The US Department of Justice filed the request a sweeping antitrust lawsuit against Appleaccusing the iPhone maker of being anti-competitive and creating a monopoly over the smartphone market.
Lawsuit, filed in federal court in New Jersey, alleges that Apple uses its control of the iPhone platform to “extract higher fees, stifle innovation” and “stifle” competition through its App Store. The government says Apple’s behavior is “resonating” in at least a half-dozen industries and, if left unchecked, the Cupertino, California-based tech giant will expand its monopoly beyond the smartphone market.
“This case is about freeing the smartphone market from Apple’s anticompetitive and exclusionary behavior and restoring competition to lower smartphone prices for consumers, reduce developer fees, and preserve innovation for the future,” the Justice Department said in the lawsuit, which was also filed in 16 major state attorneys.
The case targets Apple’s so-calledfenced garden”, its ecosystem of security measures and restrictions for users of its iOS platform. The plaintiffs claim that Apple disrupted the growth of apps that would make it easier for consumers to switch between competing smartphone platforms and reduced the functionality of non-Apple smart watches.
“[This is a] kind of a Hail Mary pass when it comes to antitrust law,” NetChoice Vice President and General Counsel Carl Zabo told Yahoo!Finance. “Americans know that if we want to buy a device, we actually have two clear choices: we have Apple and we have Android.”
But the lawsuit alleges that Apple’s practices extend beyond the iPhone and Apple Watch business, stating your advertising, news subscriptions and FaceTime services. The Justice Department also refers to Apple’s presence in the automotive industry, which has recently been reduced by the company’s shutdown his electric vehicle project.
An Apple representative did not immediately respond to a request for comment.
Apple shares were down 3.7% in Thursday afternoon trading.
Apple’s history with antitrust challenges
The lawsuit is the latest example of the Justice Department’s aggressive approach to federal antitrust law and a broader trend of companies and organizations fighting to break down Apple’s walled garden, which has helped make it one of the world’s most valuable companies with annual revenue of nearly $400 billion.
Thursday’s lawsuit marks the third antitrust case the Justice Department has brought against Apple since 2010; previous lawsuits were over e-book prices and allegations that Apple colluded with other tech companies to drive down wages.
Apple has faced several antitrust challenges in recent years, mostly over control of the App Store. Recently, Fortnite Producer Epic Games sued the company in 2020. Although Apple won the case in 2021, it was forced to make some concessions and change its policies under California law.
On March 4, the European Commission slapped Apple s Fine of $1.95 billion, accusing the company of abusing its dominant position in the market for the distribution of music streaming applications, such as Spotify or Apple Music. Apple’s conduct, which the EU’s regulatory arm claims has been going on for almost 10 years, could have led iOS users to pay “significantly higher prices” because of the company’s high commissions for app developers, according to the Commission.
Apple is also embroiled in a Justice Department lawsuit against Google, which is heading toward closing arguments in May. The lawsuit is the Ministry’s first major antitrust trial since it started Microsoft in court in 1998.
Regulators claim that Google has harmed competition paying companies to make their online search engine the default option on various web browsers, including Apple’s Safari. Apple is paid billions of dollars a year for the service and earns 36% of all search ad revenue that Google generates through Safari.