AG Garland Announces Sweeping Antitrust Lawsuit Against Apple for ‘Unlawful, Exclusionary Behavior’ — Specifically Calls Out ‘Green Bubble’ Issue

Attorney General Merrick Garland announced on Thursday a sweeping antitrust lawsuit against Apple, accusing the tech giant of engaging in monopolistic behaviors in the smartphone market, specifically calling out the infamous “green bubble” issue that stigmatizes Android text messages sent to iPhone users.

The civil lawsuit was filed against Apple in the U.S. District Court for the District of New Jersey by the Department of Justice along with sixteen other state and district attorneys general, for violations of Section 2 of the Sherman Act, according to a DOJ press release.

Garland held a televised presser Thursday morning to announce the lawsuit, noting that Apple was “one of the most valuable public companies in the world,” and “its net income exceeds the individual gross domestic product of more than 100 countries…in large part due to the success of the iPhone.”

Apple dominates the smartphone market, Garland continued, exceeding 70% of the U.S. performance smartphone market and exceeding 65% of the entire U.S. market, despite charging as much as nearly $1,600 for an iPhone.

“As our complaint alleges, Apple has maintained monopoly power in the smartphone market, not simply by staying ahead of the competition on the merits but by violating federal antitrust law,” said Garland. “Consumers should not have to pay higher prices because companies break the law.”

Garland then described the “exclusionary anti-competitive conduct” of Apple’s strategy that the DOJ alleged “hurts both consumers and developers,” resulting in “fewer choices, higher prices and fees, lower quality smartphones, apps, and accessories, and less innovation from Apple and its competitors.”

The complaint also alleges “Apple has consolidated its monopoly power, not by making its own products better but by making other products worse,” the attorney general said, including restrictions on non-Apple apps and accessories, and he specifically called out the “green bubble” issue:

As any iPhone user who has ever seen a green text message or received a tiny grainy video can attest, Apple’s anti-competitive conduct also includes making it more difficult for iPhone users to message with users of non-Apple products. It does this by diminishing the functionality of its own messaging app, and by diminishing the functionality of third party messaging apps. By doing so, Apple knowingly and deliberately degrades quality, privacy, and security for its users.

For example, if an iPhone user messages a non-iPhone user in Apple messages, the text appears not only as a green bubble, but incorporates limited functionality. The conversation is not encrypted. Videos are pixelated and grainy and users cannot edit messages or see typing indicators.

As a result, iPhone users perceive rival smartphones as being lower quality because the experience of messaging friends and family who do not own iPhones is worse, even though Apple is the one responsible for breaking cross-platform messaging — and it does so intentionally. For example, in 2013, a senior executive at Apple explain that supporting cross-platform messaging in Apple messages quote “would simply serve to remove an obstacle to iPhone families giving their kids Android phones,” close quote.

In 2022, Apple’s CEO was asked whether Apple would fix iPhone to Android messaging. The questionnaire added, quote, “not to make it personal, but I can’t send my mom certain videos,” close quote. Apple CEO responded, “buy your mom an iPhone.”

Garland also spelled out the DOJ’s allegations about Apple violating antitrust law with its restrictions on app functionality for Apple Watches and digital wallets, with technological barriers “that make it extremely difficult and expensive” for iPhone users to use non-Apple smartwatches or third-party digital payment apps, denying them access to “tap-to-pay” functionality and demanding additional disclosures of personal financial information, thereby “introduc[ing] an additional potential point of failure for the privacy and security of Apple users…Apple is willing to make the iPhone less secure and less private in order to maintain its monopoly power.”

Apple’s monopoly power, Garland concluded, was acquired and maintained “not because it has a superior product or superior business acumen, but by engaging in exclusionary conduct”:

As set out in our complaint, Apple has maintained its power, not because of its superiority, because of its unlawful exclusionary behavior. Monopolies like Apple’s threaten the free and fair markets upon which our economy is based. They stifle innovation. They hurt producers and workers and they increase costs for consumers.

If left unchallenged, Apple will only continue to strengthen its smartphone monopoly. But there’s a law for that. The justice department will vigorously enforce antitrust law. Enforcing the law protects consumers from higher prices and fewer choices.

That is the Justice Department’s legal obligation. That is what the American people expect. That is what they deserve. I am grateful for the attorneys and staff of the Department’s anti-trust division, for their tireless work on this case on behalf of the American people.

Watch the clip above via CNN.

Read the DOJ’s complaint here.

This article has been updated.