Apple Faces Antitrust Probe from U.S. and EU Authorities, Threatened with Sanctions

Apple Faces Sanctions from U.S. and European Regulatory Authorities
Competing in the Market with Advanced Technology

Apple, the manufacturer of the iPhone, is now under sanctions from U.S. and European regulatory authorities. Apple’s closed ecosystem has come under scrutiny.

According to the Financial Times, on the 21st (local time), the U.S. Department of Justice and 16 states sued Apple for antitrust violations in a New Jersey court. The main allegation is that Apple, leveraging its strong market dominance, has forced users to bear high costs. Various illegal activities have been found to expand Apple’s market dominance and generate substantial profits, sparking controversy.

The U.S. Department of Justice cited five technologies that suppressed competition as the main allegations. First, it limited the usability of messages to prevent the expansion of the Android phone market and the departure of iPhone customers. It restricted compatibility between other smartwatches and the iPhone, and the app store payment function was restricted to its system. The regulatory authorities argued that these actions limited competition.

Apple is also accused of obstructing cloud streaming services and controlling iPhone functions to prevent competitors from providing innovative software.

Following the U.S., Apple has also become the subject of inspection in Europe. The European Union (EU) pointed out allegations of Apple’s illegal activities as the first interrogation target under the Digital Market Act (DMA), which has been executed since the 7th to prevent big tech abuse of market dominance.

According to The Guardian, the EU Commission will announce plans to examine Google and Apple’s violations of the DMA on the same day.

With the implementation of the DMA, it has been reported that whether Apple’s new fee policy and terms of use, which it began to impose on app store developers, comply with the DMA regulations will be the subject of the inquisition.

The DMA law prohibits preferential behaviors that allow big tech companies to enable interoperability between their platforms and third-party services, such as installing external apps or alternative app stores and making their services more visible than competitors’.

In response, Apple has decided to open its App Store in Europe only, allowing app downloads from developers’ web browsers without going through its App Store.

The Wall Street Journal (WSJ) stated that Apple’s closed ecosystem, which has led to its success, is now facing a major challenge and has become its most significant liability.