Apple Smartphone Market Monopoly Case Leads to Huge Stock Losses

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This landmark case takes direct aim at the digital fortress that Apple has built around iPhone and other products to create what is known as “Apple’s Walled Garden.”

The US Department of Justice filed a historic lawsuit against Apple, alleging that the technology giant engaged in monopolistic practices to control the smartphone market, undermine the movement of competitors, and limit consumer choices, which led to the company’s stock losing 4% of its value during trading.

The US government criticizes the tactics used by Apple in shaping user behavior, and even developer behavior, especially when it comes to some of its popular products such as iMessage and Apple Watch.

Experts believe that if the United States succeeds in its case filed in a federal court in New Jersey, it will mean a lot of changes that could have major implications for the Android ecosystem.

Possible Outcomes of United States V. Apple

Here are some of the most notable potential outcomes of the case against Apple, which could make waves in the Android world:

1. Using Apple smart watches on Android

The lawsuit claims that iOS’s monopoly over the Apple Watch could leave users trapped within the iOS ecosystem, because switching to alternative operating systems would require the user to ditch the expensive Apple Watch and purchase a new Android-compatible smartwatch.

So the primary goal of the lawsuit here is to demand that Apple make its smart watch compatible with Android. Which removes barriers for users, but the technology giant fears that this step may lead to the elimination of the competitive advantage enjoyed by Apple products in general.

2. Run Google digital wallet on iOS

The Justice Department argues that Apple’s control of the iOS environment to block third-party digital payment platforms is another way to keep its users stuck inside the walled garden.

But if Apple’s policies change, it’s entirely possible that Google Wallet could be a payment option on the iPhone one day. Which makes it really easy for users to switch from iPhone to Android and vice versa.

3. Full iMessage interoperability

According to the lawsuit, Apple places arbitrary limits on iMessage functionality to make transitioning from iOS to another system more difficult. The Federal Communications Commission previously investigated Apple’s blocking of the Beeper Mini app, which enables iMessage, on Android. Thus, the lawsuit targets a safer messaging environment on the iPhone to stop talking about the green bubble crisis.

4. Reducing developers’ fees for using the Apple App Store

The US case against Apple will push for lower Play Store fees for developers who create Android apps; Which contributes to encouraging innovation and the emergence of new entrepreneurial experiences.

5. Run the Apple News app on Android

It is common knowledge that users are forced to pay large sums of money to subscribe to Apple services, and if they want to use other devices, they will face severe technical difficulties when enjoying their services, which is a form of monopoly that the lawsuit criticizes.

Accordingly, the Department of Justice demands that Apple News, the aggregated news service provided by the tech giant, be made available across all platforms.

6. More reliance on Android

The lawsuit criticizes Apple’s strategy in building consumer loyalty to its brand, as it does so not through the competitive advantages of its products, but through its procedures that make it difficult for the user to move outside its closed garden fence.

If the Justice Department succeeds in its lawsuit, the transition between operating systems will become very smooth, enhancing competition between companies and making the market more open.

Apple Loses Billions in Market Value

According to Bloomberg, lawsuits violating antitrust laws in the United States have caused Apple to lose tens of billions in market value, and in Europe, The company is said to be facing investigations into whether it complies with the region’s digital markets law.

The company’s share price fell by more than 4% on Thursday, causing Apple to lose about $115 billion of its market value, bringing the stock’s losses since the beginning of the year to date to more than 11%.

The question now is: After the technology giant Apple succeeded in subjecting iPhone lovers to its special magic, and imposing its control over its users and trapping them inside its fortified digital castle, will the magic turn against the magician if the US Department of Justice succeeds in its lawsuit?

Source: Bloomberg