New Jersey, Friday, March 22, 2024 – March The U.S. Department of Justice (DOJ), joined by 16 state attorneys general, filed a sweeping antitrust lawsuit against Apple Inc. on Thursday, accusing the tech giant of illegally monopolizing the smartphone market. 1
The lawsuit, filed in federal court in New Jersey, accuses Apple’s practices of stifling competition, harming consumers, and artificially inflating prices.
The detailed lawsuit can be read here 2
Sources said Apple intends to file a motion to dismiss the case and disagrees with the DOJ’s definition of the relevant market, suggesting the global smartphone market should be considered rather than just the U.S. market.
Apple also defended its position in a media statement in its defense.
The lawsuit is being brought before the US District Court for the District of New Jersey. Attorneys general representing New Jersey, Arizona, California, Connecticut, Maine, Michigan, Minnesota, New Hampshire, New York, North Dakota, Oklahoma, Oregon, Tennessee, Vermont, Wisconsin, and the District of Columbia are collaborating with the Department of Justice in filing the complaint.
The crux of the government’s argument centers around Apple’s control over the iPhone’s operating system or iOS.
The DOJ claims Apple restricts app developers from offering alternative payment methods within their apps, forcing them to use Apple’s in-app purchase system, which takes a commission on all transactions. The lawsuit also alleges that Apple makes it difficult for users to switch to competing devices by hindering data transfer and functionality of non-Apple apps on iPhones.
The lawsuit details a series of practices allegedly deployed by Apple to maintain its market dominance.
These include hindering the development of “super apps” – comprehensive applications that could consolidate multiple functionalities and reduce user dependence on iPhones.
Additionally, the government accuses Apple of blocking cloud-based streaming apps, like cloud gaming services, which could lessen the need for expensive iPhone hardware.
The suit claims Apple restricts communication between iPhones and competing platforms like Android, potentially limiting user choice. The complaint also alleges limitations on smartwatch compatibility, making it more difficult for users to switch between smartwatches and iPhones.
Finally, the DOJ says that Apple blocks the development of third-party digital wallets, preventing competition from alternative tap-to-pay options on iPhones.
The government argues that Apple responds to competitive threats with “a series of ‘Whac-A-Mole’ contractual rules and restrictions” designed to maintain its market power.
These practices, according to the DOJ, enable Apple to “extract higher prices from consumers, impose higher fees on developers and creators, and to throttle competitive alternatives.”
The lawsuit seeks court orders to compel Apple to:
Cease its control over app distribution to avoid undermining cross-platform technologies such as super apps and cloud streaming apps.
Stop using private APIs to stifle competition in messaging, smartwatches, and digital wallets.
Revise contractual terms with developers, accessory makers, consumers, and others to prevent monopolistic practices.
- Apple: https://justice.gov/opa/pr/justice-department-sues-apple-monopolizing-smartphone-markets[↩]
- Apple: https://storage.courtlistener.com/recap/gov.uscourts.njd.544402/gov.uscourts.njd.544402.1.0_3.pdf[↩]
