Apple has found itself in a legal battle against the US Department of Justice which, alongside 15 states, filed a lawsuit on Thursday, accusing the tech giant of exploiting its dominance in the smartphone market to inflate prices and weaken competition.
The lawsuit contends that Apple’s business model, which has historically revolved around charging users a premium for its products while tightly controlling how the devices can be used, has given the company an unfair advantage. The Justice Department aims to challenge this model by pushing for greater user choice in how apps interact with Apple’s hardware.
Attorney General Merrick Garland stressed the significance of the case, stating, “consumers should not have to pay higher prices because companies violate the antitrust laws.” He further warned that if unchecked, Apple could strengthen its monopoly over the smartphone industry.
According to Reuters, the 88-page lawsuit, filed in US federal court in Newark, New Jersey, focused on “freeing smartphone markets from Apple’s anticompetitive and exclusionary conduct and restoring competition to lower smartphone prices for consumers, reducing fees for developers, and preserving innovation for the future.”
The lawsuit specifically targets Apple’s alleged suppression of technologies that could have increased competition in the smartphone industry, including “super apps,” cloud stream game apps, messaging apps, smartwatches, and digital wallets.
To reinforce its accusation that Apple deliberately made its products less compatible with competitors’ offerings, the government cited an email exchange involving late Apple co-founder Steve Jobs. The exchange noted Jobs saying it was “not fun to watch” consumers easily switching from iPhones to Android phones, and vowing to “force” developers to use Apple’s payment systems to lock in both developers and consumers..
In response to the lawsuit, Apple has issued a statement asserting that the “lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets.” The company also fears that the lawsuit could hamper its ability to innovate and deliver high-quality technology to consumers.
The specific changes sought by the Justice Department remain unclear, but the complaint calls for measures to prevent Apple from undermining competitors through its control over app distribution and software interfaces.
Apple’s legal woes extend beyond the U.S., with antitrust probes and legal challenges in Europe, Japan, and Korea. However, its App Store business model, which charges developers commissions of up to 30%, survived a previous legal battle against Epic Games.
