriers pay for Apple to run their ads on local TV networks.
Not only are these potentially unfair conditions, but they also highlight how Apple uses its weight as a large company to push smaller companies around. The iPhone is such a popular item that these carriers can’t reasonably refuse to sell it, but without regulations, there’s little to prevent Apple from enforcing these sorts of rules.
Built-in stock apps
Another complaint lobbied at Apple (as well as others like Google and Microsoft) is Apple’s use of default apps. Apps like Notes, Safari, and Mail make it difficult for third-party apps to compete in a number of ways.
For instance, the sheer fact that these apps come pre-installed on devices means that many users are unlikely to ever give a third-party option a chance. This has the potential to limit the ability of third-party developers to compete with Apple’s pre-installed options.
Another way that default apps make it difficult for competitors is that they get built-in preference. For example, there was a long period of time where you couldn’t change which apps were considered your default apps. That meant even if you used Gmail more than you used Mail, iOS would still prioritize interactions with the Mail app over Gmail. The same went for browsers and other types of apps.
This has changed recently, but it can be argued that this has only changed due to pressure from antitrust discussions.
Walling off the Apple Ecosystem
Yet another reason that people suspect Apple may have gotten on the wrong side of antitrust laws is due to the high walls around its Apple Ecosystem. For those that don’t know, the Apple Ecosystem is a reference to the ways that Apple products interact with one another.
For example, having an iPhone and a Mac means that you can answer text messages and calls on both devices. And having an Apple HomePod (as opposed to a Google Home) means that your Apple Music playlists will be readily available and synced with Siri.
The problem with this is that it gives a strong incentive for customers to not purchase from competitors. And it makes it difficult for third parties (i.e., those making products who aren’t big tech companies) to compete for the attention of Apple customers.
In other words, when someone buys an Apple product, it’s hard for them to switch to another competitor’s products.
Favoring big companies over smaller developers
A more traditional contention with antitrust laws that Apple may have caused is favoring big companies over smaller developers. Specifically, doing so within the confines of the App Store.
Many believe that Apple may have or even might be showing favoritism to big name apps. One example includes Netflix, where users have noticed that Netflix’s App Store page has extra features and information when compared to smaller competitors.
If this is true, then this could land more squarely in the realm of antitrust laws. It would mean that Apple is giving larger companies (who already have a natural advantage) an even bigger advantage over their smaller competitors. This would be anticompetitive behavior and could spell trouble for Apple if true.
Limiting right to repair options
Another potentially monopolistic behavior from Apple is its ongoing pursuit of getting in the way of right to repair options. For those that don’t know, Right To Repair is a movement that claims consumers have the right to be able to fix their own devices or choose whichever third-party repair option they like.
While you can technically do this, Apple gets in your way in a number of ways. For one thing, each of its devices is put together in such a way that you need specialty tools to take it apart. And for the most part, the only way to get these tools is from Apple, and in the past, getting access to them through Apple was difficult.
Today, Apple has opened up some (still limited) options for purchasing tools and parts and downloading repair manuals. You still have to go through Apple’s approved channels since it doesn’t use readily available tools (a simple screwdriver can’t open your MacBook; you need a special screwdriver).
Apple has also been known to glue components of your MacBook or iPhone down, making them harder to repair, and sometimes parts aren’t replaceable at all. For a while, if you cracked the glass back of an iPhone, you had to live with it or replace the entire device.
Right To Repair is working to ensure that everyone not only has access to the tools and parts necessary to repair their own devices, but also to ensure that making repairs is as easy as possible. Apple’s obstinance in this area isn’t a good look in light of antitrust discussions.
Limiting options to first-party selections
Lastly, Apple has been known to limit customers’ options to first-party selections in a few key ways. One is through the Apple Ecosystem, as mentioned earlier. You can technically buy a third-party smartwatch, but it isn’t going to integrate with your iPhone in the same way that an Apple Watch will.
Another way that Apple limits customers’ options is by forcing third-parties to work with the tech company to sell their products or at least limiting their ability to compete otherwise.
