Apple Litigator Walsh Mauls DOJ in Motion to Dismiss

May 21, 2024

Though not as flashy as FTC Chair Lina Khan, Department of Justice antitrust chief Jonathan Kanter is just as anxious as his young colleague to use regulatory power and lawfare to expand antitrust law to control lawful businesses.

This agenda was exposed today when Apple litigator Lisa Walsh made an air-tight case that Kanter’s filing is missing three necessary legs – his complaint does not allege anticompetitive conduct, or prove substantial anticompetitive effects, or demonstrate monopoly power in any relevant market. Her motion to dismiss is a masterpiece of using facts, logic, and law the way characters in Peaky Blinders employed their flat razor caps.

Kanter and DOJ maintain that Apple’s decisions about the features and functionalities for developers of “super apps” (simply put, multifunctional apps), cloud-streaming apps, messaging apps, smartwatches, and digital wallets access on the iPhone is an antitrust violation. This charge is stillborn, Walsh demonstrates, because “the Supreme Court has made clear that a firm’s decisions about the terms on which it chooses to deal with third parties do not constitute exclusionary conduct under Section 2 of the Sherman Act.” This is not an arcane argument, but one that rests on foundational opinions like Verizon v. Trinko. Or consider PacBell v. linkLine, in which the high Court found that: “As a general rule, businesses are free to choose the parties with whom they will deal, as well as the prices, terms, and conditions of that dealing.”

Efforts by Kanter and DOJ to compare Apple to Microsoft in the 1990s also fail. Microsoft held 95 percent of the global market in operating systems. And it used its power to restrict third-party activities outside of its platform. Apple shares the U.S. and world markets with Samsung, Google, and Motorola, and does not restrict third parties’ ability to deal with competitors.

Walsh then strikes at the heart of the complaint’s flaws, showing that DOJ “cannot combine a series of lawful practices to invent an antitrust claim where none exists.” She demonstrates that the government’s market definitions are “legally disconnected from the challenged conduct.” The charges and the markets must connect. In DOJ’s filing, they do not.

Any one of these points should be a fatal blow to DOJ’s filing. The final blow is that Apple simply does not wield monopoly power in smartphone markets. Walsh writes: “This Court should reject the invitation to forge a new theory of antitrust liability that no court has recognized, that would harm innovation, and that would only deprive consumers of the key competitive features that make iPhone distinctive.”

Walsh did forget one thing. She should have ended her motion with a mic drop.