The United States Department of Justice (DOJ), along with 16 state and district attorney general, has launched an antitrust lawsuit against Apple. The lawsuit alleges Cupertino has monopoly control over the smartphone market. Just so you know Apple largely dominates the smartphone market share in the U.S., and as of Q4 2023, every 62 out of 100 Americans have an Apple device, notes Counterpoint Research.
According to the lawsuit filed today, Apple has been accused of engaging in practices that artificially inflate prices and bury competition in the market. The government alleges that Apple has utilized its staggering dominant position to impose restrictive contractual terms on developers, thereby limiting innovation and choice for consumers. It also includes blocking cross-platform messaging apps, restricting compatibility with third-party wallets and smartwatches, and disrupting non-App Store programs and cloud-streaming services. Such actions have harmed consumers by limiting choice and innovation, the lawsuit claims.
The government says that each action taken by Apple has further contributed to its position as it stands today in the smartphone industry. According to Attorney General Merrick Garland, allowing Apple’s practices to continue unchecked would only serve to reinforce its smartphone monopoly.
“Each step in Apple’s course of conduct built and reinforced the moat around its smartphone monopoly,” stated the Justice Department in the lawsuit. In addition, DOJ’s antitrust division chief Jonathan Kanter slammed Apple’s tactics, saying it’s like playing “Whac-A-Mole” to stop competition.
Apple, however, strongly defends its ways. It says the lawsuit, filed by the DOJ, hurts innovation and could set a risky example of the government meddling in tech. An Apple spokesperson cautioned against too much regulation.
“At Apple, we innovate every day to make technology people love — designing products that work seamlessly together, protect people’s privacy and security, and create a magical experience for our users,” said Apple in the statement. “This lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets.”
The lawsuit against Apple comes amid increasing scrutiny of big tech companies and their market dominance. The Biden administration has pledged to take a more aggressive stance against anticompetitive practices. Take note that something on the same notes happened with Google, too. The DOJ had filed an antitrust case against the company for its dominant position as a search engine and later on over its advertising business.
More importantly, Apple has been on the radar overseas, as well. Take Europe’s controversial Digital Markets Act (DMA) for instance. It forced Apple to replace the lightning port with USB-C in iPhones, and now, a third-party store is coming later this year. But, most of this will remain exclusive to those residing in Europe. Furthermore, the most recent lawsuit could force Apple to bring changes to its most popular products, including the iPhones and even the Apple Watch.
Attorney generals representing New Jersey, Arizona, California, Connecticut, Maine, Michigan, Minnesota, New Hampshire, New York, North Dakota, Oklahoma, Oregon, Tennessee, Vermont, Wisconsin, and the District of Columbia are mentioned in the filing.