Apple is being sued in federal court by the US Department of Justice and over a dozen states, who claim the company violated antitrust laws by keeping its software and hardware products largely out of the reach of rivals. Apple’s so-called “walled garden” business model makes it tough for competitors to compete and for customers to move to other brands. The complaint was filed shortly after Apple was fined €1.8 billion ($1.95 billion) by the European Commission. The panel found that Apple forbade music streaming providers from “informing iOS users about alternative and cheaper music subscription services available” that were not offered by the App Store.
“Apple undermines apps, products, and services that would otherwise make users less reliant on the iPhone,” Attorney General Merrick Garland wrote in a press release published by CNN. “Apple exercises its monopoly power to extract more money from consumers, developers, content creators, artists, publishers, small businesses, and merchants, among others.”
The complaint alleges that Apple has illegally monopolized the software app market, with the DOJ suggesting that the company used its control over iOS to block innovative apps and cloud streaming services from the public. The suit also suggests that Apple has made it harder for Android messages to appear on iPhones, obstructed rival payment platforms and restricted how competing smartphones integrated with iOS devices.
“By stifling these technologies, and many others,” the complaint reads, “Apple reinforces the moat around its smartphone monopoly not by making its products more attractive to users, but by discouraging innovation that threatens Apple’s smartphone monopoly.”
Apple has issued a statement regarding the suit, suggesting that it would hinder its ability to make the types of gadgets and software that made it one of the most valuable companies in the world. The company also said the lawsuit, if successful, would “set a dangerous precedent, empowering government to take a heavy hand in designing people’s technology.”
The New York Times first reported that the DOJ, which was apparently approaching the conclusion of a probe into the company, could file “a sweeping antitrust case” against Apple back in January. While the department initially focused on the the strategies the company took to protect the iPhone‘s dominance, it reportedly expanded its investigation’s scope to cover other aspects of Apple’s business. According to The Times’, the DOJ also looked into how the Apple Watch is capable of deeper integration with the iPhone than rival wearables’ and the fact that competing operating systems can’t access the company’s iMessage service.
This lawsuit against Apple is just the latest proof of the government’s increasing scrutiny on the biggest players in the tech industry. The Justice Department had previously accused Google of maintaining an unfair monopoly over search and search-related advertising, and it also filed a separate antitrust lawsuit accusing the company of illegally monopolizing the digital ads market. Meanwhile, the Federal Trade Commission filed an antitrust lawsuit against Amazon, accusing it of certain monopolistic practices that include prohibiting merchants from offering their goods at lower prices on other platforms. The commission and more than 40 US states sued Meta in 2020, as well, for buying former rivals Instagram and WhatsApp to squash competition.
