Justice Department May Bust Up AT&T's Exclusive Deal With Apple's iPhone
Obama's anti-trust cop Christine Varney is dusting off the Sherman Act and reviewing wireless companies' exclusive handset deals—most notably AT&T's monopoly control over Apple's iPhone. — One suspects that Google lobbyists are somehow involved.
Context & Ripple Effects
Christine Varney's Justice Department has opened a Sherman Act review of wireless carriers' exclusive handset deals, with AT&T's monopoly hold on the iPhone the marquee case, and the Wall Street Journal picked up the story the same day — a sign the probe traveled well beyond tech-press circles. The review arrives early in the Obama administration's antitrust agenda, making it a test of whether the newly staffed DOJ will treat carrier-device lockups as competition problems rather than ordinary commercial contracts.
First-order effects
- AT&T's core differentiator for the iPhone — sole US distribution of the year-old, fast-selling device — is now formally under federal antitrust examination, threatening the exclusivity that anchors its smartphone lineup.
- Apple faces the prospect of being forced to open iPhone sales to additional US carriers, ending a single-partner arrangement that has defined the product's American rollout since launch.
Second-order effects
- Rival carriers shut out of the iPhone would gain a path to the most sought-after handset in the market, while Verizon-style exclusive-deal structures across the industry fall under the same review umbrella rather than escaping scrutiny case-by-case.
- Silicon Alley Insider's own framing — that Google lobbyists may be involved — remains unconfirmed speculation, but if handset exclusivity rules loosen, Android-based devices' main counterweight against the iPhone (carrier breadth) erodes, sharpening the Google–Apple rivalry at the OS level.
Third-order effects
- A DOJ finding that exclusive handset deals harm competition would establish handset-distribution lockups as a legitimate antitrust target in US telecom, inviting sustained regulatory attention to how dominant smartphones reach consumers.
- If the pattern holds, enforcement pressure shifts from the carrier contract itself toward the platform practices that exclusive distribution protects — pushing regulators deeper into the smartphone ecosystem than network licensing questions alone.
The trend: Under Christine Varney, US antitrust policy is reopening Sherman Act scrutiny of wireless distribution deals, with carrier exclusivity over hit handsets becoming the first test case.