The United States Justice Department on Thursday filed a landmark lawsuit against Apple, alleging the tech giant has unlawfully monopolized the smartphone market, hindering competition and innovation.
Filed in federal court in New Jersey, the lawsuit contends that Apple wields monopoly power over smartphones and engages in illegal conduct to maintain its control.
The complaint accuses it of squashing the growth of new apps and reducing the appeal of rival products.
Responding to the lawsuit, Apple refuted the allegations, stating that the lawsuit is misguided both factually and legally.
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“At Apple, we innovate every day to make technology people love — designing products that work seamlessly together, protect people’s privacy and security, and create a magical experience for our users,” the company is quoted by the HuffPost to have said in a statement. “This lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets.”
Under President Joe Biden’s directive, the Justice Department and Federal Trade Commission have ramped up enforcement of antitrust laws, sparking debates over governmental reach in corporate matters.
The lawsuit zeroes in on Apple’s tightly controlled ecosystem, often referred to as a “walled garden,” built around its flagship products like the iPhone, iPad, Mac, and Apple Watch, enabling seamless integration of hardware and software.
Despite its success, Apple’s shares have experienced a decline amid concerns over antitrust scrutiny and perceived lag in AI development compared to rivals like Microsoft and Google.
Antitrust regulators argue that Apple’s walled garden serves as a barrier to competition, allowing the company to maintain high prices and profit margins while stifling innovation.
Attorney General Merrick Garland in a statement, said the company “undermines apps, products and services that would otherwise make users less reliant on the iPhone, promote interoperability and lower costs for consumers and developers”.
The lawsuit against Apple is part of a broader antitrust crackdown by the Biden administration, which has also targeted tech giants like Google and Amazon for alleged anti-competitive practices.
Apple’s legal battles include a recent case with Epic Games over its App Store policies, where a federal judge ruled partially in favor of Apple but mandated changes to allow alternative payment options within apps.
Additionally, Apple faced regulatory pressure in Europe to open its ecosystem to competing app stores, though critics argue the company’s compliance efforts may fall short of promoting genuine competition.
