US sues Apple over smartphone ‘monopoly’, citing cloud gaming as a key example

The US has filed a lawsuit against Apple, accusing it of illegally limiting competitors and holding a monopoly over the smartphone market.

In its lawsuit, the US Department of Justice gives five key examples of areas in which Apple allegedly supresses competition, one of which is cloud streaming game apps (the others are ‘super apps’, messaging, smartwatches and digital wallets).

The cloud gaming section argues that Apple has prevented developers from offering cloud gaming apps on the App Store, claiming that one of the main reasons for this is to force them to buy more expensive hardware.

The argument made is that if players could stream games over the cloud with App Store apps, they could play visually impressive games using older Apple devices, rather than having to update to more powerful and expensive hardware to do so.

“For years, Apple blocked cloud gaming apps that would have given users access to desirable apps and content without needing to pay for expensive Apple hardware because this would threaten its monopoly power,” the lawsuit claims.

It later explains: “Cloud streaming allows developers to bring cutting-edge technologies and services to smartphone consumers – including gaming and interactive artificial intelligence services – even if their smartphone includes hardware that is less powerful than an iPhone.”

It adds: “Apple has promoted the iPhone 15 by promising that its hardware is powerful enough to enable ‘next-level performance and mobile gaming’. But powerful hardware is unnecessary if games are played via cloud streaming apps.”

“Cloud gaming apps deliver rich gaming experiences on smartphones without the need for users to purchase powerful, expensive hardware,” it continues.

“As a result, users with access to cloud streamed games may be more willing to switch from an iPhone to a smartphone with less expensive hardware because both smartphones can run desirable games equally well.”

The lawsuit accuses Apple of blocking cloud streaming apps for this reason, saying: “Apple wielded its power over app distribution to effectively prevent third-party developers from offering cloud gaming subscription services as a native app on the iPhone. Even today, none are currently available on the iPhone.”

Apple announced in January that it was allowing game streaming apps, theoretically making native apps for services like Xbox Game Pass Ultimate’s cloud streaming possible.

However, in an interview with The Verge the following month, Xbox head Phil Spencer said the proposal “doesn’t go far enough to open up competition”, adding: “There’s not room for us to monetise Xbox Cloud Gaming on iOS.”

The lawsuit will provide more headaches for Apple, which has denied the Department of Justice’s claims and says it will “vigorously” defend itself.

Further reading

EU says it’s investigating why Apple terminated Epic’s developer account

UPDATE: Epic’s developer account has been reinstated

The company has already had to concede some of its control in the EU following the introduction of a new regulation, the Digital Markets Act, which went into effect this month and aims to ensure that so-called gatekeepers like Apple don’t use their dominant position in the market to stifle competition.

The Act means that Apple now has to allow developers to create and offer new apps (including new stores) in the EU without using the App Store.

However, organisations and companies like the European Games Developer Federation and Epic Games have been accusing it of trying to circumvent the new regulations, with criticism of new third-party app store fees and claims from Epic that its developer account had been terminated (it has since been reinstated).