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Posts tagged with "antitrust"

Microsoft Eyes Xbox Web Store after Epic Court Decision→

In the wake of U.S. District Judge Yvonne Gonzalez Rogers’ decision in Epic Games’ litigation against Apple, I commented on NPC: Next Portable Console that I expected Microsoft to enter the fray with its own web store soon. As reported by Tom Warren at The Verge, it looks like that’s exactly what Microsoft intends to do. Commenting on Judge Gonzalez Rogers’ contempt order in the context of Epic’s recent motion to return Fortnite to the App Store, Warren notes:

It’s a key ruling that has already allowed Fortnite to return to the App Store in the US, complete with the ability for Epic Games to link out to its own payment system inside the game. Microsoft has wanted to offer a similar experience for its Xbox mobile store prior to the ruling, but it says its solution “has been stymied by Apple.”

Ultimately, Microsoft wants its customers to be able to purchase and play its games from inside the Xbox app:

Microsoft started rolling out the ability to purchase games and DLC inside the Xbox mobile app last month, but it had to remove the remote play option to adhere to Apple’s App Store policies. You can’t currently buy an Xbox game in the Xbox mobile app on iOS and then stream it inside that same app. You have to manually navigate to the Xbox Cloud Gaming mobile website on a browser to get access to cloud gaming.

Developers continue to add options to link out to the web to purchase content, but as Microsoft’s court filing shows, the biggest players on the App Store are weighing the cost of setting up their own storefronts against the risk that Judge Gonzalez Rogers’ decision will be reversed on appeal.

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Eddy Cue Causes a Stir for Google

2025 is shaping up to be the year of litigation for big tech. Apple’s been held in contempt and has an antitrust case on the horizon, Meta is in the midst of an antitrust trial, and Google is defending two antitrust lawsuits at once. Every one of these cases is a high-stakes challenge to the status quo, and collectively, they have the potential to reshape the tech industry for years to come.

The ultimate question for Google right now is whether it will be broken up. What will become of its ad tech business, and will it be forced to sell Chrome? That will be decided by the judges in those cases, but along the way, there are plenty of sideshow dramas worth keeping an eye on. This week, it was Google’s turn for a little litigation drama that was prompted not by a judge, but by none other than Apple’s SVP of Services Eddy Cue.

As part of Google’s search antitrust case, Cue testified yesterday that in April 2025, Google searches declined in Safari for the very first time. Cue’s testimony, which was reported on by Mark Gurman, Leah Nylen, and Stephanie Lai of Bloomberg, went on to explain that Apple is investigating AI search as an alternative to traditional search engines, noting that the company has had discussions with Perplexity.

Google’s stock immediately began to fall. By the close of trading, it was down around 7.5% and had caused enough concern internally at Google that the company felt compelled to release a one-paragraph statement on its blog, The Keyword, responding not to the testimony but to “press reports:”

Here’s our statement on this morning’s press reports about Search traffic.

We continue to see overall query growth in Search. That includes an increase in total queries coming from Apple’s devices and platforms. More generally, as we enhance Search with new features, people are seeing that Google Search is more useful for more of their queries — and they’re accessing it for new things and in new ways, whether from browsers or the Google app, using their voice or Google Lens. We’re excited to continue this innovation and look forward to sharing more at Google I/O.

It’s not news that Google Search is under threat from AI. However, Cue’s testimony under oath that Google searches in Safari are in decline is the first concrete evidence publicly shared that the threat is not just theoretical, which is a big deal.

Apple’s exploration of AI-based search is not terribly surprising either, but I do hope they cut a broader deal with Anthropic instead of Perplexity. I understand why Perplexity’s product is popular, but its CEO’s contempt for the open web and user privacy is something that I’d rather not see Apple perpetuate through a partnership.

European Commission Orders Apple To Improve Third-Party Device Integration

Just as I was linking to Eric Migicovsky’s post about the disadvantages third-party smartwatch makers face when trying to integrate with the iPhone, the European Commission (EC) released a pair of related specification decisions regarding Apple’s Digital Markets Act compliance. The first covers iPhone connectivity with third-party devices:

The first set of measures concerns nine iOS connectivity features, predominantly used for connected devices such as smartwatches, headphones or TVs. The measures will grant device manufacturers and app developers improved access to iPhone features that interact with such devices (e.g. displaying notifications on smartwatches), faster data transfers (e.g. peer-to-peer Wi-Fi connections, and near-field communication) and easier device set-up (e.g. pairing).

The other decision focuses on the process of interoperability:

The second set of measures improves the transparency and effectiveness of the process that Apple devised for developers interested in obtaining interoperability with iPhone and iPad features. It includes improved access to technical documentation on features not yet available to third parties, timely communication and updates, and a more predictable timeline for the review of interoperability requests.

