X targets Apple and OpenAI in antitrust lawsuit News
Ehécatl Cabrera, CC BY-SA 4.0, via Wikimedia Commons
X targets Apple and OpenAI in antitrust lawsuit

X Corp. and X.AI LLC filed a federal lawsuit on Monday alleging that Apple and OpenAI’s exclusive ChatGPT integration violates federal competition law.

Plaintiffs accused the two companies of violating antitrust laws by establishing effective monopolies in their respective markets. The lawsuit stated that Apple currently owns a 65 percent US market share for smartphones, while OpenAI maintains an 80 percent market share for generative AI chatbots.

The complaint, filed in the US District Court for the Northern District of Texas, raises multiple federal antitrust claims under the Sherman Act. Under Section 1 of the Sherman Act, the lawsuit argues that Apple and OpenAI leveraged their scale and market dominance to unlawfully restrain trade and stifle competition. The complaint further alleges that under Article 2 of the Sherman Act, the two companies have conspired to monopolize their respective markets.

Defendants are also accused of violating the Texas Business and Commerce Code for “engaging in a contract, combination, or conspiracy in restraint of trade.” X.AI argues that Apple deprioritized the X.AI app “Grok” in Apple’s app store rankings and delayed approval of X.AI app updates, while favoring ChatGPT. The suit draws on precedent set in the 2001 landmark case United States v. Microsoft Corp., in which Microsoft was found to engage in monopolistic, exclusionary conduct due to its dominant share in Intel-compatible PC operating systems and exclusive arrangements with internet service providers.

Plaintiffs requested a permanent injunction that would bar Apple and OpenAI from engaging in alleged antitrade acts and also sought treble damages, which could represent billions of dollars. However, X.AI faces significant hurdles in proving antitrust injury, as it must show that damages resulted from conspiratorially reduced competition rather than just ordinary business rivalry.

OpenAI launched ChatGPT in November 2022, rapidly achieving a large share of the growing generative AI model market. In June 2024, OpenAI announced plans for a partnership with Apple, wherein Apple made ChatGPT the only AI chatbot natively integrated into Apple’s iOS operating system, providing exclusive access to Siri prompts and other iPhone features.

X.AI is a subsidiary of Elon Musk’s X Corp., which also owns the platform formerly known as Twitter. X.AI is best known for its chatbot, Grok–an AI competitor of ChatGPT.

The suit follows a string of related tech news and litigation. Apple has been enmeshed in controversy surrounding data access mandates issued by the United Kingdom. One of OpenAI’s largest competitors, Anthropic, is currently engaged in a class action lawsuit over the use of copyrighted works.

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