US Department of Justice Takes Legal Action Against Apple for Unfair Practices Targeting Cryptocurrency Apps
The US Department of Justice (DOJ), along with 16 state and district attorneys general, has filed a civil antitrust lawsuit against Apple, accusing the tech giant of monopolizing or attempting to monopolize the smartphone market in violation of the Sherman Act’s Section 2.
Apple, a publicly traded company based in California, achieved significant revenues in fiscal year 2023, surpassing the gross domestic products of many countries.
The Lawsuit Alleges Apple’s Illegal Control of the Smartphone Market
According to the lawsuit filed in the US District Court for the District of New Jersey, Apple is accused of exerting illegal control over the smartphone market by imposing restrictive contracts on developers and limiting their access to essential resources. These actions allegedly hinder the development of cryptocurrency apps, products, and services that could reduce reliance on iPhones, promote compatibility with other platforms, and lower costs for consumers and developers.
The DOJ claims that Apple exploits its dominant position to extract more money from various parties, including consumers, developers, artists, and small businesses. In a press conference, US Attorney General Merrick Garland stated that Apple’s policies have unfairly eliminated alternative payment systems and highlighted the 30% fee it imposes on apps and in-app purchases, despite not being the app developer.
The Impact on Cryptocurrency Integration and App Development
This fee, combined with Apple’s exclusive support for fiat currencies in its payment systems, poses challenges for integrating cryptocurrencies into apps. Consequently, many crypto-based apps find it economically unfeasible to offer in-app purchases or utilize cryptocurrencies within the Apple ecosystem.
Government officials also accuse Apple of refusing to support cross-platform messaging apps, limiting third-party digital wallets and non-Apple smartwatches, and blocking mobile cloud streaming services, among other tactics, to maintain its dominance in the smartphone market.
Apple Faces Legal Challenges from the DOJ and EU Regulators
Apple’s practices also allegedly restrict iPhone users and developers from accessing alternative app stores that could compete with Apple’s fees. The DOJ argues that Apple selectively enforces its App Store rules and penalizes developers who use technologies that could disrupt its monopoly power.
Examples mentioned in the lawsuit include nonfungible token (NFT) marketplaces like OpenSea disabling certain features on their iOS apps due to the 30% fee. Additionally, a Bitcoin-friendly social app called Damus removed its BTC tipping feature after Apple delisted it for not using its in-app payments system.
Apple’s Control Extends to Web Apps and Digital Wallets
Apple’s control extends to web apps accessed through iOS devices, as the company requires all iOS web browsers to use its WebKit browser engine. The DOJ also accuses Apple of denying access to competing digital wallets and preventing developers from offering payment services to customers.
The Importance of Enforcing Antitrust Laws
The officials leading the case emphasize that no company should be exempt from the law, regardless of its size. They are determined to enforce antitrust laws to protect consumers and promote fair competition in the market.
Apple’s Response and Stock Market Reaction
In response to the lawsuit, an Apple spokesperson stated that the DOJ’s complaint is inaccurate and that they will vigorously defend against it. The company argues that the lawsuit could establish a dangerous precedent by granting the government excessive control over technology design.
Following the news of the lawsuit, Apple’s shares on NASDAQ fell by 4% to approximately $171, remaining stable in after-hours trading, according to Google Finance.
For more news about Apple, read:
– Apple Co-founder Steve Wozniak Emerges Victorious in Court Battle Against YouTube Concerning Bitcoin Scam Videos
– Security Vulnerability in Apple’s M-Series Chips Puts Mac Users’ Crypto Private Keys at Risk
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