Apple violated antitrust laws by obstructing fair competition to secure its iPhone advantage, the Justice Department argued Thursday in a long-awaited federal lawsuit, adding that Apple violated antitrust laws by obstructing fair competition to secure iPhone dominance. He argued that it has the potential to completely change the business model.
The lawsuit, filed in New Jersey federal court by the Justice Department and 16 state attorneys general, alleges that Apple is undercutting the smartphone market through unfair tactics such as high App Store fees and restricting developers’ access to key features of its products. It is alleged that the company maintains an illegal monopoly on the The result is higher prices and fewer choices for American shoppers.
“Consumers should not have to pay higher prices just because a company violates antitrust laws,” Attorney General Merrick Garland said in a statement. “We argue that Apple’s monopoly power in the smartphone market is not just an advantage over the competition, it violates federal antitrust laws.
This landmark case is perhaps the most significant enforcement action ever taken against Apple by the Justice Department, which has sued the company three times in the past 14 years. The Justice Department is also in a legal battle with Google over alleged antitrust violations, and the Federal Trade Commission is targeting Meta and Amazon.
Apple, led by CEO Tim Cook, was already in a bitter public battle with Fortnite maker Epic Games over App Store practices, including a policy of taking a 30% cut on purchases within the App Store. There is intense regulatory oversight in Europe.
Apple shares fell 2% in early trading Thursday. The Cupertino, California-based technology giant has a market capitalization of $2.71 trillion, second only to Microsoft’s $3.16 trillion.
Apple did not immediately respond to a request for comment.
“For years, Apple has responded to competitive threats by imposing a series of ‘whack-a-mole’ contractual rules and restrictions. This allows Apple to extract higher prices from consumers and higher prices for developers and creators. “Rival technology that could impose fees and stifle the competitiveness of other products,” said Jonathan Canter, head of the Justice Department’s antitrust division.
“Today’s lawsuit aims to hold Apple accountable and prevent it from deploying similar illegal strategies in other important markets.”
Apple’s alleged anti-competitive tactics include charging high fees to developers within the App Store, imposing strict contract restrictions, limiting the performance of external products such as smartwatches, and This includes eliminating third-party products such as messaging apps and digital wallets that threaten the empire. In a suit.
“Rather than respond to competitive threats by lowering smartphone prices for consumers or providing increased revenue for developers, Apple has made a series of changes to its App Store guidelines and developer agreements. It will counter the threat of competition by imposing rules and restrictions that allow Apple to charge higher fees, stifle innovation, provide a less secure or degraded user experience, and and suppress competitive alternatives,” the lawsuit states.
Ahead of the announcement, Wedbush analyst Daniel Ives said the Justice Department lawsuit will likely cause Apple headaches for years.
“While no changes to the business model are expected for now, Apple has no idea how to ultimately resolve this lawsuit, pay a hefty fine, and ultimately find some compromise with developers regarding the structure of the App Store. It is clear that we must find out,” Ives said in the memo. “This adds another layer to the Epic Games lawsuit challenging the structure of the App Store, which remains in flux.
The Post reported that Apple was launching a major charm offensive on Capitol Hill ahead of the antitrust crackdown, with executives and lobbyists meeting at the White House at least 87 times since President Biden took office. I was going.
Cook has personally visited the White House at least 11 times since 2021 for designated meetings with at least 15 officials.
Competition watchdogs have expressed concern that Apple could rely on its relationship with the Biden administration to avoid major antitrust enforcement.