For instance, you may have noticed in the past that not all cables designed to work with your Apple devices did work. Or you may have found that Apple uses a specific cable that no other company is allowed to use. Sometimes they even limit your ability to upgrade a device with only Apple parts. When buying upgrades for a Mac, for instance, you can’t purchase your own RAM. You have to use Apples RAM.
Again, these choices could potentially be considered antitrust violations, and it’s just another reason why the conversation around this subject has continued to grow.
What will happen if regulators decide that Apple is breaking antitrust laws?
Before we close out this post on antitrust laws and Apple, let’s take a look at what could potentially happen if Apple is ever found guilty of breaking these laws.
It’s important to note that this is purely speculation; I have no concrete idea what the consequences of this decision would be, nor do I have any concrete idea of whether Apple is truly breaking antitrust laws in the first place. This is a thought experiment more than anything else, based on claims from Apple and others.
iOS and macOS might change forever
The first thing that would be likely to change as a result of Apple being accused of breaking antitrust laws is that iOS and macOS would probably change for good.
We might see new options appear, such as third-party app stores. The iPhone App Store would work similar to how app stores work on Mac, where you can download apps from the internet, from Steam, from Epic Games, or from the official Mac App Store.
Additionally, certain features might be expanded on remove. For instance, features that only work between Apple devices currently might be expanded to work with non-Apple devices or they could be removed for good. In either case, users would likely find that iOS and macOS are more open platforms, more similar to the way that Windows or Linux work.
Apple users will have more options
Another change that could happen if it’s decided that Apple is breaking antitrust laws is that Apple users will have more options. If that sounds broad, it’s because it is.
Users might not be so locked into the Apple Ecosystem, making it easier to purchase third-party devices and services. As mentioned before, you might be able to integrate third-party smartwatches with your iPhone, make more apps default apps, and opt out of using certain stock apps altogether.
The same goes for repairing your devices. You might have more local services that can repair your devices, and cost of doing so might go down. Additionally, you might be able to purchase the tools to fix your devices from local superstores or even Amazon, making it easy to modify and work on your broken devices.
Apple might be split into different companies
A change that would impact Apple users less directly than it would Apple and its competitors is that Apple could be split into multiple companies. This is something that some tech companies have already done, namely Google.
Currently, Apple makes hardware, software, and software services, and it is debatable dominant in each of these areas. It could be argued that this gives Apple a large advantage over others. Think about how difficult it must be for Spotify to compete with Apple Music, let alone a startup.
If it were decided that Apple is in violation of antitrust laws, then regulators could push Apple to split into smaller companies. And if that were to happen, it’s likely that we would see Apple become three different companies. One that makes devices, one that makes software for those devices, and one that offers subscription services.
It’s hard to say exactly what this would mean for Apple and its users. Perhaps nothing would outwardly be different for users, or maybe things would be completely different. It would mean a lot of restructuring, which is difficult to predict. Regardless, it’s safe to say that the results would be very interesting.
New risks may plague iOS and macOS
The last thing that might happen if it’s decided that Apple is in violation of antitrust laws is that there may be new risks plaguing iOS and macOS, but especially iOS.
iOS is one of the most popular smartphone platforms, and yet it’s also remained one of the safest, which is no small feat. And to a large extent, this safety has been made possible due to Apple’s level of control over the platform. If Apple were to forced to give up that control, we might see new risks, threats, and malware emerge on Apple devices.
Again, this is a bit hard to anticipate, but it is something to be aware of. It’s also one of Apple’s primary defenses for keeping the current level of control it has. It claims that giving up a significant amount of that control could lead to unavoidable negative consequences for Apple users. Hopefully this isn’t true, but it’s probably not too unlikely.
What are your thoughts on Apple’s potential violation of antitrust laws?
And that’s it! That’s more or less everything you need to know about whether Apple is in violation of antitrust laws. While it’s not our place to make any hard claims on the matter, it does seem that Apple might be engaging in some practices that it should work to change in the future. The result would likely be a benefit to its users and competitors.
But what do you think?
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See you next time!