Color Me Confused
Examining the "Green Text" Litigation Against Apple
The federal government and several states combined forces to go after Apple earlier this year. They alleged violations of federal and state antitrust laws, focused on Apple’s market dominance and its efforts to create an ecosystem for users to remain in. Monopolies and other antitrust issues matter to consumers because they can lead to decreased competition and increased prices. But not every antitrust action truly defends consumers from these harms and hazards. Of the many dubious allegations, the plaintiffs alleged that Apple’s iMessage system is exclusionary and created a stigma around “Green Texts” (i.e. messages from non-Apple devices). This litigation is an example of a particular ideology gone too far and, in my opinion, bears little chance at success if it survives the pending motion to dismiss.
TL;DR:
The DOJ and numerous states are pursuing an antitrust lawsuit against Apple, alleging practices that stifle competition and illegally maintain market dominance. The claims include monopolistic control of the App Store, restrictive interoperability, iMessage-related “green text” stigma, cloud gaming limits, and ecosystem lock-in. These state and federal allegations are sure to be challenged on multiple levels, including potential jurisdictional issues. This case is an example of the shift towards more aggressive “New Brandeis” antitrust policies aimed at curbing corporate power. The article critiques the lawsuit as potentially overreaching and unlikely to meet the necessary legal thresholds. The outcome of Apple’s pending motion to dismiss will be pivotal.
Procedural History:
The case, United States of America, et al. v. Apple Inc., Docket Number 2:24-cv-04055-JXN-LDW (D.N.J.), involves the U.S. government (by and through the United States Department of Justice (DOJ)) and a coalition of states as plaintiffs against Apple Inc. The plaintiffs include Arizona, California, Connecticut, District of Columbia, Indiana, Maine, Massachusetts, Michigan, Minnesota, Nevada, New Hampshire, New Jersey, New York, North Dakota, Oklahoma, Oregon, Tennessee, Vermont, Washington, and Wisconsin. Some of the states (NJ, TN, and WI) added their own state-law violations to the Complaint.
The DOJ brought this antitrust action, as opposed to the Federal Trade Commission (FTC), on behalf of the federal government because it retains prosecutorial jurisdiction over the Sherman Antitrust Act and Clayton Act (15 U.S.C. §§ 1, et seq.; 12, et seq.), whereas the FTC, unsurprisingly, has purview over the Federal Trade Commission Act (15 U.S.C. § 49, et seq.). Both involve monopolies and other “antitrust”-like acts, just in different areas of the economy and with different consequences (e.g., the DOJ can pursue criminal charges for certain violations).
The Complaint was initially filed on March 21, 2024, alleging antitrust violations by Apple, including exclusionary practices, market control tactics, and stifling competition across various aspects of its ecosystem.
Key Filings:
- March 21, 2024: The Complaint was filed.
- May 21, 2024: Original deadline for Apple’s response, which was later extended.
- June 11, 2024: Plaintiffs filed a First Amended Complaint, adding additional state plaintiffs and specific claims under state laws.
- August 1, 2024: Apple filed a motion to dismiss the First Amended Complaint.
- November 20, 2024: Oral arguments on Apple’s motion to dismiss are scheduled.
The case has so far focused on procedural steps, including scheduling and briefings related to Apple’s motion to dismiss. Substantive proceedings on the merits of the allegations are pending.
Summary of the Charges against Apple:
1. Monopolistic Control of the App Store: The plaintiffs allege that Apple has used its control over the App Store to suppress competition, limiting the distribution of apps and controlling how developers can reach consumers. This includes imposing rules that restrict alternative payment methods and app distribution outside of Apple’s proprietary platform (First Amended Complaint, Paragraph 49, et seq.).
2. Interoperability Barriers: Apple is accused of creating technological barriers that disadvantage non-Apple products and platforms. This includes restrictive practices related to APIs, which limits the functionality of apps that could operate cross-platform or on non-Apple devices (Id. at 67, et seq.).
