The Justice Department (DOJ) and a group of 16 states is directly challenging Apple’s core marketing point in a new antitrust lawsuit. The company’s privacy and security policies are being called into question as part of an alleged monopoly on the smartphone market, with the plaintiffs asserting that Apple applies these protections selectively and to serve its own business interests.
Apple accused of double standards by antitrust lawsuit
The antitrust lawsuit is perhaps best summed up in its characterization of Apple’s privacy and security policies as an “elastic shield” that it can selectively move when a business opportunity suits it.
One of the central points of privacy and security contention is iMessage, the default messaging app on its phones that end-to-end encrypts message exchanges with other Apple users but switches to fundamentally insecure SMS when communicating with an Android user. Apple has refused to let third-party apps add this functionality, most recently putting an end to startup Beeper by removing its ability to facilitate messaging between iOS and Android devices.
Another example of selective privacy and security concerns raised by the antitrust lawsuit is the company’s deal with Google, which makes their mobile OS rival’s search engine the default in Safari browsers in exchange for 36% of the revenue generated by user searches. Apple sells itself on protecting users from the invasive ad ecosystem that Google represents, but will shuttle users into it when the money and circumstances are right.
The DOJ is also scrutinizing Apple over its internal use of customer personal information, even if it is not sharing it with third parties. One example is the platform’s strong push to have users conduct all phone-based payments via Apple Wallet, something the company has famously facilitated by refusing to allow any other app developers to add tap-to-pay functionality.
The present antitrust lawsuit seems to have been crafted in response to the court decision in the fairly recent Epic Games vs Apple case, which validated a great deal of the terms under which Apple runs its App Store. The suit is now picking at elements outside of the store, and focusing more on how Apple handles personal data and applies privacy and security policies rather than what it charges developers.
Privacy and security challenge hits Apple where it lives
A win by the government in the antitrust lawsuit could undermine Apple’s marketing, which stresses privacy and security as the main justification for a phone price that averages $400 to $500 more than a comparable Android model.
While the Apple payment system might seem like just one among a collection of cherry-picked elements meant to further the antitrust case without addressing the App Store as a component, the DOJ correctly notes that internal company emails indicate that it has been a consistent business strategy going back to Steve Jobs and the introduction of the iPhone. The company has always intentionally sought to force developers into its own payment systems, primarily to make it harder for apps to be developed that easily allow end users to switch between Android and iOS.
The antitrust lawsuit also warns that Apple can be expected to port these business practices into any new market segment it enters. Apple is already into financial services and entertainment.
