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DOJ and Multiple States Sue Apple, Accusing Monopolistic Behavior

 |  March 21, 2024

The US Justice Department, along with over a dozen states, has initiated a groundbreaking antitrust lawsuit against tech giant Apple.

The lawsuit, filed on Thursday, alleges that Apple has unlawfully monopolized the smartphone market. This action adds Apple to the growing list of Big Tech companies facing antitrust scrutiny from the US government, as reported by CNN.

The lawsuit follows years of allegations by critics who claim that Apple’s restrictive app store terms, high fees, and its “walled-garden” approach to hardware and software have stifled competition. Apple’s strategy, while renowned for making its technology user-friendly, has also been accused of limiting third-party companies’ interaction with its products and services, favoring its own products over competitors.

Responding to the lawsuit, Apple has vehemently denied the allegations and expressed its intention to contest them vigorously. The company’s practices, according to the Justice Department, extract more money from various stakeholders, including consumers, developers, content creators, and small businesses.

One example highlighted in the lawsuit is Apple’s preferential treatment of its own products, allowing iPhone users to send high-quality multimedia messages seamlessly while imposing limitations on similar features for Android users. Despite some concessions, such as improving text message quality for Android phones, Apple maintains a distinct differentiation, critics argue, creating what they describe as a class divide.

Related: Report: DOJ’s Apple Antitrust Suit Could Land Thursday

Furthermore, the lawsuit points out Apple’s control over its hardware, granting its products enhanced capabilities that are withheld from competitors. For instance, while Apple’s AirTags seamlessly interact with iPhones, rival products face significant limitations, enhancing the user experience for Apple’s own ecosystem.

Read full complaint here

The lawsuit also addresses Apple’s controversial 30% commission on most sales through its app store, a practice criticized by companies attempting to sell subscriptions. This high commission rate, they argue, is enforced due to Apple’s substantial share of the smartphone market.

In response to the lawsuit, Apple emphasized its commitment to innovation and user experience, expressing concern that legal action could impede its ability to continue providing consumer-friendly technology. The company highlighted its dedication to privacy, security, and seamless integration across its product range.

The lawsuit accuses Apple of leveraging its control over iOS, the iPhone operating system, to stifle innovation and competition in various sectors, including messaging, mobile payments, and smartwatches. By hindering the development of competing technologies, Apple allegedly strengthens its smartphone monopoly.

As the legal battle unfolds, it underscores the ongoing scrutiny faced by major tech companies over their market dominance and business practices. The outcome of this lawsuit could have far-reaching implications for the tech industry and competition regulations in the United States.

Source: Edition CNN