Apple dismisses Microsoft monopoly comparisons | Tech Crunch

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A week later Finding itself on the business end of a landmark lawsuit from the United States Department of Justice, Apple is denying any parallels between itself and Microsoft in the 1990s. It's a comparison that US Attorney General Merrick Garland leaned heavily on in a filing last week.

United States v. Although parts of Microsoft Corp. were partially overturned, the Windows maker eventually had to modify some of its business practices that the government considered a monopoly. Garland and the 16 state attorneys general involved in the Apple lawsuit are seeking a similar outcome to curtail practices they believe have unfairly benefited the $2.65 trillion company.

“In 1998, Apple co-founder Steve Jobs criticized Microsoft's monopoly and 'dirty tactics' to target Apple in operating systems, which prompted the company to 'go to the Department of Justice' in hopes of 'fair play' by Microsoft,” the suit notes, largely suggesting Apple's hypocrisy. “But even then, Apple didn't face the same kinds of restrictions it imposes on third parties today; Apple users could use their iPod with a Windows computer, and Microsoft didn't charge Apple a 30% fee for every song downloaded from Apple's iTunes store. Similarly, when Apple brought the iPhone to market in 2007, the component Benefited from competition between manufacturers and wireless carriers.

For its part, Apple cited global iPhone numbers that were nowhere near the 90+% market share that Windows enjoyed before the turn of the millennium. Lawsuits like this are a rare opportunity to see how a big company can boast Some The devices they sold relative to the wider market. In fact, with the numbers hovering around 20% worldwide, it's hard to conclude that the company is dominating the competition the way Microsoft did a quarter of a century ago.

It's true that the iPhone is doing particularly well in the domestic market, which faces less direct competition from the many low-cost handsets dominated by India and China (the number one and two markets, respectively). However, Apple suggests that the DOJ's claim that its “share of the total US smartphone market exceeds 65%” is misleading because it refers to revenue rather than units sold. Of the latter, the company believes it commands less than half of its home market.

The difference between these figures comes down to unit cost. The DOJ suggests that Apple commands 70% of the “performance” smartphone market. Sure, it's true that Apple's devices mostly fall into the premium category, of which the company controls a large number in the states. The DOJ will have a hard time proving that this – in itself – is a monopoly.

That's why much of the 88-page complaint focuses on issues like Apple's tight control of the App Store, the Watch's inability to interface with Android devices, and the dreaded green bubbles. Taken together, the attorney general who contributed to the suit suggests that the evidence proves that the company is using its market position to coerce third parties and generally make life more difficult for Android developers.

Among the more interesting aspects of the suit is the claim that such actions led to the downfall of Amazon, HTC, LG and Microsoft's own efforts.

“Many prominent, well-financed companies have tried and failed to successfully enter relevant markets because of these entry barriers,” the suit states. “Past failures include Amazon (which launched its Fire mobile phone in 2014, but couldn't sustain the business profitably and exited the following year); Microsoft (which shut down its mobile business in 2017); HTC (which exited the market by selling its smartphone business to Google in September 2017); and LG (which exited the smartphone market in 2021). Today, Samsung and Google remain the only meaningful competitors in the US performance smartphone market. Although Google controls the development of the Android operating system, the barriers are high, with Google in third place behind Apple and Samsung.

Apple is effectively laughing that such market failures are nobody's fault but the companies behind them. Competitors consulted by the DOJ when putting together this case may have differing views on how directly the iPhone maker played a role in their inability to capture meaningful market share (and each of the above cases differ dramatically from one another), but in the case of the Fire Phone, at least, Amazon should point its finger squarely at it.

As to why companies like Huawei don't challenge Apple on its home turf, the US government should take a good, long look in the mirror.

The smart watch example is an interesting one. Cupertino's highly paid legal team also struggles to ensure Apple Watch owners aren't inconvenienced by its iOS exclusivity. But for its part, the company attributes this to technical limitations. Apple said it spent three years trying to create WatchOS/Android compatibility, only to give up citing security and privacy concerns.

Similarly, while Apple's recent announcement indicated support for RCS messages on the iPhone, the company insisted that the presence of stigmatized green bubbles was necessary to distinguish encryption and compatibility with specific messaging features.

The complaint cites internal emails from Apple executives suggesting that eliminating green bubbles would be bad for business.

Ultimately, Apple believes the lawsuit will try to turn iOS into Android. The company's 2008 Supreme Court case, Pacific Bell Co. v. Refers to Linkline Communications. The court unanimously ruled in favor of Pak Bell, saying the telecom company did not violate antitrust rules and could decide which companies it chose to work with.

When it comes time for Apple to make its case, the company is likely to argue that it's not Apple's job to support competitors.

“If successful, (the lawsuit) would hinder our ability to create the technology people expect from Apple, where hardware, software and services converge,” it said in a statement released shortly after the filing last week. “It also sets a dangerous precedent, empowering the government to take a heavy hand in designing people's technology. We believe this claim is wrong on facts and law, and we will vigorously argue against it.

To learn more about Apple's antitrust lawsuit, check here:

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