The United States has initiated a significant legal action against Apple, alleging that the company has monopolized the smartphone industry and stifled competition.
According to the Department of Justice, Apple has exploited its dominance over the iPhone to restrict competition and limit consumer choices, hindering the development of new applications and diminishing the attractiveness of competing products. Apple, however, has committed to fervently contest the lawsuit, denying all allegations.
Filed in a federal court in New Jersey, the lawsuit claims Apple employed “a series of shapeshifting rules” aimed at impeding innovation and obstructing competitors. The tech giant is accused of preventing competitors from offering their services on the iPhone and making it challenging for users to switch to other operating systems. Attorney General Merrick Garland criticized Apple for undermining applications, products, and services that could potentially decrease users’ dependence on the iPhone.
The lawsuit outlines various “anti-competitive” actions purportedly taken by Apple, such as blocking applications, stifling mobile cloud streaming services, restricting third-party digital wallets, and reducing the functionality of non-Apple smartwatches. Mr. Garland accused Apple of not only preserving its monopoly through illegal means but also of locking in customers while excluding competitors. He highlighted the compromised experience of iPhone users communicating with non-Apple smartphones, pointing out issues like non-encrypted messages and poor image quality.
Prosecutors aim to compel Apple to revise contracts or possibly undergo structural changes, although any such remedies would be determined in the future. Apple spokesman Fred Sainz argued that the lawsuit misconstrues both facts and law, asserting that a victory for the prosecution would undermine Apple’s capacity to innovate.
This lawsuit marks the third instance of the Justice Department suing Apple since 2009 and represents the first antitrust challenge against the company under President Joe Biden’s administration. Legal and antitrust experts view the lawsuit as a major case against Apple, noting its potential implications for startup businesses, consumers, shareholders, and the broader tech ecosystem. The lawsuit follows a recent €1.8 billion fine imposed on Apple by the European Union for anti-competitive practices related to music streaming, indicating a growing legal scrutiny over Apple’s business practices and its dominant position in the smartphone market.
