Bad Apple or sore losers?

This week we learned that Apple is bad and needs to be punished. That's the conclusion of the US Department of Justice (DOJ) and 15 states (and the District of Columbia - to be exact) in a lawsuit where they are accusing Apple of 'anticompetitive and exclusionary conduct and alleviate harm to competition'.

The complaint is a mix of hyperboles, logical inconsistencies and facts deserving further discussion and evaluation.

A few examples:

• 'Apple has built a dominant iPhone platform and ecosystem that has driven the company's astronomical valuation.' and 'Rather than respond to competitive threats by offering lower smartphone prices ...'
  
  If I read this correctly then Apple has been hugely successful but it didn't follow a government-mandated process by lowering prices to help its competitors to better compete.
  
  By contrast, this government competition framework was followed by Tesla, which in the face of competition lowered prices and damaged its brand ... and didn't do much to increase sales. Not to mention the profit evaporation. To quote Mr. Warren Buffet 'If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business. And if you have to have a prayer session before raising the price by 10 percent, then you’ve got a terrible business.'
   

• Apple's 'Innovative design and savvy marketing had not been enough to drive a successful business strategy'. As we read further, it was the 'path-clearing antitrust enforcement case brought by DOJ against Microsoft'. To top it off, there was the 'Licensing agreement with the major music labels.’
  
  Apple's sin is that the company thought hard about strategy, mapped the current market dominated by others and devised tactics on how to execute on that strategy.
  
  A reminder that all that happened during the time where Apple was on the brink of bankruptcy and propped up by Mr. Bill Gates to the tunes of millions of dollars. In the thinking of the DOJ, it wasn't Apple’s hard work that made them a winner again. It was the hard work of the DOJ which cleared the path for Apple to succeed.
  

• After launching the iPod, Apple launched the iPhone where 'Apple quickly realized the enormous value of developers'
  
  The DOJ is probably not aware of the famous speech by Mr. Balmer, then the CEO of Microsoft. Perhaps going to business school and learning about strategy and various business models would spare people at DOJ from these conclusions.

As a side note, what the Complaint doesn't mention is the fact that when Apple launched the iPhone it was dismissed by the behemoths of the phone world at that time - Nokia, Motorola and Blackberry, and laughed off by the same Mr. Balmer. All the mentioned companies were selling millions and millions of phones.

All in all, after all the listed sins, the Plaintiff is asking the Court to agree with the Plaintiff and 'Enter relief as needed to cure any anticompetitive harm', restore competition and 'Enter any additional relief the Court finds just and proper'.

This court case will go through the court system for many years. Any verdict will be appealed. Even if the DOJ wins and the Court prescribes any remedies, the world will move on and any punishment will feel almost laughable. If history provides an example, the DOJ lawsuit against Microsoft banned the company from integrating its browser at that time, Explorer, into Windows. While this case was before the Court, Netscape ceased to exist and when the case was over nobody really knew what the fuss was about.

Yes, the role of the government is to create rules which should create an even playing field, but somehow it appears that these lawsuits are always coming too late. That’s especially true within the tech sector. Any company from the past which at that time was so big that could be labeled as monopoly, eventually disintegrated under its own weight or was taken over by competition which came from the left field. No need for help from the government.

Maybe the future efforts should be targeted at standardization and defined interoperability among technology on the market. That’s better than complaining that text messages between iPhone users are blue, while messages from other messaging platforms are green (on page 38 of the Complaint. No, I’m not making this up).

Company longevity is always built with sound strategy and hard work. Just ask the people at Kongō Gumi.

The recurrent pattern? Apple failed in the past. Apple will fail in the future. And the innovation will happen without the DOJ. It always does.


PS: How many of the people working for the Plaintiffs own iPhones vs. how many own Android phones?