Resources for Teachers and Students

Front Page Talking Points

FOR THE WEEK OF APR 15, 2024

Feds vs. Apple: Major case tests whether iPhone breaks a 19th century law against monopolies

frontpageactionpoints.gif

1.gifSummarize other coverage of technology or any pop culture news.

2.gifNow read different legal news and list two things you learn.

3.gifShare a quote or fact from another Washington, D.C., article.

An 1890 law is being applied against Apple, accused by the U.S. Justice Department of hurting consumers by limiting smartphone competition. The government accuses the tech giant of violating the Sherman Act, passed by Congress 134 years ago to combat companies that create illegal barriers to competition – known as a monopoly. Apple has 65 percent of the smartphone market in terms of revenue, though individual iPhones amount to less than half the U.S. total in that category. (Android competitors include Google, Samsung, Motorola and Moto.)

Federal prosecutors argue in an 88-page civil lawsuit that the firm based in California's Silicon Valley "uses its control over the iPhone to engage in a broad, sustained and illegal course of conduct." Specifically, the suit says, "Apple undermines apps, products and services that would otherwise make users less reliant on the iPhone." It cites alleged limits on outside messaging apps that try to compete with iMessage, as well as limits on access to the phone's payment chip and technology that keeps Bluetooth trackers from tapping into its location-service feature. It's also easier for users to connect Apple watches and laptops to the iPhone than to those from other firms. All of this creates what critics call an uneven playing field. "Consumers should not have to pay higher prices because companies violate the antitrust laws," says Attorney General Merrick Garland. "If left unchallenged, Apple will only continue to strengthen its smartphone monopoly."

Apple says its practices make iPhones more secure than other smartphones. The legal challenge filed March 21 "threatens who we are and the principles that set Apple products apart in fiercely competitive markets," a company statement says.

Sixteen state attorneys general and district attorneys join the Justice Department's side. Cases like this take a long time – often years – to play out, unless one or both sides are highly motivated to agree on a settlement. A trial may not begin until the second half of 2026, based on similar suits against Amazon and Google, predict Wall Street analysts at TD Cowen, an investment bank and financial services firm. Apple also faces scrutiny overseas. European Union regulators last month fined it $2 billion – yes, billion – for hindering competition by Spotify and other music streamers.

Justice Department says: "To protect its smartphone monopoly — and the extraordinary profits that monopoly generates — Apple repeatedly chooses to make its products worse for consumers to prevent competition from emerging." – Lawsuit filing

Apple says: "If successful, [the suit] 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." – Company statement

Tech writer says: "The lawsuit against Apple is a terrible way to try to control the tech giant, but it might be the only option. . . . The Department of Justice the DOJ apparently has a strong case." – Charlie Sorrel, senior reporter at lifewire.com

Front Page Talking Points is written by Alan Stamm for NIEonline.com, Copyright 2024

Front Page Talking Points Archive

Common Core State Standard
SL.CCS.1/2/3/4 Grades 6-12: An essay of a current news event is provided for discussion to encourage participation, but also inspire the use of evidence to support logical claims using the main ideas of the article. Students must analyze background information provided about a current event within the news, draw out the main ideas and key details, and review different opinions on the issue. Then, students should present their own claims using facts and analysis for support.