Apple has been a dominant force in the smartphone industry for as long as it has existed. They’ve been the premiere smartphone brand and always lead in smartphone sales. However, The United States Department of Justice (the Justice Department) is attempting to sue Apple for monopolization of the smartphone industry.
The Justice Department said in a press release, “The complaint, filed in the U.S. District Court for the District of New Jersey, alleges that Apple illegally maintains a monopoly over smartphones by selectively imposing contractual restrictions on, and withholding critical access points from, developers. Apple undermines apps, products, and services that would otherwise make users less reliant on the iPhone, promote interoperability, and lower costs for consumers and developers.”
The Point sat down for an interview with Tom Bolinger, a Point Loma Nazarene University business law professor, about the lawsuit.
The Point: Apple restricted other tech companies or smartphone brands from certain technologies to make their smartphone most desirable. How would they enforce that and get away with it for so long?
Tom Bolinger: The easy answer is because they can. It would be similar to Volkswagen saying you can only use Volkswagen parts and you can’t put Ford parts and GM parts into a Volkswagen. Except, when we’re talking about Apple technology, it’s a little bit more than just a car you’re going to drive. It’s pretty much how you live your life, because so much of your life is wrapped up in either your laptop or your smartphone … but if a company chooses to make all of their technology inward-looking and only about themselves, that’s a philosophical decision they make. It’s only when that decision then squelches competition and intentionally moves the business, in this case Apple, toward being a monopoly; that’s when the feds, should the right administration be around, decide to step in.
TP: If this case is going to drag on for a few years as it’s expected to, do you believe Apple’s stock will fall or do you think the customers won’t really care?
TB: Given our tendency to focus very temporarily on various things in the 24-hour news cycle, this lawsuit is not going to be on the front pages. It’ll be on the back burner and nobody’s going to think about it and nobody’s going to care. There could be all types of other things that influence the price of Apple’s stock … any number of things could trigger that. But this is not going to be on the front pages because people don’t pay attention to that after a while … say this does go on for the next two or three years, that in and of itself, will not affect the price of Apple’s stock unless there is some type of game-changing revelation, which I doubt there will be.
TP: What’s the worst possible outcome for Apple?
TB: They’ll pay a boatload of money to the federal government and the federal government would probably say, “Okay, you have to refrain from various types of activities that are steering Apple toward being a monopoly.” They will try to regulate that somehow by saying you can and can’t do this, and that will be all on the negotiating table.
TP: If Apple is charged with all that the federal government wants to charge them with, do you think it will loosen the chokehold Apple has on the smartphone industry? Does it provide an opportunity for companies like Samsung and Motorola to take advantage?
TB: I think it all depends on what they end up negotiating. I don’t think the public will exercise a lot of influence or sway. They very rarely do, it’s mostly going to be settled in the back room, over the negotiating table. Like any other deal, Apple will concede a few things so the federal government looks like they’re a winner. At the same time, Apple’s not going to give away the store. They’re going to keep a lot of their power and a lot of it will be the same way it’s always been, in my opinion. But they’ll make some concessions.
TP: How, if at all, do you think this case is important or relevant to people like me, or college students in general?
TB: It might affect, in the long term, the price of the various goods you buy through Apple. It might, should you choose to bolt and go with Samsung, it might help Samsung’s business. It may even, in the best-case scenario, make it possible for us to be able to integrate and fuse together Samsung and Apple products. I’m not going to bet the farm on that, though.