3. Messaging System Restrictions: The Complaint highlights Apple’s differentiation between iMessages (blue bubbles) and SMS texts (green bubbles) as a strategy to encourage users to remain within the Apple ecosystem. The plaintiffs argue that Apple degrades the messaging experience for non-iOS users by making cross-platform communication less seamless, which allegedly pressures users to stay with or switch to iPhones to avoid social stigmas associated with “green texts” (Id. at 90, et seq.).
4. Cloud Gaming Restrictions: Apple’s policies on its platform are claimed to limit the operation of cloud gaming services, thus stifling competition and consumer choice. The restrictions are said to maintain Apple’s dominance by curtailing services that could compete with or bypass the App Store (Id. at 102, et seq.).
5. Device Ecosystem Lock-in: The Complaint accuses Apple of using its ecosystem to lock consumers into its products. This includes the seamless integration between Apple’s hardware (iPhones, iPads, Macs) and software that is claimed to create a closed-loop system, making it difficult for consumers to switch to non-Apple devices without significant inconvenience (Id. at 115, et seq.).
6. Pricing and Market Power: Apple is also alleged to use its dominant market position to maintain high prices for its products, arguing that this power allows Apple to impose higher prices on consumers without significant competitive pressure (Id. at 140, et seq.).
Overall Nature of the Allegations:
The overarching theme of the Complaint is that Apple’s business practices are exclusionary and aimed at maintaining its monopoly in various markets, from app distribution to device interoperability. The charges claim these practices harm competition, reduce consumer choice, and entrench Apple’s market dominance.
Why This Doesn’t (Completely) Make Sense:
I understand that the DOJ and these states are concerned with excessive corporate power and control over a market. We should all be concerned by the prospect of one company dominating the vast majority of its given market. As the saying goes, "Power corrupts, absolute power corrupts absolutely." My problem with this case is that Apple seems to be the target of the federal and state governments to make an example of. Without an Answer yet, we don’t know exactly how Apple will respond but I presume any responses to the allegations will be summed up as either: “That’s not monopolistic” or “That’s what everyone does, we all want to retain our customers.” The “Green Text” issue only made up one paragraph of this lawsuit, but I believe that it's emblematic of the entire action: the DOJ is upset at how big and powerful Apple has become so it wants to crack down on them. Other tech companies are developing their own ‘ecosystems’ to compete with Apple, so why not rely on market competition to challenge Apple’s dominance instead of government intervention? Is this really an issue of what Apple has done or just how successful they've been? This is a far cry from classic antitrust actions like taking on Standard Oil (a real monopoly) and begs the question of what harm is being remedied or prevented by going after Apple like this. (1)
But to bring the conversation to a broader level, we should ask what the DOJ’s Antitrust Division (and the FTC, for that matter) is meant for: is it to punish the most successful and powerful companies in a given field? To block mergers that would create true monopolies? To break up cartels?
Antitrust theory and policy can be reduced to two extremes:
New Brandeis Movement: This modern antitrust perspective emphasizes that “Big Business = Bad,” prioritizing not just consumer welfare (e.g., low prices) but also broader considerations like market structure, political power, and the prevention of excessive corporate dominance. Advocates argue that monopolistic behaviors threaten competition, innovation, and democracy itself. They believe antitrust laws should be wielded more aggressively to dismantle or regulate large firms that consolidate market power, even if short-term consumer prices remain unaffected.
Chicago School: Rooted in the late 20th century, this approach maintains that “Excessive Regulation = Bad” and focuses on economic efficiency and consumer welfare, often measured by price and output. This school argues that market forces generally correct themselves and that government intervention should be minimal unless there is clear, demonstrable harm to consumers, such as price fixing or reduced output. Under this view, large size or dominance alone isn’t inherently problematic if it results from legitimate business practices that benefit consumers.
