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I agree with the government that antitrust is important. That said, I would hate to see data privacy and security diminished just as we are trying to take advantage of AI’s power to be a personalized digital partner.
This week, the US Department of Justice along with sixteen states filed a significant antitrust case against Apple. The complaint accuses Apple of having a monopoly in high-end smartphones and employing five tactics to maintain that monopoly. Apple has supported these tactics with the rationale that prioritizing privacy and security makes the iPhone a trusted platform. The government disagrees, however, and claims Apple is effectively blocking competition and restricting choice and innovation for consumers in its antitrust lawsuit.
In this essay, I’ll cover the basics of the complaint and then speculate about how to think about these issues in the emerging age of AI.
Having a monopoly is not illegal, and neither is anticompetitive behavior. But having a monopoly and maintaining that monopoly through anticompetitive behavior is. The first step in the government’s case will be proving that Apple has a monopoly.
In the late 1990s, as part of my job as a Microsoft analyst at Morgan Stanley, I watched the Microsoft antitrust trial from within the courtroom. I remember the effort the government had to put in to prove that Microsoft’s 95% market share in operating systems represented a monopoly. It seems to me that the government has a much harder challenge, proving that Apple’s 65% marketshare in high-end smartphones represents a monopoly—especially when its marketshare is only 23% worldwide.
The government then has to prove that Apple maintains that monopoly through anticompetitive behavior. The complaint lists five accusations:
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