The Biden administration sued Apple on Thursday, alleging the tech giant created a monopoly in the smartphone market by blocking competitors from accessing hardware and software features of the iPhone.
The lawsuit, filed by the Department of Justice in federal court in New Jersey, is the latest in a series of efforts by the Biden administration to rein in what it argues is unlawful anticompetitive behavior by some of the nation’s largest tech companies. Sixteen state and district attorneys general joined the DOJ in bringing the case.
“We allege that Apple has maintained monopoly power in the smartphone market, not simply by staying ahead of the competition on the merits, but by violating federal antitrust law,” Attorney General Merrick Garland said in a statement announcing the lawsuit. “If left unchallenged, Apple will only continue to strengthen its smartphone monopoly.”
In the lawsuit, the department claims Apple has used its control over the iPhone to “engage in a broad, sustained, and illegal course of conduct” designed to maintain its control over the smartphone market and prevent its rivals from attracting consumers.
Apple strongly rebuked the lawsuit in a statement to ABC News.
“At Apple, we innovate every day to make technology people love — designing products that work seamlessly together, protect people’s privacy and security, and create a magical experience for our users,” the company said. “This lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets.”
“We believe this lawsuit is wrong on the facts and the law, and we will vigorously defend against it,” Apple added.
Among the actions alleged by DOJ, Apple has sought to block the spread of “SuperApps” that make it easier for consumers to switch between smartphone platforms. The DOJ accuses Apple of blocking development of cloud streaming apps and services that would make it easier for consumers to play high-quality games and other apps without paying for accompanying hardware.
Apple is also accused of deliberately making the quality of cross-platform messaging worse and less secure to incentivize users of other smartphones like Android to instead switch to an iPhone.
Garland and other senior DOJ officials are set to formally announce the lawsuit in a press conference at the Justice Department Thursday morning.
The lawsuit against Apple adds another confrontation between the Biden administration and big tech over antitrust concerns.
In September, the Federal Trade Commission sued Amazon for illegally maintaining its monopoly power “to inflate prices, degrade quality, and stifle innovation for consumers and businesses.” Amazon rejected the allegations and vowed to fight the case in court.
That same month, the trial began in a case brought by the DOJ against Google in an effort to rein in its dominance over the online search market. Google argued that its success in the sector owed to its superior product.
The Biden administration has recently filed a lawsuit against tech giant Apple, accusing the company of maintaining a monopoly in the smartphone market through its iPhone products. The lawsuit, which was filed in federal court, alleges that Apple has engaged in anti-competitive behavior that has stifled competition and harmed consumers.
The lawsuit comes as part of a broader crackdown on big tech companies by the Biden administration, which has signaled its intention to take a tougher stance on antitrust issues. The administration has also recently filed lawsuits against other tech giants such as Google and Facebook.
The lawsuit against Apple specifically focuses on the company’s control over the iPhone ecosystem, which includes not only the hardware itself but also the App Store and other services. The administration alleges that Apple has used its dominant position in the market to impose restrictive rules and fees on developers, effectively shutting out competition and raising prices for consumers.
One of the key issues in the lawsuit is Apple’s practice of requiring developers to use its own payment system for in-app purchases, which allows the company to take a cut of up to 30% of all transactions. The administration argues that this practice unfairly disadvantages competing payment systems and drives up prices for consumers.
Apple has denied the allegations and has vowed to fight the lawsuit in court. The company maintains that its practices are legal and that they benefit both developers and consumers by ensuring a safe and secure platform for app distribution.
The outcome of the lawsuit could have far-reaching implications for the tech industry as a whole. If the Biden administration is successful in proving its case against Apple, it could set a precedent for future antitrust actions against other big tech companies. It could also lead to changes in how Apple operates its App Store and other services, potentially opening up new opportunities for competition in the smartphone market.
Overall, the lawsuit against Apple highlights the growing scrutiny that big tech companies are facing from regulators and lawmakers. As these companies continue to wield immense power and influence over the digital economy, it is clear that they will face increasing pressure to operate in a more competitive and consumer-friendly manner.
