The Department of Justice on Thursday accused Apple Inc. of exercising an illegal monopoly over smartphones in an expansive antitrust lawsuit that incorporates longstanding complaints from consumers and rival tech firms.
The Justice Department and 16 state attorneys general filed the lawsuit in U.S. District Court in New Jersey, saying the tech giant maintains its monopoly not by creating better products but by making rival products worse.
“Apple illegally maintains a monopoly over smartphones by selectively imposing contractual restrictions on, and withholding critical access points from developers,” the DOJ said in a statement. “Apple 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 mentions five ways that Apple’s alleged antitrust violations have manifested: restricting the functionality of rival apps, blocking the development of cloud-streaming apps and services, reducing the quality of cross-platform messaging so customers keep buying iPhones, diminishing the functionality of non-Apple smartwatches and limiting third-party digital wallet development.
“We allege that Apple has maintained monopoly power in the smartphone market, bit simply by staying ahead of the competition on the merits but by violating federal antitrust law,” U.S. Attorney General Merrick Garland said Thursday at a press conference. “If left unchallenged, Apple will only continue to strengthen its smartphone monopoly. The Justice Department will vigorously enforce antitrust laws that protect consumers from higher prices and fewer choices.”
Apple said it will fight the lawsuit, calling it “wrong on the facts and the law.” The big tech company said the legal action threatens its ability to produce groundbreaking technology and would set a dangerous precedent.
“This lawsuit threatens who we are and the principles that set Apple products apart in the fiercely competitive markets,” the company said in a statement. “If successful, it would hinder our ability to create the kind of technology people expect from Apple — where hardware, software, and services intersect.”
Federal regulators and rival companies have long accused Apple of operating a monopoly with aggressive policies that stifle competition.
Still, Thursday’s lawsuit is the first real challenge to Apple’s market position. While Android dominates the worldwide smartphone market, Apple still leads in the U.S. with an over 60% market share.
The lawsuit is the latest example of the Justice Department’s approach to aggressive enforcement of antitrust law that officials say is aimed at ensuring a fair and competitive market, even as it has lost some significant cases.
President Biden has directed the Justice Department and the Federal Trade Commission to enforce antitrust laws strenuously. The increased policing of corporate mergers and business deals has been met with resistance from some business leaders who have said the Democratic administration is overreaching, but it’s been lauded by others as long overdue.
• This article is based in part on wire service reports.
• Vaughn Cockayne can be reached at vcockayne@washingtontimes.com.