Why the Apple Case Is No Microsoft

June 4, 2024

The Department of Justice’s landmark antitrust case against Microsoft demonstrates the classic behavior that justifies an antitrust lawsuit. How does Jonathan Kanter’s DOJ Antitrust Division case against Apple stack up against that big precedential case of Microsoft?

A little nostalgia creeps in for me when thinking about United States v. Microsoft. My father, the late Judge Robert Bork, is occasionally misremembered by progressive commentators as being opposed to antitrust enforcement. Some forget that in 1998 Judge Bork weighed in on the side of antitrust enforcement against Microsoft.

At that time, Microsoft enjoyed a 95 percent monopoly on the PC operating systems market. It aggressively pressured developers not to work on competing scripts like Java.

“You have the monopoly,” Judge Bork said on a Sunday morning talk show at the time. “You have the expressed intent to stifle competition. You have the practices which are not necessary for consumers but do crush rivals.” The courts mostly agreed. They found Microsoft partially in violation of Section 2 of the Sherman Antitrust Act (though the case eventually ended in a settlement in which Microsoft agreed to reform its business practices).

In a similar way, Apple is accused of structuring its iPhone in a way that also violates Section 2. But the comparison to Microsoft turns out to be, well, Apples and oranges.

Thom Lambert, AEP Advisory Board member and professor at the University of Missouri School of Law, in a rich discussion sponsored by George Mason University’s Antonin Scalia School of Law on Tuesday, noted that Apple has nowhere near Microsoft’s 95 percent market share. Apple today faces monster competitors like Android and Samsung in the smartphone market.

“Apple is not excluding rivals from anything other than access to its own platforms,” Lambert said. This amounts, in DOJ’s view, to “self-preferencing.” Yet “self-preferencing” is not a recognized liability under Section 2.

DOJ’s complaint also alleges that Apple “wraps itself in a cloak of privacy, security, and consumer preferences to justify its anticompetitive conduct.” Apple is valued by customers for its superior treatment of privacy and security. DOJ will make the case that Apple’s privacy concerns are applied selectively to Apple’s benefit. Expect the government to riffle through Apple documents to cherry-pick emails in an attempt to demonstrate that privacy is not Apple’s primary concern.

This will still be a hard case to make. Apple’s privacy and security features are a clear advantage. “It doesn’t make sense to force Apple to be a privacy maximalist,” said Erika M. Douglas, Temple University Beasley School of Law.

But expect DOJ to try to do just that. This case is vital to progressive antitrust because Kanter & Co. are trying to do more than just humble another Big Tech company. They are trying to use the Apple case to expand antitrust enforcement through judicial action. If they can punish a vertically integrated company on a novel legal theory not previously recognized by the courts, antitrust law will be expanded beyond statutory limits and regulatory history.

A case like the one against Apple shows how under progressive theory efficient companies could be punished for meeting the demands of consumers. But it also shows how new law could get written and enacted by the courts, without any need for a Congress.