An unidentified spokesperson for Apple responded with a statement to 9to5Mac:

Today’s decisions wrap us in red tape, slowing down Apple’s ability to innovate for users in Europe and forcing us to give away our new features for free to companies who don’t have to play by the same rules. It’s bad for our products and for our European users. We will continue to work with the European Commission to help them understand our concerns on behalf of our users.

This decision shouldn’t come as a surprise to anyone who has been following our DMA coverage. It’s easy to understand why Apple is unhappy about this decision, but it’s also just as easy to understand how the status quo holds back competition. There are no easy answers to any of this, but as difficult as this may be for Apple to do while upholding its privacy, security, and other standards, I’m glad the EU is pushing for change and hope those changes spread to other corners of the globe.

Google’s Antitrust Loss, Why Apple Doesn’t Just Build a Search Engine, and What Comes Next

Yesterday, Federal District Judge Amit Mehta issued a ruling in the U.S. Justice Department’s antitrust case against Google in favor of the government. Judge Mehta didn’t mince words:

Google is a monopolist, and it has acted as one to maintain its monopoly. It has violated Section 2 of the Sherman Act.

The Judge further explained his ruling:

Specifically, the court holds that (1) there are relevant product markets for general search services and general search text ads; (2) Google has monopoly power in those markets; (3) Google’s distribution agreements are exclusive and have anticompetitive effects; and (4) Google has not offered valid procompetitive justifications for those agreements. Importantly, the court also finds that Google has exercised its monopoly power by charging supracompetitive prices for general search text ads. That conduct has allowed Google to earn monopoly profits.

It’s a long opinion, coming in at nearly 300 pages, but the upshot of why Judge Mehta ruled the way he did is summed up nicely near the beginning of the tome:

But Google also has a major, largely unseen advantage over its rivals: default distribution. Most users access a general search engine through a browser (like Apple’s Safari) or a search widget that comes preloaded on a mobile device. Those search access points are preset with a “default” search engine. The default is extremely valuable real estate. Because many users simply stick to searching with the default, Google receives billions of queries every day through those access points. Google derives extraordinary volumes of user data from such searches. It then uses that information to improve search quality. Google so values such data that, absent a user-initiated change, it stores 18 months-worth of a user’s search history and activity.

If you’re interested in how web search works and the business deals that drive it, the opinion is a great primer. Plus, although the details already dribbled out over the course of the 10-week trial, there are lots of interesting bits of information buried in there for anyone interested in Apple’s search deal with Google.

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Automattic Acquires Messaging Integrator Beeper→

Mark Gurman, writing for Bloomberg, reports that Beeper, the messaging app that ultimately lost its fight to bring blue bubbles to Android, has been acquired by Automattic, for $125 million according to his sources.

You may recall that Automattic, the company behind WordPress, Tumblr, Day One, Pocket Casts, and other endeavors, acquired a company called Texts last fall. Roughly two months later, Beeper took advantage of a loophole in iMessage’s architecture to offer iMessage natively on Android. After some back and forth, Apple ultimately blocked the technique Beeper was using.

According to Gurman, Automattic is acquiring Beeper’s team of 27 employees, its app, which integrates services like Signal, Facebook Messenger, and Slack, and about 100,000 customers. Of those things, I suspect the people and the customers were most important to Automattic because, as I explained in my story about the company’s purchase of Texts, the two services run on different technology stacks. Regardless of Automattic’s underlying motivations, it’s more apparent than ever that the company is betting that consumer demand, government regulation, and antitrust lawsuits will open up messaging platforms for companies ready to integrate them.

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AppStories, Episode 377 – Why the DOJ Claims Apple Is a Monopoly

This week on AppStories, we explain what’s going on with the US Department of Justice’s lawsuit against Apple that claims the iPhone-maker is monopolizing the smartphone market.

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The US Department of Justice’s Antitrust Complaint Against Apple

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On AppStories+, I explain the research and writing workflow I developed for big projects like covering the DOJ’s lawsuit against Apple.

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Understanding the DOJ’s Antitrust Complaint Against Apple

Last week, the U.S. Department of Justice, 15 states, and the District of Columbia sued Apple for alleged federal and state antitrust violations. Apple issued an immediate response, and before anyone had time to read the DOJ’s 88-page complaint, the Internet was overrun with hot takes.

However, the thing about lawsuits – and especially big, sprawling, high-stakes ones like the DOJ’s – is that they’re the proverbial tortoise to the Internet’s hare. Barring a settlement among the parties, the case against Apple isn’t likely to go to trial anytime soon. Add to that appeals, and this process is going to take years, not months.

So, since we have plenty of time, I thought I’d kick off our coverage at MacStories with a look at the DOJ’s complaint and its legal underpinnings, along with some observations on what’s going on and what you can expect to happen next.

