The US Lawsuit Against Apple Raises Questions About iPhone and Android’s Future – CNET

It’s a debate as old as the smartphone itself: iPhone or Android? You probably made up your mind a long time ago and never looked back.

Now a landmark antitrust lawsuit wants to change that, claiming that it should be easier to switch between the world’s two largest mobile operating systems. The complaint, brought by the US Department of Justice and 16 state and district attorneys general, accuses Apple of locking iPhone users into its ecosystem through monopolistic practices that make it hard to leave.

The 88-page lawsuit argues that Apple’s tight grip on its software, hardware and app marketplace makes third-party apps and smartwatches significantly less appealing to iPhone users, therefore stifling innovation and resulting in fewer choices for consumers. Above all else, the complaint alleges these policies entrench iPhone users by imposing barriers when switching to Android. 

Anyone who owns a smartphone is probably familiar with the green versus blue bubble conundrum, which has become the exemplar for the discrepancy between iPhone and Android. While a large portion of the complaint focuses on messaging, it extends way beyond that to include allegations related to the App Store, Apple Wallet and the Apple Watch. 

That last part is significant because it calls Apple’s entire ecosystem approach into question. Regulators and critics have scrutinized the App Store for years, as evidenced by the blockbuster legal battle between Apple and Fortnite maker Epic Games. The Justice Department’s antitrust suit goes a step further by pushing for the iPhone to become more open and platform-agnostic on a fundamental level. 

“Usually you’ll have a one-off, where they’re going after the App Store,” said Gene Munster, a longtime Apple observer and managing partner at Deepwater Asset Management. “But in this case, it’s going after both iPhone retention and the App Store.”

It’s impossible to say what the outcome will be, and it will likely be years before we know. But the lawsuit raises big questions about how smartphone platforms should work together. The timing coincidentally comes as tech giants are likely laying the groundwork for the smartphone’s next major shift to AI-based interfaces. The outcome of this lawsuit may influence how those future plans shake out. 

Read more: Google Gemini on the iPhone Would Be AI’s Mainstream Moment

The smartphone as a platform

The plaintiffs accuse Apple of harming competition in five key areas: super apps, cloud streaming game apps, messaging apps, smartwatches and digital wallets. While the specifics vary, the allegations generally fall under two themes. First, they allege that Apple blocks apps that would make the iPhone more platform-neutral. And second, they claim the company makes third-party apps, services and products less appealing by restricting their access to Apple’s technologies or limiting their app distribution.

So-called super apps are an example of the first theme. Super apps may be unfamiliar to most people in the US, but they’re a staple in Asian culture. As the name implies, super apps are single apps that include a variety of miniature apps within them, making it possible to accomplish most daily needs with just one app — from paying for your morning coffee to texting a friend and ordering concert tickets. Tencent’s WeChat is among the most popular examples. 

Super apps can make it easy to switch between smartphone platforms since you could simply download the super app and log into it on your new phone. But in the lawsuit, Apple is accused of preventing apps from functioning in this way.

“Apple created, strategically broadened, and aggressively enforced its App Store Guidelines to effectively block apps from hosting mini programs,” the complaint reads. “Apple’s conduct disincentivized investments in mini program development and caused U.S. companies to abandon or limit support for the technology in the United States.” 

When it comes to the latter category, the lawsuit focuses primarily on Apple’s efforts in the smartwatch and mobile payments industries. It claims that Apple hampers the functionality of third-party smartwatches by imposing limitations that don’t exist with the Apple Watch. Those restrictions include the inability to respond to notifications from the watch and maintain a consistent connection to the iPhone without Bluetooth. 

“As a result, iPhone users have a worse experience when they try to use a third-party smartwatch with their iPhone,” the lawsuit reads. 

And once an iPhone user purchases an Apple Watch, it becomes more difficult for them to switch to Android, the lawsuit claims.

“Apple’s smartwatch — Apple Watch — is only compatible with the iPhone,” says the complaint. “So, if Apple can steer a user towards buying an Apple Watch, it becomes more costly for that user to purchase a different kind of smartphone because doing so requires the user to abandon their Apple Watch and purchase a new, Android-compatible smartwatch.”

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The App Store has traditionally been at the heart of antitrust concerns regarding Apple. 

Angela Lang/CNET

Apple said in a statement that it plans to “vigorously defend” against the lawsuit, adding that it believes the complaint is “wrong on the facts and the law.”

“This lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets,” the company’s statement read. “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.” 

The smartphone’s next phase

These allegations come at a pivotal time in the smartphone industry. Tech giants have been weaving generative AI into their products throughout the past year thanks to ChatGPT’s popularity, and the technology is starting to play a bigger role in smartphones — potentially defining where they go next. 

We’re already seeing this happening in new smartphone software, such as Samsung’s Galaxy S24 series, which includes a suite of AI-powered features based on the company’s own models and in collaboration with Google. Apple’s next operating system update, iOS 18, is also expected to come packed with new AI-fueled tools and updates, according to Bloomberg

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