Apple has found itself on the wrong end of a civil antitrust lawsuit brought by the U.S. Department of Justice and 16 other state and district attorneys general. The lawsuit accuses Apple of monopolizing smartphone markets, violating the Sherman Act.
The complaint was filed in the U.S. District Court for the District of New Jersey. According to the lawsuit, Apple illegally maintains a monopoly over smartphones by selectively imposing contractual restrictions on, and withholding critical access points from, developers.
The DOJ says Apple undermines apps, products and services that would otherwise make users less reliant on the iPhone, promote interoperability, and lower costs for consumers and developers. The company also exercises its monopoly power to extract more money from consumers, developers, content creators, artists, publishers, small businesses and merchants.
In a statement, Attorney General Merrick Garland says Apple has allegedly held monopoly power in the smartphone market by violating federal antitrust law, not just by staying ahead of the competition on its own merits. If left unchallenged, Apple will only continue to strengthen its smartphone monopoly, Garland adds.
The lawsuit contends that Apple uses its control over the iPhone to engage in a broad, sustained and illegal course of conduct designed to maintain its monopoly while extracting as much revenue as possible. The complaint alleges that Apple’s anticompetitive course of conduct has taken several ever-evolving forms, including:
The complaint also alleges that Apple’s conduct affects web browsers, video communication, news subscriptions, entertainment, automotive services, advertising and location services.
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, says Assistant Attorney General Jonathan Kanter, in a statement. He says the lawsuit seeks to ensure Apple cannot deploy the same tactics in other vital markets.
Apple is a publicly traded company. In fiscal year 2023, Apple generated annual net revenues of $383 billion and net income of $97 billion.