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Demystifying Digital Wallets and Apple Pay→

One of the many allegations in the Department of Justice’s antitrust complaint against Apple is that Apple stifles competition by:

effectively block[ing] third-party developers from creating digital wallets on the iPhone with tap-to-pay functionality, which is an important feature of a digital wallet for smartphones. As a result, Apple maintains complete control over how users make tap-to-pay payments with their iPhone. Apple also deprives users of the benefits and innovations third-party wallets would provide so that it can protect “Apple’s most important and successful business, iPhone.”

(DOJ Complaint at ¶ 104).

In a post a couple of days ago, John Gruber suggested that the DOJ is off-base because he doubted banks or other credit card companies would obfuscate credit card numbers the way Apple does. In fact, as Matt Birchler, who works in the payments industry, explains, many U.S. banks and other companies do (or did) the same thing, using something called a DPAN:

It’s notable that it’s called a DPAN and not “the Apple Pay number” – it’s a generic term, and that’s because this is a standard feature of digital wallets everywhere, not just Apple Pay. Google Pay and Samsung Pay are the biggest other digital wallets in the U.S. and they both do exactly the same thing. While it’s not technically using a DPAN since the payment runs through different companies, Amazon Pay and Shop Pay buttons also obscure the actual FPAN (full card number) from merchants.

And it’s not just tech companies using DPANs – U.S. banks do too:

Numerous banks from Walls Fargo to Chase to Bank of America have (or had) digital wallets, all of which used DPANs to protect your plain text account number. Paze is what a few big U.S. banks use today and it of course uses DPANs as well.

It’s not surprising that there is confusion about Apple Pay. Apple doesn’t tell customers about DPANs. Instead, the company uses its unique mix of hardware, software, and excellent marketing to make its payment system feel like magic.

In addition to DPANs, Birchler covers:

  • The differences between FPANs and DPANs
  • The extent to which you can be tracked using your Apple Pay purchase history
  • How much personal data Apple Pay transmits to merchants

The post is an excellent read that dispels common myths and confusion about Apple Pay clearly and concisely. It’s the exact kind of explanation of the industries Apple is accused of monopolizing that I hope we see more of as the DOJ’s lawsuit proceeds.

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US Department of Justice and States Sue Apple Under Federal and State Antitrust Laws

The US Department of Justice and 16 states have sued Apple for antitrust violations in an 88-page complaint filed in New Jersey federal court. At the time of publication, the DOJ’s press release, which has been shared with some media outlets, has not been published on the DOJ website, although I expect it will be before long. In response, Apple says:

At Apple, we innovate every day to make technology people love—designing products that work seamlessly together, protect people’s privacy and security, and create a magical experience for our users. This lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets. If successful, it would hinder our ability to create the kind of technology people expect from Apple—where hardware, software, and services intersect. It would also set a dangerous precedent, empowering government to take a heavy hand in designing people’s technology. We believe this lawsuit is wrong on the facts and the law, and we will vigorously defend against it.

We’ll have a more detailed breakdown of the plaintiffs’ allegations against Apple soon, but the allegations are broad, claiming that:

  • Apple has monopolized or attempted to monopolize the smartphone market under the federal Sherman Act;
  • Apple has monopolized or attempted to monopolize the performance smartphone market under the federal Sherman Act and Wisconsin and New Jersey antitrust laws

(emphasis added).

The DOJ and states argue that Apple’s alleged anticompetitive behavior extends beyond its effect on users and developers to touch a wide swath of the economy:

Critically, Apple’s anticompetitive conduct not only limits competition in the smartphone market, but also reverberates through the industries that are affected by these restrictions, including financial services, fitness, gaming, social media, news media, entertainment, and more. Unless Apple’s anticompetitive and exclusionary conduct is stopped, it will likely extend and entrench its iPhone monopoly to other markets and parts of the economy. For example, Apple is rapidly expanding its influence and growing its power in the automotive, content creation and entertainment, and financial services industries–and often by doing so in exclusionary ways that further reinforce and deepen the competitive moat around the iPhone.

The DOJ and states seek a number of different remedies, including:

a. preventing Apple from using its control of app distribution to undermine cross-platform technologies such as super apps and cloud streaming apps, among others;

b. preventing Apple from using private APIs to undermine cross- platform technologies like messaging, smartwatches, and digital wallets, among others; and

c. preventing Apple from using the terms and conditions of its contracts with developers, accessory makers, consumers, or others to obtain, maintain, extend, or entrench a monopoly.

There’s a lot to digest in the complaint, which you can read for yourself here. I highly recommend reading at least the introduction to get a better sense of what Apple is being accused of. Keep in mind that this is just one side of the story, but Apple will tell its side in more detail soon enough. And, of course, I will be back soon with a more detailed look at what this lawsuit is all about and what’s at stake.