The US Department of Justice announced on Thursday the filing of a historic antitrust lawsuit against Apple, alleging that the company “relies on exclusionary anti-competitive conduct” to maintain its leadership in the smartphone market.
Attorney General Merrick Garland stated 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.”
“We allege that Apple has employed a strategy that relies on exclusionary anti-competitive conduct that hurts both consumers and developers.”
The lawsuit, filed in the US District Court for New Jersey, was joined by 16 state and county attorneys general. The document alleges that Apple’s actions have harmed consumers by inflating prices, reducing choice in the marketplace and reducing the quality of apps, phones and accessories. It claims that the company is also forcing developers to comply with rules “that insulate Apple from competition.”
“We allege that Apple has consolidated its monopoly power, not by making its own products better, but by making other products worse.”
Apple is allegedly thwarting competitors at every stage of its proprietary ecosystem, from messaging systems to smart watches and digital wallets.
“Apple has maintained its power not because of its superiority, but because of its unlawful exclusionary behavior.”
The iPhone accounted for more than half of Apple’s $383 billion in annual revenue recorded in 2023. However, the company’s shares fell sharply amid the lawsuit news following Garland’s press conference, dropping nearly 6 per cent to a near 10-month low.
Apple stated that the lawsuit “threatens who we are and the principles that set Apple products apart in fiercely 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 would also set a dangerous precedent, empowering government to take a heavy hand in designing people’s technology.”
The lawsuit follows the Justice Department’s actions against Google, Meta and Amazon.
