Does Apple have a monopoly on smartphones? Maybe, and their case could have a seismic impact on the business odds.
Is the green bubble about to burst? Last Thursday, the U.S. Justice Department and 16 state attorneys general filed a lawsuit against Apple, accusing the technology giant of “violating federal antitrust law” to gain a monopoly over the smartphone market. Included in their complaint: the color of the text messages sent from Android devices to iPhone users.
If you’ve ever received one of these messages, you know that green color (Android Green, or HEX #3DDC84 since 2019) all too well. This shade of chartreuse is the official color of the Android robot mascot; it stands in sharp contrast to the blue that Apple uses to identify “iMessage” texts sent between iOS users.
Apple is violating the law with the iPhone’s signature “green bubbles” in the Messages app by making it harder to message non-iPhone users, said Attorney General Merrick Garland in a news conference Thursday.
Alongside 16 state attorneys general, the Justice Department filed an… pic.twitter.com/r9WTOdbY6A
— PBS NewsHour (@NewsHour) March 21, 2024
Over the years, people have been ostracized from group chats, or even dumped by their significant others, because of those green bubbles. But Thursday’s filing isn’t ultimately about color – it’s about power, and whether Apple has abused theirs to corner the market and extract more money from you.
Given that Apple is a close second behind Microsoft on the list of the world’s largest companies (by market cap), this filing could turn the business world upside down if Apple is forced to break apart.
Here’s what you need to know before you hit the top-rated sportsbooks and place your next wager on Apple’s future.
Why Is Apple Getting Sued?
The 88-page complaint by the U.S. Justice Department (filed in the US District Court for New Jersey) boils down to the following three issues:
- Apple discourages customers from using Android devices.
- Apple makes it harder for third parties to create apps.
- Apple increases costs for users and developers.
Again, even if you’re color-blind, the suit alleges that you’ve suffered from Apple’s “exclusionary conduct.” At various points, Apple has reduced the quality of multimedia iMessage texts sent to Android phones, or blocked them altogether.
Apple has also failed to provide Android support for the Apple Watch, and restricted third-party access to technology like Apple Pay. On top of that, Apple regularly charges a 30% commission on sales through their App Store.
Throw that all into the pot, and you have what U.S. Attorney General Merrick Garland called “monopoly power in the smartphone market,” maintained by illegal means.
Does Apple Have a Monopoly on Smartphones?
Sort of – at least in the United States. According to Statcounter’s numbers for 2023, iOS users make up about 62.1% of the U.S. market, compared to 37.5% for Android.
Globally, those numbers flip to 67.6% for Android and 31.5% for iOS.This doesn’t constitute a monopoly in the strictest sense of the word. But the concern here isn’t the absence of competition; it’s about illegal anti-competitive practices.
Will Apple Get Broken Up?
Probably not. Back in the early ‘80s, when AT&T was broken up into seven smaller companies, the “Bell System” had a much tighter grip on the telecommunications market than Apple does today. Almost everyone in the U.S. got their phone service through AT&T, and the company itself got most of its equipment from its own subsidiary, Western Electric.
That doesn’t mean changes aren’t coming. The European Union has already dropped the hammer on Apple, using its new Digital Markets Act to force the California-based company to mend its ways; Apple did indeed announce that users in the EU would be allowed access to third-party app stores.
Something similar is likely to happen on American shores, eventually. And investors are worried; on the day the DOJ filed their lawsuit, Apple lost somewhere around $113 billion in market cap, and they’re still shedding money as we go to press.
Of course, it’s not guaranteed that the DOJ will win this suit. But Rebecca Haw Allensworth, associate dean for research at Vanderbilt Law School, told The Verge that the DOJ complaint is a “stronger lawsuit” than the one the Federal Trade Commission filed against Amazon last September, since it shows harm done to consumers as well as developers.
What Will Happen to My iPhone?
Not much, really. If you’re reading this in the United States, your user experience should be mostly the same, except you’ll presumably have access to a wider set of apps at more competitive prices.
In the meantime, Apple already announced last November that those images and videos sent between iOS and Android devices will work better once they roll out their new technology sometime this year. But any Android text bubbles you receive will remain green – unless you change the color yourself in the settings.
