Published on: March 26, 2024
The US Department of Justice (DOJ) has initiated a major antitrust lawsuit against Apple Inc., accusing the tech behemoth of monopolizing the smartphone market. The lawsuit alleges Apple has unlawfully maintained its dominance in the smartphone and performance smartphone markets through restrictive practices that deter competition and innovation.
According to the DOJ, Apple’s monopolistic behavior encompasses a wide array of anticompetitive actions, including impeding the development of apps and services that could make users less reliant on the iPhone, promoting less interoperable products, and thereby increasing costs for consumers and developers.
These actions, the DOJ argues, not only stifle competition but also hinder innovation in apps, products, and services, ultimately imposing extraordinary financial burdens on developers, businesses, and consumers.
The lawsuit details several specific forms of alleged anti-competitive conduct by Apple, such as:
- Blocking the growth of innovative super apps that could facilitate switching between competing smartphone platforms
- Suppressing mobile cloud streaming services
- Excluding cross-platform messaging apps
- Diminishing the compatibility/functionality of non-Apple smartwatches
- Limiting third-party digital wallets to favor Apple Pay
In addition to the DOJ’s allegations, the lawsuit is part of a broader trend of increasing scrutiny of major tech companies by the U.S. government. Critics of Apple argue that the company’s strict control over its ecosystem, while enhancing user experience, unfairly limits third-party access and favors Apple’s own products, thereby undermining competition.
This includes allegations of Apple offering preferential treatment to its services and imposing a 30% commission on most sales through its App Store, a practice contested by companies forced to comply due to Apple’s significant market share.
Apple, in response to the lawsuit, has vehemently denied the allegations, stating its intention to defend itself robustly against the claims. The company argues that the lawsuit misinterprets its efforts to innovate and deliver high-quality, secure, and private technology solutions to users, asserting that its practices are fundamental to its identity and the value it provides in competitive markets.