The U.S. government’s antitrust lawsuit against Apple draws on the watershed 1998 case that broke Microsoft’s monopoly on desktop software, but it may prove to be an imperfect blueprint for solving smartphone competition problems.

Legal experts say the iPhone market today looks very different from the near-monopoly enjoyed by Microsoft’s Windows operating system two decades ago, so governments may have a tougher time taking on Apple.

The U.S. Department of Justice joins 15 state governments in accusing Apple of illegally monopolizing the smartphone market by limiting choice and innovation by restricting app developers, which it says forces consumers to pay higher prices.

Apple said the government was wrong on both facts and law.

Several legal experts said the government must prove that Apple’s business practices were “exclusionary” and harmed consumers by lowering the quality of competitors’ products.

The government accuses Apple of suppressing technology that could fuel competition in smartphones in five areas: so-called “super apps,” cloud streaming game apps, messaging apps, smartwatches and digital wallets.

The government gave an example that will be familiar to anyone who’s texted from an iPhone to an Android phone user – the dreaded “green bubble” that causes snags like grainy photos sent via text, which doesn’t work on either phone This does not apply when sending text messages to each other. Apple’s iOS operating system.

Antitrust enforcers say Apple is rapidly expanding its influence and power in industries including content creation and financial services.

In contrast, Microsoft has been accused of abusing its market dominance by preventing users from freely installing software on computers using the company’s operating system.

This may sound similar to Apple’s control of the App Store, but legal experts say there are important differences.

Legal experts say Apple can sign contracts with who it wants and design products as it sees fit.

It becomes a problem when a company with monopoly power takes steps to reduce short-term profits to exclude competitors, said Douglas Ross, an antitrust scholar at the University of Washington School of Law.

“The DOJ’s underlying assumption appears to be that Apple must cooperate with its competitors in order to allow competitors to compete with Apple. This sets antitrust laws back,” Ross said.

market share

Microsoft was forced to open up its operating system because it controlled 95% of desktop operating systems in the 1990s. By comparison, Apple held 55% of the North American smartphone market in terms of shipments as of the end of September, with most of the remainder being phones using Google’s Android operating system, according to market analysis firm Canalys.

The Justice Department sought to define the market as the U.S. smartphone market. Apple representatives said they would work to persuade the court to define the market as a global smartphone market.

Canalys data shows that Apple and rival Samsung Electronics each accounted for about 20% of the global market share in 2023, although Apple slightly edged Samsung in terms of shipments.

Ross said Microsoft “is clearly a monopoly and has no effective competitor in the PC operating system space.” Android, on the other hand, “is extremely popular, especially in other parts of the world, and is a very effective competitor to iOS.”

Ross predicted that it would be more difficult for the Justice Department to win against Apple than against Microsoft.

Some of the charges have been raised in court before.

In 2021, in an antitrust case brought by “Fortnite” creator Epic Games, a federal judge found after trial that Epic failed to prove that Apple users were “locked” to iPhones and would not switch to Android devices.

Of course, government lawyers knew of these discrepancies and still filed suit.

Legal experts say that reflects views within the Justice Department and the Biden administration’s Federal Trade Commission on challenging cases.

“They’re happy to take the risk of a really big case,” said Patrick McGahan, a plaintiffs’ attorney whose firm is involved in the lawsuit against Apple.

Washington litigator Melissa Maxman said the Microsoft case changed the tech landscape and praised the government’s lawsuit as a step toward greater competition in the smartphone market.

“If you open the market to other competitors, you’ll see prices go down and quality go up,” Maxman said. “That’s exactly what Microsoft said – and guess what, it’s true.”