The New Brandeis Movement label has been ascribed to FTC Chair Lina Khan due to her “tough on business” rulemaking and litigation decisions (depending on who you ask. J.D. Vance likes her but Apple allegedly tried to get Jon Stewart to not interview her. (2)). While I’m unaware of the label being given to Attorney General Garland, it seems fitting in this case. And his remarks on this case seem to accord with the label too. “We allege that Apple has employed a strategy that relies on exclusionary, anticompetitive conduct that hurts both consumers and developers.” (3) Like many other debates, I think the answer here lies in the middle: we ought to be skeptical of excessive power at both governmental and corporate levels, but not so skeptical that we forsake common sense and critical thinking.
Other issues:
The state plaintiffs did not specify subject matter jurisdiction for their state law claims, which, while not strictly required, raises a potential issue. Federal courts primarily have jurisdiction over cases based on federal law or ‘diversity’ jurisdiction (cases between parties from different states to avoid any perceived home-court advantage). However, federal courts can also exercise ‘supplemental jurisdiction’ to hear state law claims that are closely related to the federal claims that form the basis for jurisdiction. In this case, the Amended Complaint does not mention 28 U.S.C. § 1367 (Supplemental Jurisdiction), which would permit this court to address related state and federal claims against Apple together, avoiding piecemeal litigation across different courts. Without clear subject matter jurisdiction (SMJ) for each claim, Apple could challenge the validity of any rulings on those state law claims. While this does not guarantee that the court would decline to exercise supplemental jurisdiction, it does provide Apple an opportunity to contest and potentially dismiss some or all of the state law claims. Moreover, if the federal claims are dismissed, that almost always results in the court declining supplemental jurisdiction because, by definition, there's nothing being supplemented.
Another issue that is required is the Twombly/Iqbal pleading standard. (4) In federal court, parties are required to plead matters with particularity and cannot rely on rote recitations or conclusory allegations. While “well-pleaded facts” are to be taken as true, legal conclusions disguised as facts are not. (Ibid.) Of note, the same state plaintiffs criticized above may face Twombly/Iqbal issues for their allegations (or lack thereof) in this matter. Each merely re-alleged and incorporated by reference (the lawyer version of copy-paste or, in this case, ⌘C - ⌘V) the federal government’s allegations, then cited their own state laws. The state plaintiffs need to show their work and connect the dots between the facts and statutes they cited. Without some explanation of how those re-alleged and incorporated facts bear upon those state laws, the state law claims could be challenged for failing to meet the pleading standards required by federal courts.
Final Thoughts:
In a previous article, I extended some support for the FTC’s rule to ban non-compete agreements. I think the DOJ and FTC both have a vital role in promoting competition and preventing the formation of real monopolies and other economically harmful enterprises. Moreover, I hope that Ms. Khan remains Chair of the FTC as the Executive undergoes its transition of power soon. There are merits to some of the New Brandeis Movement's and Chicago School's stances on these issues. We'll have to wait and see what the next wave of antitrust enforcement looks like. But this was the DOJ’s call, and this is one antitrust move that I’m happy to leave on ‘Read.’
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Citations:
(1) Standard Oil Co. v. United States, 221 U.S. 1, 31 S. Ct. 502 (1911).
(2) Klar, Rebecca. “Biden’s FTC Chief Is ‘Doing a Pretty Good Job,’ Republican Senator Says.” The Hill, 12 Sept. 2024,
https://thehill.com/policy/technology/4491363-vance-biden-ftc-chief-is-doing-a-pretty-good-job ;
“Jon Stewart Claims Apple Discouraged Interviewing FTC Chair Lina Khan.” NBC News, 2 Apr. 2024,
(3) Garland, Merrick B. “Attorney General Merrick B. Garland Delivers Remarks on Lawsuit Against Apple for Monopolizing Markets.” U.S. Department of Justice, 21 Mar. 2024, www.justice.gov/opa/speech/attorney-general-merrick-b-garland-delivers-remarks-lawsuit-against-apple-monopolizing.
(4) Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S. Ct. 1955 (2007); Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937 (2009).
