The Department of Justice is joined by 15 states and the District of Columbia in alleging that Apple stifles competition.
The United States Department of Justice (DOJ) has filed a landmark civil antitrust lawsuit against the tech giant Apple, alleging that the company has stifled competition to boost its revenues and illegally monopolize the US smartphone market.
The 88-page suit was filed Thursday in a New Jersey federal court with 16 state and district attorneys general joining the DOJ.
At the center of the issue is Apple’s flagship product, the iPhone, which is instrumental in the company’s valuation of $2.7 trillion. With over a billion users, the DOJ alleges that Apple has manipulated its market share to undermine competitors’ products and favor its own.
Rather than engaging in fair competition by offering more affordable services, federal and state authorities assert that Apple has imposed “a series of shapeshifting rules and restrictions” to “extract higher fees, thwart innovation, offer a less secure or degraded user experience, and throttle competitive alternatives.”
US Attorney General Merrick Garland stated, “Consumers should not have to pay higher prices because companies violate the antitrust laws.” He added, “If left unchallenged, Apple will only continue to strengthen its smartphone monopoly.”
This lawsuit represents the most ambitious antitrust effort yet by President Joe Biden’s administration, which has pledged to address corporate consolidation in sectors like technology, where critics argue that it has become nearly impossible for smaller rivals to compete.
Apple has disputed the characterization and stated on Thursday that it would “vigorously” defend itself against the lawsuit, which it deemed “wrong on the facts and the law.”
The California-based company has been under increasing scrutiny from anti-monopoly enforcement bodies in Europe, Japan, and South Korea.
With annual revenues of about $400 billion, Apple has long advocated for strict integration between its products and software, a strategy often referred to as a “walled garden.” The company argues that this approach provides users with a more seamless experience. However, the DOJ stated on Thursday that Apple has attained its immense size in part by violating antitrust laws.
“For years, Apple responded to competitive threats by imposing a series of ‘Whac-A-Mole’ contractual rules and restrictions that have allowed Apple to extract higher prices from consumers, impose higher fees on developers and creators, and to throttle competitive alternatives from rival technologies,” Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division said in a press release.
“Today’s lawsuit seeks to hold Apple accountable and ensure it cannot deploy the same, unlawful playbook in other vital markets.”
The Biden administration’s antitrust efforts have already targeted corporate giants like Google and Amazon, alongside unsuccessful attempts to block acquisition deals involving Microsoft and Facebook parent Meta Platforms.
Upon news of the lawsuit, Apple’s stock price dropped by slightly more than 3 percent.
Source: https://www.aljazeera.com/news/2024/3/21/us-doj-announces-antitrust-lawsuit-against-tech-giant-apple
