Summary
- Musk’s X Corp. and xAI allege that Apple’s exclusive integration of ChatGPT provides OpenAI with “billions of user prompts” while excluding competitors.
- The lawsuit accuses Apple of skewing App Store rankings to benefit ChatGPT, even with Grok ranking second in “Productivity.”
- XAI and X Corp. are pursuing billions in damages and legal orders to terminate the exclusive deal.
Elon Musk’s X Corp. and xAI initiated a federal antitrust lawsuit against Apple and OpenAI on Monday, asserting that the two tech giants have formed an exclusive partnership that hinders competitors from integrating AI into iPhones and solidifies their monopoly in the chatbot sector.
The complaint, lodged in the Northern District of Texas, seeks “billions” in damages and court orders to dismantle what the plaintiffs describe as an anticompetitive agreement between “two monopolists collaborating to sustain their market power.”
The lawsuit specifically calls out Apple’s decision in June 2024 to make ChatGPT the sole integrated AI chatbot in iOS.
According to the filing, ChatGPT dominates “at least 80 percent” of the generative AI chatbot market, while Grok only captures “a small fraction,” despite claims of superior functionality.
The agreement purportedly grants ChatGPT “exclusive access to billions of user prompts from hundreds of millions of iPhones,” effectively sidelining competitors like xAI’s Grok, as stated by the companies.
“Apple’s exclusive ChatGPT contract has left competitors like Grok unable to compete on the same data scale, and they continue to lag behind,” noted Midhun Krishna M, MLOps engineer at Juno AI, in a statement to Decrypt.
This integration grants OpenAI the “largest real-time feedback loop,” he continued, assuring “precision and market supremacy.”
The exclusive setup allows iPhone users to enjoy Siri responses powered by ChatGPT, employ AI for image analysis, and utilize writing tools, all solely through OpenAI’s technology.
The lawsuit additionally warns that Apple is distorting App Store rankings to promote ChatGPT while stifling its rivals.
Earlier in August, Musk confronted Apple regarding App Store rankings, questioning why his applications do not feature in the “Must Have” section despite high standings.
Despite Grok holding the second spot in Apple’s “Productivity” category and X topping “News,” neither appears in the spotlighted “Must-Have Apps” section where ChatGPT is showcased, according to the firms.
The companies also claim Apple has delayed approvals for Grok app updates and refused requests for promotional placements, even with new features added.
The complaint references Phillip Shoemaker, a former Apple App Store director, who acknowledged that rankings can be “arbitrary” and that “Apple has faced challenges in using the App Store as a tool against competitors.”
According to the filing, Apple is concerned that “super apps” might make iPhones obsolete, jeopardizing its 65 percent share in the U.S. smartphone market.
OpenAI intends to increase ChatGPT’s premium fee to $44 by 2029 and share revenue with Apple, as detailed in the complaint, allowing Apple to collect what it describes as “monopoly rents.”
The complaint cites violations of the Sherman Act, including constraints on trade, monopolization, attempted monopolization, and conspiracy, alongside claims of civil conspiracy, unfair competition, and specific Texas antitrust infringements.
X Corp. and xAI are calling for injunctive relief to terminate the exclusive deal and ensure equal integration possibilities for competitors.
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