US Files Antitrust Lawsuit Against Apple

The US Justice Department, 15 states, and the District of Columbia have come together to sue Apple for its anti-competitive practices. The lawsuit was filed through the US Federal Court in Newark, New Jersey.

The complaint maintains that as the result of Apple’s behaviors has led to higher prices and less competition in the smartphone market. In the US, iPhones occupy an estimated 50% of the market.

Attorney General Merrick Garland alleges 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.”

The complaint calls out a number of specific areas where it alleges Apple breached anti-competitive laws, namely when it comes to blocking certain types of apps, cloud services, interoperability capabilities and payment platforms.

Specific examples cited include the poor integration of Apple Watch with competitor smartphones, making it difficult for consumers who own Apple Watches to opt for anything other than an iPhone. Another example is the limitation of digital wallets available for iPhone, reducing payment options for iPhone users.

The claim also calls out practices related to “web browsers, video communication, news subscriptions, entertainment, automotive services, advertising, location services, and more.”

Apple denies the allegations made in the complaint. On the company’s Ethics and Compliance page, Apple CEO Tim Cook says, “We do the right thing, even when it’s not easy.” The post also notes that “Apple conducts business ethically, honestly, and in full compliance with the law.”

Assistant Attorney General Jonathan Kanter, who works in the Justice Department’s Antitrust Division, asserts that “for years, Apple responded to competitive threats by imposing a series of ‘Whac-A-Mole’ contractual rules and restrictions that have allowed Apple to extract higher prices from consumers, impose higher fees on developers and creators, and to throttle competitive alternatives from rival technologies.”

He also states that “today’s lawsuit seeks to hold Apple accountable” to ensure Apple does not use the same “unlawful playbook in other vital markets.”

Apple is also facing an anti-competitive claim in Europe, specifically related to its music streaming services.

Europe has just put into force the Digital Markets Act, which has obliged Apple to open up its practices for European users, such as allowing iPhones to install third-party apps and providing alternative payment options in the App Store.