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Apple, Google risk antitrust fines or breakup.

TraderKnows
TraderKnows
03-25

Apple faces a new antitrust lawsuit from the U.S. Department of Justice and others, persisting in behavior despite past controversies.

Recently, the U.S. Department of Justice, along with attorneys general from 15 states and the District of Columbia, filed an antitrust lawsuit against Apple, accusing it of violating Section 2 of the Sherman Antitrust Act. This law primarily aims to limit the power of monopolistic companies, outlining that "Every person who monopolizes or attempts to monopolize, or combines or conspires with any other person to monopolize interstate or foreign commerce and trade, is committing a serious crime."

Monopolization is the most profitable strategy for any industry, making most companies strive for it through acquisitions and developments. However, monopolies are generally more detrimental than beneficial to the market and the nation, leading most countries and regions to enact antitrust laws.

Still, many companies choose to lean towards monopolization for profit, although not achieving an absolute monopoly in a certain industry or food market, but in essence, forming a de facto monopoly through speech dominance, technological barriers, and artificially erected obstacles.

Among these companies, Apple is undoubtedly a classic example. As a world-leading tech company, they use a closed IOS system for their phones, requiring users to download new applications through their App Store, and any developer wishing to enter the App Store must pass Apple's review and inspection, with all revenues generated in the App Store having to be shared with Apple.

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Although Apple has not mandated that all users can only use Apple electronic products, nor that application developers can only launch on the IOS platform, in reality, they have used the IOS platform's thresholds to prevent the entry of external applications, creating a unique small circle, which is what is often referred to in the internet industry as a "Walled Garden," a closed ecosystem within a small circle.

The "Walled Garden" is not unique to Apple; other internet giants like Google are also trying to build their own internet gardens, a practice essentially equivalent to monopolization. This has undoubtedly attracted the attention of relevant departments, with Apple having been warned and penalized by several countries and regions for monopolistic practices multiple times.

In March this year, a new EU law came into effect, requiring Apple to allow users to download applications from third-party app stores to meet the requirements of the EU Digital Markets Act (DMA). Earlier, Apple had been penalized several times for forcing users to use proprietary charging ports and for selling products without including chargers, requiring customers to make additional purchases.

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On March 21, U.S. Attorney General Merrick Garland revealed that Apple's domestic market share in the United States had reached 65%, which essentially constitutes a monopoly. Although Apple countered by saying their market is global, and their worldwide market share of only 20% does not constitute a monopoly, this rebuttal was not widely accepted. Amid the antitrust controversy, Apple's stock price fell sharply, dropping over 4% on March 21 alone, evaporating more than $110 billion in market value.

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