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There are growing concerns that Apple could be facing an anti-trust investigation by the US Department of Justice.

Apple faces antitrust worries

What does antitrust mean?

In most jurisdictions around the world, it is illegal for large companies to band together to form agreements or “trusts” to behave in a particular way – for example, to all sell their products for the same high price. Laws designed to outlaw this type of behavior are called antitrust legislation.

However, the term is used more generally to refer to laws designed to prevent companies from engaging in any kind of anti-competitive action – that is, do anything that would tend to artificially distort competition within a market.

One common myth is that antitrust laws only apply to monopolies. This is very much not the case: They apply to any company large enough to have a dominant position in any market. As we shall see below, the definition of the word “market” can be crucial to deciding whether antitrust concerns arise.

Why is Apple facing antitrust investigations?

First, Apple is a very large company, and it would be very easy for a company of that size to commit antitrust violations, so it is to be expected that any massive corporation would be put under the antitrust microscope.

But in Apple’s case, there are some more specific concerns based on the company”s market dominance in particular areas. These are addressed below.

What are the antitrust concerns with Apple?

There are a number of different ones, in areas as diverse as ad tracking and Sign In With Apple, but here are three of the main ones.

The App Store

The biggest antitrust concern is the App Store.

Apple argues that it does not have a dominant position in this market, as it considers the relevant market to be either “smartphones” or “apps.” Since the company holds a minority share of the smartphone market in most of the countries in which it operates, it believes it cannot be considered to have a dominant position.

Competition regulators tend to take the view that the relevant market is “iOS apps,” and here Apple has a 100% monopoly on their sale and distribution. Edge cases aside, there is no way for a developer to bring an iOS app to market without selling it through the App Store.

Companies like Epic Games argue that they should be allowed to sell in-app purchases without Apple taking a cut of their revenue. The argument here is that Apple harms developers by taking part of their income, and consumers by forcing developers to charge more to make up for Apple’s cut. Apple, in response, says that it is perfectly normal for a company to take a cut of the sales it facilitates.

Default apps

Additionally, some companies accuse Apple of anti-competitive behavior by giving its own apps advantages over third-party ones.

One way that Apple does this, they say, is by pre-installing its own apps. For example, when the Apple Weather app is already installed on an iPhone when you buy it, then Apple’s own app has an obvious advantage over a competing app.

There is overlap here with the App Store concerns. For example, Apple Music and Spotify are competitors, but not only is Apple Music preinstalled, you can subscribe from within the app. If Spotify offered this same ability, it would have to pay Apple a 30% cut. Spotify can’t afford this, so users are forced to take a more long-winded route to subscription, which gives Apple Music an additional competitive advantage.

Relationships with carriers and retailers

Apple has also been found guilty in more than one country of exploiting a dominant position within the smartphone market to place undue demands on carriers and retailers.

Because the popularity of iPhones meant carriers had to sell them, Apple was able to dictate terms. In South Korea, for example, it was accused of imposing three onerous conditions on local carriers:

  • Carriers had to buy minimum quantities of each model, dictated by Apple
  • Carriers had to share the cost of warranty repairs or replacements
  • Carriers had to pay to run Apple’s own TV ads for the iPhone

Budget-focused carriers might, for example, want to buy only older and cheaper models, as that’s what their customers want, but Apple would force them to buy flagship models, too. And if a phone proved faulty, Apple wouldn’t just replace it, but would oblige carriers to meet some of the costs. Finally, although carriers had to pay the full cost of running iPhone ads on TV, they were only allowed to use Apple’s own ads, and the only thing they were permitted to change was adding their own logo to the final frame.

Additional areas of concern range from Apple Pay to a 4K video codec alliance!

What could happen to Apple as a result?

Antitrust outcomes will usually happen on a country-by-country basis, though there are exceptions. In Europe, for example, it is likely that the European Union will act as a bloc, and that any legislation applying to Apple will apply across all 27 member countries.

The worst-case scenario for Apple is for the US government to call for the breakup of the company. For example, it might be ruled that Apple Inc cannot run an App Store while also selling the iPhones on which those apps run. This is not a likely outcome, however.

A more likely scenario is a series of smaller changes. For example, Apple might be required to appoint an independent oversight board to carry out app reviews, or that it must allow Spotify to offer in-app subscriptions without taking a cut.

How is Apple responding?

In public, Apple’s stance is an outraged one, arguing that it does not have a dominant position and is doing nothing wrong. Behind closed doors, the company is aware that it either has to change some of its practices, or be forced to do so by law.

For example, while publicly declaring that a 30% commission on apps was industry standard, Apple made a massive U-turn by introducing the Small Business Program, with a 15% commission instead. Although touted as applying to the smallest developers, it in fact applies to 98% of them. It would be more accurate to say that the App Store now has a standard commission rate of 15%, with a higher 30% rate applying only to a tiny minority of companies.

