It’s no secret that Apple products work best if you stick to your iPhone. As it turns out, that’s a big reason why Apple is in trouble today with the U.S. Department of Justice, which accuses the company of going too far in locking down messaging, smartwatches, and digital wallets and deliberately hindering its competitors.
To most consumers, this isn’t surprising. We’ve known about the green bubble for years, and the fact that you can’t bring an Apple Watch to an Android phone. The U.S. Department of Justice means that, overall, this series of protective policies makes it difficult for iPhone users to leave their walled gardens, restricts competition, and violates the law.
messaging
Green bubbles feature prominently in litigation. The texting experience between iOS and Android users is notoriously poor: you can’t send large files or photos, edit messages, or send funny reactions like hearts or thumbs up. This friction has led to social pressure for people to continue using iPhones, with the Justice Department citing these exclusions as a “barrier”[s] Offering iPhone families the opportunity to give their children an Android phone. This is especially true for U.S. teenagers, 85% of whom use iPhones. The lawsuit notes that Apple is well aware of the problem, citing Apple executives as saying that “moving iMessage to Android will hurt us more than help us.” ” (Tim Cook told customers to “buy your mom an iPhone” to improve their text messaging, and the Justice Department didn’t take kindly to it.)
The Justice Department said this misled consumers into thinking Android phones were worse, even though Apple was the one imposing all the restrictions.
The U.S. Department of Justice also pointed out that Apple has restricted third-party messaging applications such as WhatsApp, Signal and Facebook Messenger compared to iMessage. For example, you have to dig into permissions to let these apps run in the background or access your iPhone’s camera for video calls. They also can’t contain text messages, which means you’ll have to convince a friend to download the same app if you want to use them. However, iMessage can do it all on its own.
Although Apple recently agreed to support RCS to improve cross-platform messaging, the Justice Department isn’t buying it. It notes that not only has Apple not yet adopted it, but third-party apps will still be “prohibited from integrating RCS, just as they are prohibited from integrating SMS.” The U.S. Department of Justice also questioned the fact that Apple only agreed to adopt the 2019 version of RCS. Unless Apple agrees to support future versions, “RCS will soon be broken on iPhone anyway.”
smart watch
The U.S. Department of Justice is unhappy with how Apple is using the Apple Watch as a cudgel to continue using the iPhone.As things stand, you must You must have an iPhone to use Apple Watch. and Apple restricts third-party smartwatches from doing everything the Apple Watch can do.
The Apple Watch isn’t cheap, and the Justice Department noted that Apple is well aware that people are less likely to replace their phones once they buy them. But most importantly, it cites the fact that third-party smartwatches miss out on features like quickly replying to text messages, accepting calendar invitations, and interacting with app reminders in the same way as the Apple Watch.
Another issue is Bluetooth connectivity. If a user accidentally turns off Bluetooth on their iPhone, the Apple Watch can stay connected, but third-party watches cannot. As with third-party messaging apps, users must dig into separate permissions to turn on background app refresh and turn off low-power mode if they want the most stable and consistent Bluetooth connection. This affects passive updates such as weather or sports tracking.
Cellular connectivity is another way Apple is limiting third-party watches. There are no obstacles to using the same number on Apple Watch and iPhone. However, if you want to use a third-party cellular watch to do this, you’ll have to disable iMessage on your iPhone. Since most iPhone users are unwilling to do this, this effectively means that opting for a third-party watch means you have to use two separate numbers for the watch and iPhone.
digital wallet
Regarding digital wallets, the U.S. Department of Justice’s dissatisfaction with Apple is that the company prevents financial institutions from accessing the NFC hardware inside the iPhone. (Thanks to new EU regulations, though, Apple will start allowing use in most of Europe.) This in turn limits their ability to offer tap-to-pay functionality and once again introduces iPhone users to Apple Pay and Apple Wallet.
Doing so means banks will also have to pay a 0.15% fee on every credit card transaction made through Apple Pay. Instead, it’s free for banks using the Samsung or Google Pay apps. According to a report by the U.S. Consumer Financial Protection Bureau, Apple’s transaction volume in the United States in 2022 will be close to $200 billion. The agency estimates that digital wallet click-to-pay transactions will increase by more than 150% by 2028.
The U.S. Department of Justice once again asserted that it is feasible for Apple to enable tap and pay, but it will not because it would “be a way to disable the payment function.” [A]people [P]ay trivial” and encourage other types of payment apps. It also noted that Apple already allows merchants to accept Apple Pay payments using NFC.
Apple said it disagrees with the Justice Department’s lawsuit and views all of these decisions as choices it makes to protect consumers, particularly regarding privacy and security. Apple spokesman Fred Sainz said in a statement that the lawsuit “threatens our identity and the principles that make Apple products stand out in a fiercely competitive marketplace.”
The U.S. Department of Justice does not believe that these principles are intended to improve the iPhone, but are intended to restrict competitors in order to increase the stickiness of the iPhone. While it may be a while before there are any concrete solutions, in the end, Apple’s walled garden approach may no longer be as effective as it once was.