AG Garland: ‘Monopolies Like Apple’s Threaten the Free and Fair Markets Upon Which Our Economy Is Based’

Garland Good morning Earlier ░░░░░░░░ the Department of Justice ░░░░░░░░ by 15 states and ░░░░░░░░ District of Columbia sued ░░░░░░░░ in the U S ░░░░░░░░ Count for the District ░░░░░░░░ New Jersey for violating ░░░░░░░░ 2 of the Sherman ░░░░░░░░ Act Over the last ░░░░░░░░ decades Apple has become ░░░░░░░░ of the most valuable ░░░░░░░░ companies in the world ░░░░░░░░ its net income exceeds ░░░░░░░░ individual Gross Domestic Product ░░░░░░░░ more than 100 countries ░░░░░░░░ is in large part ░░░░░░░░ to the success of ░░░░░░░░ iPhone Apple s signature ░░░░░░░░ product For over a ░░░░░░░░ iPhone sales have made ░░░░░░░░ a majority of Apple ░░░░░░░░ annual revenue Today Apple ░░░░░░░░ share of the U ░░░░░░░░ performance smartphone market exceeds ░░░░░░░░ percent and its share ░░░░░░░░ the entire U S ░░░░░░░░ market exceeds 65 percent ░░░░░░░░ charges as much as ░░░░░░░░ 1 600 for an ░░░░░░░░ But as our complaint ░░░░░░░░ Apple has maintained monopoly ░░░░░░░░ in the smartphone market ░░░░░░░░ simply by staying ahead ░░░░░░░░ the competition on the ░░░░░░░░ but by violating federal ░░░░░░░░ law Consumers should not ░░░░░░░░ to pay higher prices ░░░░░░░░ companies break the law ░░░░░░░░ allege that Apple has ░░░░░░░░ a strategy that relies ░░░░░░░░ exclusionary anticompetitive conduct that ░░░░░░░░ both consumers and developers ░░░░░░░░ consumers that has meant ░░░░░░░░ choices higher prices and ░░░░░░░░ lower quality smartphones apps ░░░░░░░░ accessories and less innovation ░░░░░░░░ Apple and its competitors ░░░░░░░░ developers that has meant ░░░░░░░░ forced to play by ░░░░░░░░ that insulate Apple from ░░░░░░░░ And as outlined in ░░░░░░░░ complaint we allege that ░░░░░░░░ has consolidated its monopoly ░░░░░░░░ not by making its ░░░░░░░░ products better but by ░░░░░░░░ other products worse Apple ░░░░░░░░ out its exclusionary anticompetitive ░░░░░░░░ in two principal ways ░░░░░░░░ Apple imposes contractual restrictions ░░░░░░░░ fees that limit the ░░░░░░░░ and functionality that developers ░░░░░░░░ offer iPhone users Second ░░░░░░░░ selectively restricts access to ░░░░░░░░ points of connection between ░░░░░░░░ party apps and the ░░░░░░░░ s operating system degrading ░░░░░░░░ functionality of non Apple ░░░░░░░░ and accessories As a ░░░░░░░░ for most of the ░░░░░░░░ 15 years Apple has ░░░░░░░░ a tax in the ░░░░░░░░ of a 30 percent ░░░░░░░░ on the price of ░░░░░░░░ app downloaded from the ░░░░░░░░ Store as well as ░░░░░░░░ in app purchases Apple ░░░░░░░░ able to command these ░░░░░░░░ from companies of all ░░░░░░░░ Apple has also suppressed ░░░░░░░░ emergence of programs like ░░░░░░░░ streaming apps including gaming ░░░░░░░░ as well as super ░░░░░░░░ that could reduce user ░░░░░░░░ on Apple s own ░░░░░░░░ system and expensive hardware ░░░░░░░░ as any iPhone user ░░░░░░░░ has ever seen a ░░░░░░░░ text message or received ░░░░░░░░ tiny grainy video can ░░░░░░░░ Apple s anticompetitive conduct ░░░░░░░░ includes making it more ░░░░░░░░ for iPhone users to ░░░░░░░░ with users of non ░░░░░░░░ products It does this ░░░░░░░░ diminishing the functionality of ░░░░░░░░ own messaging app and ░░░░░░░░ diminishing the functionality of ░░░░░░░░ party messaging apps By ░░░░░░░░ so Apple knowingly and ░░░░░░░░ degrades quality privacy and ░░░░░░░░ for its users For ░░░░░░░░ if an iPhone user ░░░░░░░░ a non iPhone user ░░░░░░░░ Apple Messages the text ░░░░░░░░ not only as a ░░░░░░░░ bubble but incorporates limited ░░░░░░░░ the conversation is not ░░░░░░░░ videos are pixelated and ░░░░░░░░ and users cannot edit ░░░░░░░░ or see typing indicators ░░░░░░░░ a result iPhone users ░░░░░░░░ rival smartphones as being ░░░░░░░░ quality because the experience ░░░░░░░░ messaging friends and family ░░░░░░░░ do not own iPhones ░░░░░░░░ worse even though Apple ░░░░░░░░ the one responsible for ░░░░░░░░ cross platform messaging And ░░░░░░░░ does so intentionally For ░░░░░░░░ in 2013 a senior ░░░░░░░░ at Apple explained that ░░░░░░░░ cross platform messaging in ░░░░░░░░ Messages would simply serve ░░░░░░░░ remove an obstacle to ░░░░░░░░ families giving their kids ░░░░░░░░ phones In 2022 Apple ░░░░░░░░ CEO was asked whether ░░░░░░░░ would fix iPhone to ░░░░░░░░ messaging The questioner added ░░░░░░░░ to make it personal ░░░░░░░░ I can t send ░░░░░░░░ mom certain videos Apple ░░░░░░░░ CEO responded Buy your ░░░░░░░░ an iPhone In addition ░░░░░░░░ selectively controlling app distribution ░░░░░░░░ creation we allege that ░░░░░░░░ is violating the law ░░░░░░░░ conditionally restricting developers access ░░░░░░░░ the interface needed to ░░░░░░░░ an app functional on ░░░░░░░░ Apple operating system For ░░░░░░░░ product like a smartwatch ░░░░░░░░ a digital wallet to ░░░░░░░░ useful to an iPhone ░░░░░░░░ it must be able ░░░░░░░░ communicate with the iPhone ░░░░░░░░ operating system But Apple ░░░░░░░░ barriers that make it ░░░░░░░░ difficult and expensive for ░░░░░░░░ users and developers to ░░░░░░░░ outside the Apple ecosystem ░░░░░░░░ it comes to smartwatches ░░░░░░░░ not only drives users ░░░░░░░░ purchase an Apple Watch ░░░░░░░░ is only compatible with ░░░░░░░░ iPhone it also uses ░░░░░░░░ technical and contractual controls ░░░░░░░░ make it harder for ░░░░░░░░ with an iPhone to ░░░░░░░░ a non Apple smartwatch ░░░░░░░░ when it comes to ░░░░░░░░ wallets Apple s exclusionary ░░░░░░░░ goes a step further ░░░░░░░░ wallets allow users to ░░░░░░░░ and use passes and ░░░░░░░░ in a single app ░░░░░░░░ credit cards personal identification ░░░░░░░░ tickets and car keys ░░░░░░░░ Wallet is Apple s ░░░░░░░░ digital wallet on the ░░░░░░░░ Apple actively encourages banks ░░░░░░░░ and other parties to ░░░░░░░░ in Apple Wallet but ░░░░░░░░ simultaneously exerts its monopoly ░░░░░░░░ to block these same ░░░░░░░░ from developing alternative payment ░░░░░░░░ and services for iPhone ░░░░░░░░ For example Apple has ░░░░░░░░ third party developers from ░░░░░░░░ competing digital wallets on ░░░░░░░░ iPhone that use what ░░░░░░░░ known as tap to ░░░░░░░░ functionality That is the ░░░░░░░░ that makes a digital ░░░░░░░░ well a wallet Instead ░░░░░░░░ forces those who want ░░░░░░░░ use the wallet function ░░░░░░░░ share personal information with ░░░░░░░░ even if they would ░░░░░░░░ to share that information ░░░░░░░░ with their bank medical ░░░░░░░░ or other trusted third ░░░░░░░░ When an iPhone user ░░░░░░░░ a credit or debit ░░░░░░░░ into Apple Wallet Apple ░░░░░░░░ itself in a process ░░░░░░░░ could otherwise occur directly ░░░░░░░░ the user and card ░░░░░░░░ This introduces an additional ░░░░░░░░ point of failure for ░░░░░░░░ privacy and security of ░░░░░░░░ users And that is ░░░░░░░░ one way in which ░░░░░░░░ is willing to make ░░░░░░░░ iPhone less secure and ░░░░░░░░ private in order to ░░░░░░░░ its monopoly power The ░░░░░░░░ Court defines monopoly power ░░░░░░░░ the power to control ░░░░░░░░ or exclude competition As ░░░░░░░░ out in our complaint ░░░░░░░░ has that power in ░░░░░░░░ smartphone market Now having ░░░░░░░░ power does not itself ░░░░░░░░ the antitrust laws but ░░░░░░░░ does when a firm ░░░░░░░░ or maintains monopoly power ░░░░░░░░ because it has a ░░░░░░░░ product or superior business ░░░░░░░░ but by engaging in ░░░░░░░░ conduct As set out ░░░░░░░░ our complaint Apple has ░░░░░░░░ its power not because ░░░░░░░░ its superiority but because ░░░░░░░░ its unlawful exclusionary behavior ░░░░░░░░ like Apple s threaten ░░░░░░░░ free and fair markets ░░░░░░░░ which our economy is ░░░░░░░░ They stifle innovation they ░░░░░░░░ producers and workers and ░░░░░░░░ increase costs for consumers ░░░░░░░░ left unchallenged Apple will ░░░░░░░░ continue to strengthen its ░░░░░░░░ monopoly But there s ░░░░░░░░ law for that The ░░░░░░░░ Department will vigorously enforce ░░░░░░░░ law Enforcing the law ░░░░░░░░ consumers from higher prices ░░░░░░░░ fewer choices That is ░░░░░░░░ Justice Department s legal ░░░░░░░░ that is what the ░░░░░░░░ people expect that is ░░░░░░░░ they deserve I am ░░░░░░░░ to the attorneys and ░░░░░░░░ of the Department s ░░░░░░░░ Division for their tireless ░░░░░░░░ on this case on ░░░░░░░░ of the American people ░░░░░░░░ will now turn the ░░░░░░░░ over to the deputy ░░░░░░░░ general.”