Antitrust Lawsuit Filed Against Apple Alleging Smartphone Market Monopoly

By Amit Agrawal

Published on:

WASHINGTON – The Justice Department initiated legal action against Apple Inc. on Thursday, accusing the tech giant of monopolizing the smartphone market.

According to the lawsuit filed in New Jersey, Apple purportedly imposed restrictions on developers of apps, products, and services for the iPhone, which could have otherwise led to cost reductions for consumers. The alleged monopoly allegedly allows Apple to extract higher payments from consumers, software developers, publishers, and merchants. This lawsuit is supported by 16 state and district attorneys general.

Attorney General Merrick Garland stated, “Consumers should not suffer higher prices due to companies violating antitrust laws. We assert that Apple has maintained monopoly power in the smartphone market, not solely through competitive superiority but by breaching federal antitrust regulations.”

Apple Faces Criticism Over Developer Practices Both Apple and Google have faced scrutiny from developers regarding the commissions they charge on in-app purchases. Last year, Epic Games sued Apple, alleging the company’s “unreasonable restraints” on in-app payment methods.

In a ruling in 2021, a federal judge ordered Apple to allow developers to use payment options outside of its app store, bypassing Apple’s 30% commission on app transactions. This decision came after Apple removed the game Fortnite from its app store during a dispute over distribution terms.

The European Union also accused Apple in the same year of violating antitrust laws, claiming that the company distorts competition in the music streaming sector through its App Store rules. The EU executive commission objected to Apple’s App Store regulations for music streaming services, stating that they increase costs for consumers and limit their choices.

DOJ Allegations Against Apple The lawsuit against Apple alleges that the company has kept prices and fees high by:

  1. Blocking innovative super apps.
  2. Suppressing mobile cloud streaming services.
  3. Excluding cross-platform messaging apps.
  4. Diminishing the functionality of non-Apple smartwatches.
  5. Limiting third-party digital wallets.

Jonathan Kanter, assistant attorney general for the antitrust division, claimed that Apple modified contract rules and restrictions to maintain higher prices and fees.

“For years, Apple responded to competitive threats by imposing a series of ‘Whac-A-Mole’ contractual rules and restrictions that have allowed Apple to extract higher prices from consumers,” said Kanter.

Apple, headquartered in Cupertino, California, reported net revenues of $383 billion and net income of $97 billion last year, making it the most profitable company in the Fortune 500, according to the Justice Department.

Amit Agrawal I am a Marathi Blogger, Owner/Founder of 4 Years of Professional Blogging experience.

Close Help dada