Apple’s Antitrust Law Headaches Won’t Go Away Any Time Soon

Man silhouette apple logo

Class-action lawsuits can feel a bit frivolous at times, particularly in consumer cases where there has been no true damage caused to the claimants. Often, they promise much at the beginning but end up delivering very little by the conclusion. So, it was probably with a shrug that Apple Inc executives greeted the news that a class action was being pursued against the company in the UK courts.

The suit alleges that Apple overcharges users by up to 30% in the App Store, particularly by limiting app developers to Apple’s own payment systems. The Guardian reports that the collective action is seeking to represent up to 20 millionpeople in the UK – around a third of the adult population.

As we said, Tim Martin and co will probably shrug at the news, and we wouldn’t be surprised if the story fails to make the mainstream media in future. But the class action hints at a wider truth: Apple, and Big Tech in general, has a huge headache with antitrust law (competition law), and there is a sense that those problems are just beginning.

The court battle with Epic Games has caught the eye, of course. Like the consumer lawsuit in the UK, Epic pointed to Apple “abusing its power over developers in the App Store” through its rules and requirements for payments. The Epic court case has been covered extensively for the Mac Observer, so we won’t go over old ground. But it’s worth remembering that – despite the popularity of games like Fortnite – Epic is but one company of thousands that deal with Apple and the App Store. If Epic is successful, more could follow.

Antitrust court cases are en vogue for Big Tech

Of course, Apple is not alone in this respect. In fact, all of those stock market darling FAAMG companies – Facebook, Apple, Amazon, Microsoft and Google – have become almost synonymous with antitrust lawsuits. Google, in particular, seems to find itself in the news for courtroom dramas these days than anything else.

However, to be fair to the Big Tech companies, these are not your normal antitrust violations. Context is needed, and that context comes within the ecosystems that these corporations have built. We don’t need to remind you that Apple has its own ‘ecosystem’, comprising everything from hardware to software, television to music downloads, email clients to payment systems.

Ask the average person in the street what they think, and they will probably think it’s completely normal for a company to push users towards its own products when they are on that company’s platform in the first place. You might take exception to the fact that Big Tech companies are too big, and that these ecosystems – by their very nature, anticompetitive – should not exist in the first place. But exist they do, and it’s a reality that Apple and others deal with. Why shouldn’t it look after its interests on an infrastructure that it has built?

Apple iPhone users can now have different default email apps

But Big Tech companies are waking up to the fact that openness can breed innovation. If we could look at one small example with the iOS 14 update, we could cite the ability for iPhone users to have another default email client instead of Mail. You might love Mail, of course, but there are many unique and innovative alternatives that you can now explore as a default email client. Check out this guide for more choices:

Getting back to Apple’s courtroom battles, there are other woes for the company. In April, the European Union charged it with abusing its position in the music streaming market, again due to payments in the App Store. This time the complaint was brought by Spotify, which claims that Apple has been gaining an unfair advantage by charging competitors.

It’s worth pointing out that Apple has been robust in its defence here. While being grilled by a Federal Judge, Tim Cook pointed out that, “only the people profiting in a major way must pay 30 {per cent)” at the App Store. So, that’s bad news for the big players like Epic and Spotfiy, and good for the small-time app developers. Cook’s testimony echoed talking points from other Apple statements, which were quick to point out the huge number (up to 84%) of free apps on the App Store, which Apple makes no profit from.

Apple CEO Tim Cook and Apple TV+

But this feels like it will not be settled in one trial with Epic games, nor in another with Spotify and the European Union. The Biden administration is clearly occupied with the (hopefully) resolving of the Covid-19 pandemic. But, as pointed out by CNBC in March, he has “loaded the administration with some of Big Tech’s most prominent critics”. Worse still, pursuing antitrust cases against Big Tech has one of the rarest things in contemporary US politics – bipartisan support. This headache will not go away any time soon.