The company has also quietly made a number of other changes in direct response to antitrust concerns, for example, opening up the Find My app to third-party accessories, and allowing people to change their default email app and web browser.

However, Apple is still sticking its head in the sand and hoping the issue will go away – when it absolutely won’t.

Big tech lawyers for Apple and others ‘actively encouraging lawlessness’

Big tech lawyers for Apple and others 'actively encouraging lawlessness' – WSJ | Photo of judge's gavel on keyboard

A WSJ piece today suggests that big tech lawyers for Apple, Amazon, Google and other industry giants are not only failing to properly advise their clients, but are “actively encouraging” them to break the law.

The piece suggests that one reason Apple was rebuked by the judge in the Epic Games lawsuit was that its lawyers encouraged the company to abuse legal privilege …

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Apple using sketchy warning for apps bought using third-party payment systems [Updated]

Apple using sketchy warning for apps bought using third-party payment systems | Screengrab against dramatic red background

Update:

This message has been live in the App Store since the beginning of Apple’s DMA compliance efforts in March 2024.

In August 2024, Apple announced multiple changes to its compliance plan – including a change to the disclosure message that appears in the App Store for apps that do not use Apple’s In-App Purchase system. Apple proposed updating the disclosure to read:

Transactions in this app are supported by the developer and not Apple.

Learn more

The proposal also changed the design of the disclosure message, replacing the bright red “!” icon with a less aggressive gray “i” icon, as you can see below.

Apple tells 9to5Mac it was ready to implement the changes and that the EU took no issue with the updated disclosure sheet. According to Apple, however, the EU requested the company not implement the changes at that time and never followed up with further guidance. It then fined Apple $500 million for noncompliance last month.

Apple’s comments today align with a report from Politico last week, which said Apple tried addressing the EU’s concerns last summer but was stonewalled.

Here’s the updated disclosure sheet proposed by Apple:

Original story below.

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Brazilian antitrust regulator upholds order against Apple over App Store restrictions

Apple Brazil App Store

Today, Brazilian antitrust regulator CADE voted unanimously to maintain a provisional measure issued last week requiring Apple to loosen restrictions on how iOS developers offer services and handle payments in their apps.

The measure stems from an investigation launched in 2022 following a complaint by Latin American e-commerce giant Mercado Libre.

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Fighting Apple cost Epic Games more than $1B; CEO says it was worth it

Fighting Apple cost Epic Games more than $1B | Several Amex cards pictured

Epic Games‘ five year legal battle against Apple has cost the developer well over $100M in legal fees alone, and CEO Tim Sweeney says that the total cost has been north of a billion dollars.

While Sweeney thinks it was worth it, one high-profile Apple commenter has his doubts – suggesting the legal victory doesn’t necessarily mean Fortnite will be allowed back into the App Store

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A senior Apple exec could be jailed in Epic case; it’s time to end this disaster

A senior Apple exec could be jailed for lying; it's time to end this disaster | Photo taken from inside a prison

When the US Supreme Court upheld the court ruling in the Apple vs Epic Games case, I said that the iPhone maker’s response was clearly made in bad faith, and was effectively giving the middle finger to the judge in the case.

The judge has now officially confirmed this view. She has not only directly called out Apple for ignoring her ruling, but said that a senior Apple exec lied under oath, and referred the matter for prosecution …

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Apple appealing $570M EU fine, White House says it won’t be tolerated [U]

Apple says $570M EU fine is unfair, White House says it won't be tolerated | Apple Card viewed in the Wallet app

Apple was yesterday fined €500M ($570M) by the EU for its App Store policies. Apple has now responded, stating that it is being unfairly targeted, with the White House also weighing in to describe fines levied against Apple and Meta as “extortion.”

Update: While there had earlier appeared some softenting in position on both sides of the antitrust dispute, Apple has now told us that it will appeal the ruling – see the end of the piece …

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Opera says Apple’s DMA changes are not enough to truly open up iOS

Opera says Apple’s DMA changes are not enough to truly open up iOS

When the EU’s Digital Markets Act (DMA) came into effect last year, Apple was forced to implement many changes to iOS – including letting developers create web browsers with their own engine. A year later, none of the major web browsers have released an EU-specific version.

In an exclusive interview with 9to5Mac, Opera Product Manager Jona Bolin detailed why the changes made by Apple are still not enough to increase competition.

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Apple a ‘gangster’ company which finds crime pays, says Epic Games CEO

Apple a 'gangster' company which finds crime pays, says Epic Games CEO | Epic slide showing the steps needed to install the Epic Games App Store

Epic Games CEO Tim Sweeney has turned up the dial to 11 on his anti-Apple rhetoric, calling the iPhone maker a “gangster-style business” which has concluded that “crime pays.”

