US Department of Justice to File Lawsuit
Meta, MS, X, and Match Group Join Anti-Apple Front
Apple's growth strategy of a closed ecosystem is now hindering the company in both the United States and the European Union (EU). The U.S. Department of Justice plans to file a lawsuit against Apple as early as the 21st (local time). In addition, Meta, Microsoft (MS), X (formerly Twitter), and others have joined Epic Games' anti-Apple front.
Bloomberg News, citing sources, reported that the U.S. Department of Justice is set to sue Apple for violating antitrust laws. The allegation is that the iPhone's closed ecosystem blocks competitors from accessing iPhone hardware and software.
U.S. Department of Justice Sues Apple... Controversy Over Closed Ecosystem
The specific issues the Department of Justice is concerned about have not been disclosed precisely. However, Apple has repeatedly faced complaints from the industry and users due to its closed ecosystem. The Department of Justice is reportedly focusing on the fact that iPhone users cannot use third-party contactless payment services other than Apple Pay.
Additionally, Tile, a smart location tracker company that attaches to keys and other items to prevent loss, has claimed that Apple restricted the use of third-party products on the iPhone while developing its own product (AirTag). There are also complaints in the market that it is difficult to connect smartwatches from other brands to the iPhone besides the Apple Watch, and that users of non-Apple smartphones cannot use Apple's messaging service iMessage.
Controversy Over Apple App Store Policies, Counterattack by Major Corporations
The anti-App Store front is also expanding. On this day, Meta, MS, X, and Match Group filed a petition with the U.S. District Court in Oakland, California, claiming that Apple's external payment policy for the App Store violates a court order. They argued, "Apple's new policy imposes new restrictions on application (app) developers, preventing the price competition encouraged by the court from being realized."
Earlier, Epic Games, the developer of the popular game 'Fortnite,' filed a lawsuit claiming that Apple's App Store system, which only allows in-app payments, violates antitrust laws, and the court ordered Apple to allow external payment systems. Subsequently, Apple allowed external payment links, but Epic Games criticized Apple for imposing a 27% commission, effectively making it impossible to use external links. Facebook, Instagram, X, Tinder, and other top U.S. app operators have joined Epic Games' protest.
EU's Stance on Apple's Closed Strategy
Apple has accelerated its growth by building a closed ecosystem. It strengthened connectivity among its devices such as the iPhone and iPad, making it difficult to use third-party devices, and only allowed apps to be downloaded through the App Store, generating commission revenue reaching 30%. However, now Apple is under attack from all sides due to its closed ecosystem strategy.
Apple has also fallen out of favor in the EU. The EU implemented the Digital Markets Act (DMA) on the 7th of this month to prevent gatekeeper platform companies from abusing their market dominance. Violations can result in fines of up to 10% of global annual revenue, increasing to 20% for repeated offenses. On the first day of DMA enforcement, the European Commission requested an explanation from Apple regarding Epic Games' claim that Apple blocked the installation of alternative app markets. Facing the risk of becoming the first company to violate the DMA, Apple surrendered on the 12th. Apple allowed alternative app markets and external app installations in the EU and lowered the App Store commission, which had been as high as 30%, to 17%.
However, the EU continues to keep a close watch on Apple. Margrethe Vestager, EU Executive Vice-President, stated in a foreign media interview the day before that she is deeply interested in investigating whether Apple's new commission structure undermines the purpose of the DMA. She also criticized Apple's claim that external app installations are unsafe as unwise.
Prior to the DMA, on the 4th, the EU fined Apple 1.84 billion euros (approximately 2.6731 trillion KRW) for abusing its dominance in the music streaming app market. This is the third-largest fine related to EU antitrust law violations and amounts to 0.5% of Apple's global revenue.
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