Federal and state enforcement authorities say that instead of competing with rivals by offering more affordable services, Apple “charges higher fees, discourages innovation, and provides less secure or lower-quality user services.” It claims to have imposed “a reshaping set of rules and restrictions” to deliver an “unusual experience” and “suppress competitive alternatives.” ”
The Justice Department and states allege in their complaint that through its actions, Apple “built a moat around and strengthened its smartphone monopoly.”
“If left unchecked, Apple will only continue to strengthen its smartphone monopoly,” U.S. Attorney General Merrick Garland said in a statement.
Apple spokesman Fred Sainz said in a statement that the lawsuit is “false on the facts and the law” and that the company will “vigorously defend itself.”
“This lawsuit threatens who we are and the principles that make Apple products stand out in a fiercely competitive market,” said Sainz. “Our ability to produce technology such as software, technology, etc. will be hampered.” Services intersect. ”
Apple faces increased regulatory scrutiny on a number of fronts, including for allegedly abusing its power over competitors and consumers by imposing restrictions and high fees on its popular App Store. ing.
Critics have long accused tech giants of undermining small businesses by barring app makers from using external payment systems and charging high fees for transactions. The company has begun opening up its walled gardens, but competitors continue to criticize the changes as insufficient.
European regulators this month fined Apple nearly $2 billion for “abusing” its influence over music streaming platforms and preventing developers from informing users about “alternative and cheaper” services. This was the culmination of many years of research. Apple said it plans to appeal the fine, saying it “ignores the realities” of the music streaming industry.
Apple is one of six tech giants to be subject to stricter restrictions on competition under Europe's comprehensive new rulebook known as the Digital Markets Act, which prohibits the company from selling its products to third-party services. They may be forced to open up.
Last year, Apple nearly won an antitrust lawsuit brought by rival Epic Games, maker of the popular video game series Fortnite. A federal appeals court found that Epic failed to argue that Apple controlled its app store monopoly under federal law, but instead forced developers to use its payment service without informing consumers of alternatives. The court ruled that the company violated California competition law by forcing them to do so.
Big tech companies, including Facebook's parent company Meta and Microsoft, have since argued that Apple's plan to abide by the decision is deeply flawed.
The latest lawsuits allege that Apple is interfering with apps that allow consumers to easily switch smartphones, blocking mobile cloud streaming services that allow them to enjoy products outside of the company's ecosystem, and blocking alternative messaging services. They claim that they have maintained their monopoly on the iPhone by lowering the quality of apps.
The Justice Department's lawsuit is the Biden administration's latest salvo against big Silicon Valley companies over claims they stifle competition through monopolistic and anticompetitive practices.
The Justice Department sued last year to break up Google's digital advertising business and is battling the company in court in a separate case targeting Google's dominance in search that began under the Trump administration.
Meanwhile, the Federal Trade Commission is leading an antitrust case against Amazon, accusing the e-commerce giant of abusing its power to suppress competitors, and Amazon previously sued Mehta over its dominance in social media. was.
The Biden administration has pledged to fight consolidation more aggressively than previous administrations.
Under Mr. Garland, the department has hired a big-name antitrust lawyer to lead the department and won battles against mergers in the health care and publishing industries.
In January 2023, law enforcement filed a high-stakes lawsuit challenging Google's dominance in the online advertising industry. And in March, JetBlue Airways and Spirit Airlines announced they were canceling their merger plans after the Department of Justice filed a successful lawsuit against the companies.
The Department of Justice is requesting a significant increase in the antitrust budget for fiscal year 2025 to strengthen its enforcement capabilities.
In 2019, the Justice Department launched a wide-ranging investigation into possible antitrust violations in the tech space, which evolved into a major investigation into some of Silicon Valley's most powerful companies, including Apple and Google.
