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The Apple Antitrust Case and the ‘Stigma’ of the Green Bubble

Mar 24, 2024 4:00 AM

The Apple Antitrust Case and the ‘Stigma’ of the Green Bubble

The US government's Apple lawsuit leans on the social cost of not owning an iPhone, an unusual argument for antitrust.

A crowd of people taking photos of iPhone 15 smartphones on display

Attendees look at the new iPhone 15 during an Apple event at the Steve Jobs Theater at Apple Park on September 12, 2023, in Cupertino, California.Photograph: Justin Sullivan/Getty Images

Back in 2022 at the annual Code Conference, where tech luminaries submit to onstage interviews, an audience member asked Apple CEO Tim Cook for some tech support. “I can’t send my mom certain videos,” he said; she used an Android device, which means she can't access Apple’s iMessage. Cook’s now-infamous response: “Buy your mom an iPhone.”

Cook’s remark and Apple’s recent decision to block the third-party app Beeper from bridging the Android-to-iMessage interoperability chasm are two of the many examples of allegedly monopolistic behavior cited in the US government’s antitrust suit against Apple. Central to the case is Apple’s practice of “locking in” iPhone customers by undermining competing apps, using its proprietary messaging protocol as glue, and generally making it challenging for people to switch to other phones.

Those accusations are backed up by lawyerly references to the Sherman Act. But the complaint also shows the Department of Justice crafting a cultural narrative, trying to tell a technology tale with a clear message—like an episode of the crime drama Dragnet, says antitrust expert William Kovacic, who teaches at George Washington University and King’s College, London.

The Apple antitrust lawsuit, filed Thursday by the DOJ and more than a dozen state attorneys general, claims that in addition to degrading the quality of third-party apps, Apple “affirmatively undermines the quality of rival smartphones.” Because messages sent between iPhones via Apple’s proprietary network appear in blue bubbles, but those from Android phones appear in green and are excluded from many iMessage features, Apple has signaled to consumers that rival phones are of less quality, the suit alleges.

The suit includes references to the negative cultural and emotional impact of the restrictiveness of some Apple products. It ranges beyond the typical antitrust case, in which investigators might focus on supracompetitive pricing or the conditions of corporate deals that restrict competition. The core of US antitrust cases has long been proving consumers paid higher prices as a result of anticompetitive practices. But a few key paragraphs within the 88-page filing mention the exclusion and social shaming of non-iPhone users confined inside green chat bubbles, distinguishing this case from some of the more recondite explanations of tech market competition in recent years.

“Many non-iPhone users also experience social stigma, exclusion, and blame for ‘breaking’ chats where other participants use iPhones,” the suit reads. It goes on to note that this is particularly powerful for certain demographics, like teenagers, who The Wall Street Journal reported two years ago “dread the ostracism” that comes with having an Android phone.

The DOJ argues that all of this reinforces the switching costs that Apple has baked into its phones. Apple is so dominant in the smartphone market not because its phones are necessarily better, the suit alleges, but because it has made communicating on other smartphones worse, thereby making it harder for consumers to give up their iPhones.

Legal experts say this social stigma argument will need much stronger support to hold up in court, because it doesn’t fit with traditional definitions of antitrust. “What is Apple actually precluding here? It’s almost like a coolness factor when a company successfully creates a network effect for itself, and I’ve never seen that integrated into an antitrust claim before,” says Paul Swanson, a litigation partner at Holland & Hart LLP in Denver, Colorado, who focuses on technology and antitrust. “This is going to be an interesting case for antitrust law.”

Regardless, the DOJ’s complaint builds a powerful message from the cacophony of consumer voices that have vented frustrations with iMessage’s lack of interoperability in recent years. And it’s part of a broader, democratizing theme introduced by Jonathan Kanter, the assistant attorney general for the DOJ’s Antitrust Division, says Kovacic, who previously served as chair of the Federal Trade Commission. “Kanter basically said, ‘We’re trying to make this body of law accessible to ordinary human beings and take it away from the technicians,’” Kovacic says. “Storytelling is overstated in some ways, but my sense is that a lot of work went into this filing.”

Apple has rejected the DOJ’s allegations. In an earlier statement to WIRED, Apple spokesperson Fred Sainz said that the lawsuit “threatens who we are and the principles that set Apple products apart in fiercely competitive markets” and added that its products work “seamlessly” together and “protect people’s privacy and security.”

Cultural arguments about the harms of the iPhone’s stickiness will resonate with a lot of consumers, even if they end up being legally indefensible. Blue bubble vs. green bubble messaging has become a much more mainstream debate that transcends the wonky, technical underpinnings of iMessage’s protocol. Apple has also consistently boasted of iPhone and iMessage’s tight security, while seemingly denying third-party apps—such as Beeper—the ability to offer a similar level of security between iPhones and Android phones.

Apple has suggested that the design of iMessage is not anticompetitive, because iPhone users can install and use any third-party messaging app they please, as long as it’s available in the App Store. Apps like Facebook Messenger, WhatsApp, and Signal can all be installed on iPhones and give messages sent from users on Android or iPhone equal treatment.

The DOJ takes aim at that, too, saying that these other apps first require opt-in from consumers on both sides of a conversation because they form closed systems of their own. And the case points out that Apple hasn’t given app developers any technical means of accessing the iPhone messaging APIs that would allow SMS-like, cross-platform, “text to anyone” functions from those apps.

Swanson says he still believes Apple has been careful to take the necessary steps to legally preserve consumer choice, which is one of the fundamental principles in US antitrust law. “You probably can’t do sophisticated messaging on a T9 phone these days,” he says, referencing the predictive text system that dominated before the iPhone popularized touchscreens. “But there are plenty of other options in the market that won’t deprive you of a network effect.”

Kovacic believes that as the case continues, the DOJ will have to bring forward new evidence and arguments to stand up the cultural aspects of its suit. That could involve tapping theories of economics and the psychology of human behavior to attempt to explain why some technology consumers may unconsciously favor certain products they are emotionally attached to. More likely, he says, the DOJ will have to present contemporaneous business notes that show Apple’s anxiety about competitive apps or emerging technologies, and how the company responded in apparently dubious ways.

One way the DOJ tries to stand up its allegations is by comparing Apple to an earlier antitrust target: Microsoft. In a historic antitrust case filed in 1998, the DOJ presented evidence that Bill Gates’ company was fearful that software like the Netscape browser could weaken the market power of Windows, Kovacic says.

Steven Sinofsky, a former longtime Microsoft executive, wrote in a highly charged blog post on Saturday that he suspects many of the suit’s arguments about Apple’s products will prove to be irrelevant. “Almost all of the [DOJ-Apple] battles will end up being about the terms and conditions of contracts which is the stuff lawyers and courts are good at, and not on product design,” he wrote. “The vast majority of the settlement in the Microsoft case ended up being terms and conditions licensing Windows.”

In other words, the DOJ has shown some of its cards in this initial complaint—and told a story that will resonate with many frustrated smartphone users. But to keep the case alive the agency will have to present additional, concrete, evidence that Apple’s anxieties about its products being devalued led it to act in ways that caused actual harm. If the DOJ wants to make the case against Apple as historic as the one against Microsoft it will have to prove, as Kovacic puts it, “that the anecdotes aren’t just storytelling.”

Lauren Goode is a senior writer at WIRED covering consumer tech issues. She focuses on the intersection of new technologies and humanity, often through experiential or investigative personal essays. Her coverage areas include communications apps, trends in commerce, AR and VR, subscription services, data and device ownership, and how Silicon… Read more
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