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The Justice Department cites Apple’s CarPlay infotainment system as an example of the tech giant trying to leverage its dominance of smartphones to expand into other lines of business.
The Department of Justice could be saving the auto industry from the harrowing fate of becoming a vassal sector to Big Tech.
In its monopolization lawsuit filed last week against Apple, the DOJ cites Apple’s CarPlay infotainment system as one example of the tech giant attempting to leverage its dominance of smartphones to expand into other lines of business like banking, entertainment, and even auto production.
The main thrust of the case is how Apple intentionally locks consumers and developers into the iPhone ecosystem, by designing its products to not be interoperable, worsening the quality of consumer experience and throttling competition. The suit focuses mainly on Apple blocking the development of so-called “super apps” (which enable a host of services from messaging to financial transactions, like WeChat in China), cross-platform messaging services, and cloud streaming apps, among others.
The claim’s citation of CarPlay in particular previews some of the far-reaching implications that the antitrust lawsuit could have to potentially liberate a broad host of industries from Apple’s control.
CarPlay essentially promises to turn motor vehicles into “smartphones on four wheels,” offering a computer screen with map services, voice assistance, and an app store, along with other entertainment capabilities. It’s not just Apple. There’s a race among the Big Tech companies, primarily Google and Amazon, to leverage their positions in e-commerce and digital platforms to become key players in the future of the automotive sector. Google’s Android mobile division, for example, has a cloud-based service called Android Auto that offers a similar set of features.
CarPlay is pretty far along in being integrated as a ubiquitous automotive product. Its system is projected to be installed in 97 percent of new vehicles, according to CarPlay’s own figures, and Apple has pursued a number of exclusive partnerships where it would be the default device in vehicles. General Motors was the most recent case, but the company backed away due to concerns about certain practices that might damage GM’s reputation with consumers.
There are a number of privacy-oriented concerns about how these in-car tech products collect data on drivers, similar to how tech companies have tracked users across the web. Android Auto is explicit, for example, that it gathers “car location data, telemetry data, camera footage, and radar data.”
The value of that in-car data goes beyond the personal information collected via social platforms to sell individualized surveillance advertising, though that’s certainly a component of it. By getting underneath the hood of new vehicle fleets, Apple and Google can use that knowledge to advance their own autonomous vehicle lines, or entrench control over the production of other vehicles.
In a letter to the Federal Trade Commission in 2022, Sen. Elizabeth Warren (D-MA) echoed these warnings and called for rules to protect consumers and businesses from tech taking control of the industry. “Big Tech is setting itself up to be a one-stop shop for automakers,” the letter reads.
There are a number of privacy-oriented concerns about how these in-car tech products collect data on drivers.
The car wars between Big Tech and the auto sector began over a decade ago, mainly because of a shift in automobile production, which now relies heavily on software just as much as hardware. The new era of “software-defined vehicles” is not inherent to the transition from internal combustion engines to electric vehicles, but it happened alongside the EV revolution. Software makes standardization in production more efficient, but really infotainment systems were driven by the competitive opportunity to add a snazzy consumer feature for new car fleets.
But software is a very different business than manufacturing, and the Big Three U.S. automakers, along with their foreign counterparts in Japan and Europe, faced a dilemma. Their more tech-savvy competitors, Tesla and Rivian, had already built up their own advanced software development teams, allowing them to assemble all components of the vehicle in-house.
In order to keep up, the Big Three first deliberated about investing in their own software, but for various reasons turned to Big Tech for partnerships as a short-term play. There’s a revenue-sharing component for each of these partnerships in exchange for allowing Apple and Google to operate within the vehicles.
But in so doing, the Big Three may have dug their own grave, and are now only belatedly realizing what they’ve done.
It began with using mapping and navigation services from Google and Apple in the early 2010s. But that feature quickly evolved into a full infotainment experience that people now see today in newer cars.
At the same time, Apple and Google seized this opportunity, as they were working on their own autonomous vehicle experiments. In their view, transportation is not far off from their tech platform’s core business: infrastructure and networks.
Their overconfidence seems to have been a miscalculation so far. Just as General Motors, Ford, and Stellantis didn’t know software, tech firms struggled with developing their own vehicles. Apple’s Project Titan aimed to develop its own autonomous vehicle line but has completely stalled due to various complications.
Instead, Apple saw the market opportunity to use their software know-how to get inside the auto companies and learn everything about their operations. After providing mapping services, tech companies expanded further, to the point that their proprietary software is now moving toward full integration with the actual mechanical body of vehicles. It means that auto companies have to adapt elements of their production to fit new iOS updates for CarPlay or other features Apple adds on.
Apple’s newest version of CarPlay, for example, explicitly touts its “deep integration with the car’s hardware.” It extends into the user interface of the dashboard, with speedometer and RPM displays. That degree of interfacing entails taking over not just all interior screens within the vehicle, but also replacing gas gauges and speed dials with a digital version powered by the driver’s iPhone.
The setup is similar to new lines of EVs in China that are fully integrated with smartphones, such that consumers can get repairs and even get their rented batteries replaced through their phones.
With software at the leading edge, lawmakers and outside critics have warned that Big Tech will use their access to automakers to build up insider understanding and eventually improve their own fleets.
Alternatively, Apple and Google may eventually assume enough control that they remain content to let auto companies do the dirty, capital-intensive work of actually manufacturing the vehicles, reliant on the software owned by tech companies.
This fissured arrangement would actually be very standard for Apple’s core business in its other hardware products, as Erik Peinert, research manager at the American Economic Liberties Project, explains in a recent piece for American Affairs. It’s convenient for Apple because the firm essentially gets to collect the lion’s share of the profits on product sales, without needing to make the capital investments or manage the labor workforce. This industrial production is managed by the various Operation Equipment Manufacturers, typically overseas, which are bound by a set of strict vertical restraints dictated by Apple.
This could spell doom for the auto sector and its workers, who would lose out on immense earnings if they’re not in control of their own business.
Auto companies have begun to wake up and pursue their own partnerships to avoid relying on Apple and Google’s infotainment systems. In 2019, Ford and Volkswagen spearheaded a global alliance to discuss developing a shared open-source system to manage new technological demands and other software capabilities. The state of play for this deal, though, is still to be determined.
For the time being, the DOJ’s case against Apple could limit the company’s ability to expand into other lines of business, which could be good news for the auto companies.
