Following a lengthy investigation, the United States Justice Department is set to file a lawsuit against Apple for potentially breaching antitrust laws. The department alleges Apple is using hardware and software limitations that make it harder for rival companies to compete with iPhones and iPads. If the filing goes ahead, it will mean each of the big four tech companies – Amazon, Meta, Google, and Apple – will have been sued by the US federal government within the past five years for monopolistic business practices.
Antitrust laws, which originated with the US Sherman Antitrust Act of 1890, ban business arrangements that restrain trade and prohibit attempts to monopolize. Over time, these laws have evolved and been adopted by countries all over the world. They are meant to enforce fair competition by prohibiting business practices that promote unfair monopolies, stifle competition, and reinforce dominance or power.
In recent years, technology products have come under scrutiny, particularly with a focus on artificial intelligence. However, the business practices of tech giants have garnered less public attention. The current antitrust lawsuits filed against the big four specifically target the companies themselves, alleging that they are concentrating the market and charging higher markups for their goods and services, while having less incentive to innovate in ways that benefit consumers.
Apple is not the first of the big four to be accused of breaching antitrust laws. Google has faced significant fines from the European Union for three separate breaches of antitrust laws, including unfair dominance of the Android operating system market and abusive practices in online advertising. While Google has made some changes to its practices, it continues to appeal the fines.
Meta, formerly known as Facebook, is also under scrutiny for its acquisitions of Instagram and WhatsApp, with allegations that these purchases eliminated competition. Amazon has been sued by the US Federal Trade Commission and state attorneys general for allegedly using anticompetitive and unfair strategies to maintain dominance in the market.
Various countries, including Australia, have been investigating global tech giants and looking for ways to protect consumers. In Australia, measures such as the Australian Competition and Consumer Commission (ACCC) news media bargaining code have been implemented to require digital platforms to compensate news publishers for the use of their content. However, there are still gaps in privacy laws and consumer law that leave Australians with fewer protections online compared to consumers in the US and other countries.
The ACCC has also identified significant market power held by Google’s Play Store and Apple’s App Store in the distribution of mobile apps in Australia. The ACCC has proposed measures to address this, including increasing transparency and providing greater choice of default apps for consumers.
Antitrust laws are crucial for maintaining fair competition among businesses. If governments are successful in holding tech giants accountable for breaching these laws, it could lead to a redefinition of the tech market, promoting more equitable competition and ethical business practices.
