Thursday, May 26, 2022

Justice Dept., 34 states and Microsoft accuse Apple of stifling competition

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The Justice Department, Microsoft and a bipartisan group of attorneys in 34 states and the District of Columbia on Thursday accused Apple of stifling competition through its app store and filed a legal complaint against the company.

The three groups have filed third-party briefings in federal court considering Fortnite maker Epic Games’ ongoing legal battle against Apple.

Epic and other critics point out that Apple’s mandatory 15% to 30% commission from app distributors through its store is evidence that the company has an illegal monopoly.

A lower-level federal judge in California has previously rejected Epic’s argument that the Apple app store is a monopoly – a Justice Department decision on Thursday that was widely criticized for “legal errors that could undermine effective antitrust enforcement, especially the digital economy.”

The 35 attorney generals, in turn, wrote, “Apple’s actions have hurt and continue to hurt mobile app developers and millions of citizens.”

“Apple continues to distribute apps for iPhones and monopolize in-app payment solutions, stifle competition, and generate competitive profits in the nearly $ trillion-a-year smartphone industry,” the Utah and Utah-led states said. New York, Texas and Florida are also included.

The groups have filed third-party briefings in federal court considering Fortnite maker Epic Games’ ongoing legal battle against Apple.

Both the Department of Justice and Attorney Generals have argued that upholding a lower court decision in the Epic Games case would unfairly reduce the scope of U.S. antitrust law Sherman Act.

An appeals court ruling against Apple could lead to a multi-billion dollar gap in the company’s balance sheet. Apple earned $ 85.1 billion in revenue from the app store in 2021.

Microsoft, which has long urged Big Tech to take antitrust action against rivals, also issued a sharp third-party statement on Thursday.

“If Apple is allowed to switch between any company with online services and iPhone users, several sectors of the broader mobile economy will be safe from Apple interference and ultimate dominance,” Microsoft said. “Consumers and innovation are hurting – they really are already there.”

Microsoft
Microsoft claims that “consumers and innovation” have suffered as a result of Apple’s actions.

“The district court failed to pay enough attention to these huge competitive risks and, if approved on a large scale, could separate Apple from a serious antitrust investigation and exacerbate further misconduct,” the company added.

Microsoft’s fight against Apple came as the company faced its own antitrust scrutiny over its acquisition of Activision Blizzard, one of the largest technology deals in history, for $ 69 billion.

Apple shares rose 4 percent on Friday morning after the company reported strong fourth-quarter earnings. The iPhone manufacturer did not immediately respond to a request for comment.

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