The U.S. Department of Justice and 15 states on Thursday, filed a lawsuit against Apple, as part of the government’s crackdown on Big Tech, alleging that the tech giant monopolized the smartphone market, disadvantaged smaller competitors, and inflated prices.
Attorney General Merrick Garland stated, “Consumers should not suffer higher prices due to antitrust violations,” expressing concern that Apple’s dominance in the smartphone industry would only strengthen if left unchecked.
According to the Justice Department, Apple charges exorbitant prices for its products, making more significant profits than its counterparts. Additionally, the company imposes fees on various business partners, indirectly leading to higher consumer prices and increased profits for Apple.
The lawsuit aims to challenge Apple’s longstanding business model, which revolves around charging premium prices for technology products while maintaining strict control over their functionality and usage. The government seeks to compel Apple to offer users greater flexibility in how apps interact with its hardware.
Apple refuted the allegations, asserting that the lawsuit undermines its core principles and its ability to innovate in fiercely competitive markets.
The Justice Department, along with the District of Columbia, is seeking reforms at Apple, including potential structural changes to address the harm caused by its alleged anticompetitive practices.
The lawsuit, spanning 88 pages and filed in U.S. federal court in Newark, New Jersey, aims to foster competition, lower smartphone prices, reduce developer fees, and promote innovation in the industry.
The U.S. accused Apple of deliberately hindering technological advancements in various smartphone-related sectors, such as messaging apps and digital wallets, to stifle competition.
The Justice Department intends to define the market as the smartphone industry in the United States, where Apple holds a dominant position. However, Apple argues that the global smartphone market should be considered, where it has a smaller market share.
Quoting emails from the late Apple co-founder Steve Jobs, the lawsuit alleges that Apple sought to restrict consumer choice and force developers to use its payment systems, thereby maintaining its control over the market.
The specific changes sought by the Justice Department remain unclear, but the complaint calls for measures to prevent Apple from using its market power to undermine competitors and restore competitive conditions.
Despite previous legal challenges and investigations in Europe, Japan, and Korea, Apple continues to face scrutiny over its business practices, particularly concerning its App Store commission fees.
U.S. Attorney General Merrick Garland expressed confidence in the Justice Department’s case, stating that they pursue legal action based on the merits of the case and their likelihood of success.
Apple maintains that it restricts access to user data and hardware by third-party developers for privacy and security reasons. However, critics argue that these restrictions stifle competition and innovation in the marketplace.
