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The United States Justice Department launched a significant lawsuit against Apple on Thursday, alleging that the tech giant has created an unlawful monopoly in the smartphone industry, limiting competition and hindering innovation.
The lawsuit, filed in a federal court in New Jersey, accuses Apple of holding a monopoly in the smartphone market and utilising its dominance over the iPhone to engage in various illegal practices.
“Consumers should not have to pay higher prices because companies violate the antitrust laws,” Attorney General Merrick Garland said in a statement. “If left unchallenged, Apple will only continue to strengthen its smartphone monopoly.”
Why is Apple sued?
1. The lawsuit said it aims to challenge Apple’s business model, which involves charging premium prices for its technology products. The Justice Department seeks to provide users with more choices in how apps can interact with Apple’s hardware.
2. The lawsuit alleged that Apple leverages its market power to extract more money from various stakeholders, including consumers, developers, content creators, artists, publishers, small businesses, and merchants. This practice ultimately impacts consumers by increasing costs.
3. The lawsuit, filed in a U.S. federal court in Newark, New Jersey, said it seek to liberate smartphone markets from what the Justice Department perceives as Apple’s anticompetitive behaviour. The objective is to foster competition, reduce smartphone prices, lower fees for developers, and preserve innovation.
4. The US regulator accused Apple of actively stifling competition by hindering the development and adoption of technologies that could challenge its dominance. This includes impeding the growth of “super apps,” cloud streaming game apps, messaging apps, smartwatches, and digital wallets.
5. The lawsuit highlighted specific instances where Apple allegedly impeded competition. For instance, it made it more difficult for competing messaging apps and smartwatches to function smoothly on its devices. Additionally, Apple’s app store policies concerning streaming services for games are cited as detrimental to competition.
What did Apple say?
Apple responded to the lawsuit by saying that it poses a threat to the very essence of the company and the core principles that distinguish Apple products in highly competitive markets.
“If successful, it would hinder our ability to create the kind of technology people expect from Apple — where hardware, software, and services intersect,” it said.
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