Apple Faces Major Antitrust Lawsuit Over App Store Monopoly Claims

The lawsuit accuses Apple of stifling competition and innovation in the app market, especially when it comes to crypto app development.

The U.S. Department of Justice, supported by 16 state attorney generals, filed an antitrust lawsuit against Apple, accusing it of exploiting its dominant position in the app market to stifle competition and innovation, especially when it comes to crypto-based apps. Meanwhile, the legal battle over Terraform Labs co-founder Do Kwon's extradition continues, with Montenegrin prosecutors asking for the Supreme Court's intervention. Additionally, Irina Dilkinska, the former legal head of the infamous OneCoin scheme, is asking for leniency in her sentencing, aiming for time served.

Apple in Hot Water

The United States Department of Justice, alongside 16 state attorney generals, started a major antitrust lawsuit against Apple, accusing the tech behemoth of using its app market dominance to stifle competition and inhibit innovation. The lawsuit, which was filed on Mar. 21, points out that Apple's monopolistic grip over the smartphone market pushes developers into using its payment system, thereby ensnaring both developers and users in its ecosystem.

The lawsuit charges Apple with implementing a number of capricious rules and restrictions through its App Store guidelines and developer agreements. These measures allegedly allow Apple to levy excessive fees, curb innovation, compromise user experience, and suppress competitive alternatives. This has especially had an impact on the functionality of crypto-based apps on iOS devices.

However, a focal point of the DOJ's allegations is the controversial 30% commission—which is referred to as the "Apple tax"—that Apple imposes on app and in-app purchases. This policy, which only accommodates fiat transactions, effectively excludes or diminishes the feasibility of incorporating crypto transactions in apps. Despite offering some enterprise and public sector customers the option to distribute their apps through custom app stores, Apple restricts iPhone users and developers from accessing or creating alternative app marketplaces that could actually compete with its fees.

The lawsuit also criticizes Apple's random enforcement of its App Store rules, which apparently targets developers that make use of technologies that are potentially disruptive to Apple's market dominance. Moreover, Apple's mandate that all iOS web browsers use its WebKit engine extends its control to web apps, which only ends up limiting competition and innovation even more.

Responding to these allegations, an Apple spokesperson dismissed the DOJ's complaint as baseless, promising a robust defense against it. Apple pushed back by stating that the lawsuit could establish a precarious precedent, potentially granting excessive regulatory control over technology design to the government.

After the announcement of the lawsuit, Apple's stock experienced a 4% decline, settling at around $171, with no big change in after-hours trading.

Do Kwon's Extradition Saga Continues

In other legal crypto news, the fate of Terraform Labs co-founder Do Kwon is still uncertain as Montenegrin prosecutors challenge his extradition process, possibly escalating the issue to the nation's Supreme Court. The challenge arose from a Mar. 21 announcement by the prosecutors, who lodged a request for a protection of legality with the Supreme Court of Montenegro. This move came after an appellate court rejected an appeal from Kwon’s legal team, which the prosecutors argue should have been within the exclusive purview of the Supreme Court.

Montenegro has been deliberating whether to extradite Kwon to the United States or South Korea, where he faces criminal charges linked to his role in Terraform Labs' collapse. Initially, it seemed like Kwon was set to be extradited to South Korea after a Mar. 20 decision. However, the latest challenge suggests that the Supreme Court might overturn this decision due to procedural missteps by the appellate court, including conducting abbreviated proceedings and overstepping its jurisdiction.

Rumor has it that Kwon actually prefers extradition to South Korea, likely due to the severe penalties meted out in the US to high-profile crypto figures for similar allegations. Meanwhile, other Terraform Labs associates, including co-founder Hyun-seong Shin, are facing charges in South Korea, with the firm's former CFO, Han Chang-joon, already extradited there in February.

OneCoin Legal Chief Seeks Leniency

Meanwhile, the attorney for Irinia Dilkinska, the former "head of legal and compliance" at OneCoin, requested that she be sentenced to time served for her involvement in the notorious crypto scheme. This appeal was made in a sentencing memorandum filed on Mar. 20 in the United States District Court for the Southern District of New York. Dilkinska admitted guilt to one count each of conspiracy to commit wire fraud and money laundering in November of 2023, after her association with OneCoin.

OneCoin, which was established in 2014 and revealed as a scam in 2015, is infamously known for duping investors of about $4 billion. Dilkinska's role involved laundering money for the scheme under its co-founders, Karl Sebastian Greenwood and Ruja Ignatova, who is currently a fugitive.

Her attorney, John Buza, argued that Dilkinska's unique position and the "devastating situation" she faces warrant a sentence no more severe than the time she has already served. Buza made it a point to highlight her very good behavior in jail and her value as a "loving wife and mother," suggesting that a harsher sentence would be a "massive injustice."

This plea comes after Greenwood's sentencing in September 2023, where he received a 20-year prison term and was ordered to pay $300 million in restitution. Dilkinska is potentially facing up to 10 years in prison, very similar to Mark Scott, another lawyer for OneCoin, who was sentenced in January after his 2019 conviction.