He said that both Apple and Google are guilty of the same practices, including using scare tactics to make iPhone and Android users afraid to install the Epic Games Store …

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Apple bizarrely fined $162M for App Tracking Transparency after advertisers complained

Apple fined $162M for App Tracking Transparency after advertisers complained | ATT permission screen on iPhone

Apple has been fined $162M by France’s competition regulator for the way App Tracking Transparency is implemented, stating that this is an abuse of the company’s powers.

This bizarre ruling follows a complaint by a group of trade associations representing advertisers who are no longer able to access user data to serve personalized ads …

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Apple won’t be fined by the EU over browser choice, after second change

Apple won't be fined by the EU over browser choice, after second change | iPhone with rainbow Apple logo and rainbow stripes

The European Union is reportedly set to announce that Apple won’t be fined for failing to comply with an antitrust law relating to choice of iPhone web browser. The maximum fine could have been as high as 10% of the company’s global revenue.

Apple initially made one change to iOS to allow users to set a different default browser, but the EU had ruled that this was not enough to make it compliant with the law …

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Apple won’t have to enable sideloading for users in Brazil, at least for now

Apple App Store Brazil Brazilian regulator

Apple has been facing scrutiny in Brazil over the App Store. Earlier this month, a Brazilian court ruled that Apple would have 90 days to allow sideloading on iOS for iPhone users in Brazil – but things are about to change. That’s because another judge has now ruled that Apple won’t have to implement the requested changes, at least for now.

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Apple loses antitrust appeal in Germany, could face new App Store rules

Whatever the App Store antitrust battles, can we all agree on this one thing? | 3D App Store icon

Apple has been facing increased antitrust scrutiny in Germany since a new law came into effect, and the company has now lost its latest appeal.

The Bundeskartellamt (Federal Cartel Office) had argued that it should have the right to directly order Apple to make changes to the way that it runs the App Store, and a court has now granted it this right …

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UK competition regulator wants iPhone browser competition, but Apple not allowed to win [U]

UK competition regulator wants iPhone browser competition, but Apple not allowed to win | Computer code seen on a monitor

The UK competition watchdog has effectively told Apple that it must allow free and open competition between iPhone web browsers, but at the same time Safari cannot be better than its competitors.

Update: The final report is now out, with no change to the CMA’s stance.

Apple has responded by stating that making new features available within WebKit “would lead to free-riding” by developers creating competing browsers …

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Phil Schiller had ‘great concerns’ about charging developers for external purchases

Phil Schiller

A lot of things have changed in the App Store over the last year. For instance, the company had to allow sideloading in the EU, while it also changed its guidelines to let developers link to external payment methods – as long as they still pay Apple a commission. But according to Apple Fellow Phil Schiller, he raised concerns about this idea at the time.

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China considering antitrust investigation into Apple, likely as leverage in trade war

China considering antitrust investigation into Apple, likely as leverage in trade war | Photo shows Beijing skyline at dusk

China is considering opening an antitrust investigation into Apple’s App Store commissions, mirroring those already carried out in the US, EU, and elsewhere.

However, it’s likely that the Chinese government is simply raising the possibility as a form of leverage in the latest trade war instigated by the Trump administration …

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Court denies Apple’s request to be involved in Google Search antitrust case

Apple and Google

Apple isn’t the only big tech facing antitrust investigations as Google has also come under scrutiny for its dominant position in the market. Even the deal between Google and Apple over Safari’s default search engine was considered a violation of antitrust laws, and a court has now ruled that Apple cannot intervene in the case.

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Apple denies App Store profit margin is 75% – claims to have no clue

Apple denies 75% profit margin on the App Store – says it can't be calculated | iPhone calculator app showing zero

Apple’s incoming CFO didn’t get much time to settle in before he found himself in court defending the company against a class action lawsuit. Kevan Parekh yesterday claimed that the company that it has no clue about its App Store profit margin.

This is a stance the company has taken before. Indeed, Apple Fellow Phil Schiller even went as far as to claim he didn’t even know whether the App Store made a profit at all …

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Apple was fined $2.1B last year, but could pay it all off in a week

Apple was fined $2.1B last year, but could pay it all off in a week | Close-up of a hand flicking through a stack of $100 bills

Apple was fined a global total of more than $2.1B last year for antitrust violations, but the sum was only the equivalent of just over a week’s worth of free cash flow.

Encrypted email company Proton put together its latest Tech Fines Tracker, in which Google was the most heavily-fined company, with Apple in second place …

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Google court filing makes bizarre suggestion about iPhone and iPad

iPhone and iPad could have different default search engines, says bizarre Google court filing | Both devices on a desk

The iPhone and iPad could have different default search engines, argues a Google court filing, as the company attempts to protect its $20B a year deal with Apple.

Google’s annual payment to Apple to be the default search engine in Safari looks certain to be banned in an antitrust case, but the search giant is hitting back with a number of counterproposals …

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