April 19, 2024
DOJ Targets Apple Over Alleged 'Shapeshifting' Rules Affecting Crypto Apps in Lawsuit
Policy & Regulation

DOJ Targets Apple Over Alleged ‘Shapeshifting’ Rules Affecting Crypto Apps in Lawsuit

The United States Department of Justice (DOJ) has launched an extensive antitrust lawsuit against tech giant Apple, alleging that its app market rules and perceived monopoly have stifled competition and innovation.

Supported by 16 state attorney generals, the complaint filed on March 21 in a New Jersey federal court accuses Apple of exploiting its dominance in the smartphone market to compel developers to use its payment system, thus locking in both developers and users on its platform.

Allegations of Monopoly and Anticompetitive Behavior

The DOJ contends that Apple’s App Store guidelines and developer agreements impose restrictive rules that enable the company to charge higher fees, hinder innovation, and limit user experience.

The lawsuit claims that Apple’s policies have marginalized alternative payment systems and restricted the integration of cryptocurrencies in apps, contributing to a lack of functionality for crypto-based applications on iOS devices.

Impact on Crypto-based Apps

The DOJ’s complaint suggests that Apple’s anticompetitive practices affect the smartphone market and have ramifications for industries like financial services.

The 30% fee imposed by Apple on apps and in-app payments and its fiat-compatible payment systems have hindered the adoption of cryptocurrencies in apps and made it economically unviable for crypto-based apps to offer in-app purchases.

Furthermore, the lawsuit accuses Apple of enforcing its App Store rules arbitrarily and penalizing developers who seek to innovate or challenge the company’s monopoly power.

Some nonfungible token (NFT) marketplaces and Bitcoin-friendly apps have faced restrictions or removal from the App Store due to their non-compliance with Apple’s payment policies.

Apple’s Response and Legal Defense

An Apple spokesperson has refuted the DOJ’s allegations, stating that the complaint is “wrong on the facts and the law,” and that the company will vigorously defend itself.

Apple argues that the lawsuit sets a dangerous precedent and could grant the government undue control over technology design. The company’s shares fell by 4% following the announcement of the lawsuit.

While facing scrutiny in the United States, Apple has also encountered regulatory challenges in the European Union. The Digital Markets Act has compelled Apple to offer alternative browser engines, payment functions, and app stores, although the company maintains an approval process to safeguard user privacy and security.

In conclusion, the DOJ’s antitrust lawsuit against Apple reflects growing concerns over the company’s market dominance and its impact on competition and innovation within the app ecosystem. The outcome of this legal battle could have significant implications for both Apple and the broader technology industry.

Apple shares on March 21 fell after the DOJ lodged its lawsuit. Source: Google Finance

Image: Wallpapers.com

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