US sues Apple in antitrust complaint

As the case moves forward, expect Apple to challenge a vital component of the government’s lawsuit: How it defines the markets that Apple has allegedly monopolized.

The US government claims Apple has monopolized two distinct markets: A market for smartphones, and a separate market for “performance smartphones.”

Market definitions are critically important for antitrust lawsuits, because the courts can only rule on illegal monopolization claims with respect to specific, well-defined geographic and product markets.

The Justice Department describes “performance smartphones” as phones that are made with premium materials such as metal and glass; boast faster and better processors, or bigger storage sizes; and have advanced communications tech inside such as tap-to-pay chips. Performance of smartphones is different from basic, entry-level devices that don’t have these same features, according to the complaint.

Defining the market this way allows the DOJ to make specific claims about Apple’s market share.

“Apple’s share of the US performance smartphone market exceeds 70% and its share of the entire US smartphone market exceeds 65%,” Attorney General Merrick Garland said at a press conference.

Apple, for its part, accused the DOJ of using the wrong frame of reference, telling reporters Thursday the market for smartphones is global, not restricted to the US, and that by this measure Apple’s marketshare is closer to 20%.