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U.S. Sues Apple for “Illegally Monopolising iPhone, Smartphone Market”

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Apple Sued for Monopolizing iPhone
Credit: Getty images

The United States government, joined by 16 states and the District of Columbia, has filed a landmark antitrust lawsuit against Apple, accusing the tech giant of Monopolising the smartphone market and stifling competition. This move represents the most significant challenge to Apple’s dominance in the industry to date.

In an 88-page lawsuit filed in the U.S. District Court for the District of New Jersey, the Justice Department alleged that Apple violated antitrust laws by implementing practices intended to maintain its stronghold on the smartphone market and deter consumers from switching to competing devices.

The lawsuit accused Apple of using its control of the iPhone to restrict competitors and limit consumer options, thereby hindering innovation and throttling competition.

Attorney General Merrick Garland asserted that the company “undermines apps, products and services that would otherwise make users less reliant on the iPhone… and lower costs for consumers and developers.

“Apple creates barriers that make it extremely difficult and expensive for both users and developers to venture outside the Apple ecosystem,” Mr Garland said.

“Monopolies like Apple’s threaten the free and fair markets upon which our economy is based. They stifle innovation. They hurt producers and workers and increase cost for consumers,” Garland said on Thursday.

“If left unchallenged, Apple will only continue to strengthen its smartphone monopoly. But there’s a law for that,” he added.

According to the complaint, Apple employed various anti-competitive tactics, including blocking apps with broad functionality, suppressing mobile cloud streaming services, limiting third-party digital wallets, and diminishing the functionality of non-Apple smartwatches. These measures, the government argued, has prevented consumers and developers from fully leveraging alternative products and services.

Fred Sainz, a spokesperson for Apple, vehemently denied the allegations, stating that the lawsuit is “wrong on the facts and the law.” He emphasised Apple’s commitment to defending its practices, which he believed were essential for maintaining the high standards of technology and innovation associated with Apple products.

“The lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets.

“If successful, it would hinder our ability to create the kind of technology people expect from Apple – where hardware, software, and services intersect. It would also set a dangerous precedent, empowering the government to take a heavy hand in designing people’s technology,” the Apple spokesperson said.

The lawsuit marks the third time Apple has been sued by the Justice Department since 2009 and represents the first antitrust challenge against the company under President Joe Biden’s administration.

According to The New York Times, the lawsuit seeks to stop Apple from engaging in current practices, including blocking cloud-streaming apps, undermining messaging across smartphone operating systems and preventing the creation of digital wallet alternatives. It also demanded that Apple should pay an unspecified financial penalty.

“By tightly controlling the user experience on iPhones and other devices, Apple has created what critics call an uneven playing field, where it grants its own products and services access to core features that it denies rivals. Over the years, it has limited finance companies’ access to the phone’s payment chip and Bluetooth trackers from tapping into its location-service feature. It’s also easier for users to connect Apple products, like smartwatches and laptops, to the iPhone than to those made by other manufacturers.”

Critics also cited that Apple allows iPhone customers to send high-quality photos and videos seamlessly to one another, but multimedia texts to Android phones are slower and grainy.

The outcome of the lawsuit could have far-reaching implications for Apple’s business practices and the broader smartphone market.

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