Newsletter
Yesterday, the United States Department of Justice (DOJ) filed an expansive antitrust lawsuit against Apple. It accused the company of engaging in anticompetitive business practices to gain an illegal monopoly in the smartphone market. According to the DOJ, Apple strategically positioned many products and services to drive out competition. Among those is its infotainment system, CarPlay.
DOJ says CarPlay allowed Apple to drive out competition
The 88-page official complaint, filed by the DOJ and 16 state and district attorneys general, says infotainment systems have become must-have capabilities in cars. Apple’s CarPlay is one of the leading names in this industry. It enables a car’s built-in display to serve as a display for the iPhone, allowing drivers to use their iPhones to control maps and entertainment in their cars.
The DOJ alleges that Apple applies the same restriction system as the iPhone to CarPlay. “Apple further locks in the power of the iPhone by preventing the development of other disintermediating technologies that interoperate with the phone but reside off the device,” the complaint states. The DOJ is particularly concerned about the next version of CarPlay, which can “take over” your car.
“Apple has told automakers that the next generation of Apple CarPlay will take over all of the screens, sensors, and gauges in a car, forcing users to experience driving as an iPhone-centric experience if they want to use any of the features provided by CarPlay,” the lawsuit says. “Here too, Apple leverages its iPhone user base to exert more power over its trading partners, including American carmakers, in future innovation.”
This may sound scary but not entirely true. While CarPlay will gain the ability to interact with system displays, sensors, and gauges, carmakers don’t necessarily have to allow a complete takeover. They still need to sell the car with a basic software interface to control the system. After all, the car must function properly without CarPlay or even a phone. When connected, Apple’s software will be laid over the system software.
DOJ may be concerned about the planned deeper integration
The DOJ’s view on the next version of Apple CarPlay may be misleading, but it may have genuine concerns about the planned deeper integration. It likely believes that Apple is trying to give you an in-car infotainment experience based on the iPhone, not the car itself. No matter which car you drive, you will get the same infotainment experience. The DOJ may see this as an anticompetitive move that can stifle innovation.
The Justice Department also targeted Apple’s business practices around digital keys. The company requires developers to add digital keys developed for their own apps to Apple Wallet. The DOJ says this increases a user’s dependence on Apple and the iPhone whenever they use their car. It also “decreases the incentives of automakers to innovate because automakers are forced to share data with Apple.”
This may be a long battle between the American lawmakers and Apple. The company has already labeled the lawsuit “wrong on the facts and the law.” The Cupertino-base technology giant says it is prepared to defend vigorously. Time will tell whether it can disprove all accusations from the DOJ. If the latter wins its CarPlay argument, expect some changes in the car infotainment industry.