At a press conference on Thursday, US Attorney Merrick Garland noted that Apple’s net revenue – which is expected to be $97 billion in 2023 – “exceeds the GDP of more than 100 countries,” thanks in large part to the success of its iPhone, which he said has more than 65 percent share of the US smartphone market.
Over the years, “Apple has maintained monopoly power in the smartphone market” not just by “competing on the merits,” but through a deliberate strategy of excluding competitors, he said.
“Apple has maintained its power not because of its supremacy, but because of its illegal exclusionary behavior,” Mr. Garland added.
Apple called the lawsuit “wrong in fact and law.”
“This lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets,” the statement said.
“If successful, it would hinder our ability to create the kind of technology people expect from Apple – where hardware, software and services intersect. It would also set a dangerous precedent, empowering the government to take a heavy hand in designing human technology.”
It is the first antitrust challenge against Apple under the Biden administration, which is handling antitrust cases against some of Silicon Valley’s biggest companies.
If the DoJ is successful, possible remedies could range from ordering the company’s dissolution to forcing changes to the way Apple contracts or conducts its business. U.S. officials declined to comment on what legal remedies they would ultimately seek.
Senior DoJ officials on Thursday compared Apple’s lawsuit to some of the most significant antitrust cases in US history, including challenges against ATandT, Standard Oil and Microsoft, which two decades ago was accused of using its Windows monopoly to bring down web browser pioneer Netscape.
“Today we add to that distinguished legacy,” Mr. Kanter said.
The DoJ sued Google last year for alleged monopolistic control over the digital advertising market. A trial is underway in a separate federal case over the Alphabet-owned Internet search company’s market power.
The Federal Trade Commission, another US competition regulator, has sued Amazon, alleging it is illegally using monopoly power to overcharge consumers and exploit sellers, and is leading a case aimed at forcing Meta to end its acquisitions of Instagram and WhatsApp.
The DoJ joins a growing global backlash against Apple’s tight control over its iOS ecosystem, which critics say allows the company to charge monopoly fees and impose unfair business terms.
EU antitrust regulators fined Apple 1.8 billion euros ($2.9 billion) earlier this month over “stewardship” policies that prevent rival music streaming apps such as Spotify from directing users outside the App Store to pay.
The bloc’s Digital Markets Act also came into effect this month, requiring the iPhone maker to make historic changes to its mobile ecosystem in Europe, opening it up to competing stores and payment methods.
Financial Times