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Antitrust Lawsuit Against Apple and the Comparison to Microsoft Case

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

The market for the iPhone today looks very different from the near-monopoly enjoyed by Microsoft’s Windows operating system two decades ago, and the government as a result may face a tougher time in taking on Apple, legal experts said.

The Department of Justice, along with 15 state governments, accused Apple of unlawfully monopolizing the smartphone market through restrictions on app developers that curb choice and innovation, which it said forces consumers to pay higher prices.

Apple said the government is wrong on the facts and law.

The government has to prove that AppleÔÇÖs business practices were ÔÇ£exclusionaryÔÇØ and harmed consumers by degrading the quality of rival products, according to several legal experts.

The government accused Apple of suppressing technologies that would have increased competition among smartphones in five areas: so-called “super apps,” cloud streamed gaming apps, messaging apps, smartwatches and digital wallets.

One example the government gave is familiar to anyone who texts from an iPhone to a user of an Android phone ÔÇö the dreaded “green bubble” that results in hindrances such as grainy photos sent by text that don’t apply when texting between two phones using Apple’s iOS operating system.

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

By comparison, Microsoft was accused of abusing its market dominance to impede users from freely installing software on computers using the companyÔÇÖs operating system.

That might sound similar to Apple’s control over the app store, but legal experts said there are important differences.

Apple can contract with whom it wants and design products as it sees fit, legal experts said.

It becomes a problem when a company with monopoly power takes steps to lessen short-term profit in order to keep rivals out in the longer term, said Douglas Ross, an antitrust scholar at University of WashingtonÔÇÖs law school.

ÔÇ£The fundamental assumption DOJ seems to have is that Apple must cooperate with its rivals to allow rivals to compete with Apple,” Ross said. “That has antitrust law backwards.”

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