Key Takeaways:
* The U.S. Justice Department files a lawsuit against Apple alleging illegal monopoly practices.
* The lawsuit seeks to stop Apple’s undermining of competitive technologies and monopolistic contract terms.
* The action also aims to promote increased competition and innovation in technology.
* Apple rejects the allegations, asserting it will aggressively defend against the lawsuit.
* Antitrust officials argue Apple’s “walled garden” strategy curtails competition and innovation while enabling high pricing.
(Source: [New York Daily News](https://www.nydailynews.com/2024/03/21/apple-has-kept-an-illegal-monopoly-over-smartphones-in-us-justice-department-says-in-antitrust-suit/))
The U.S. Justice Department, on Thursday, initiated a comprehensive antitrust lawsuit against Apple Inc., blaming the tech behemoth of managing an illegal monopoly on smartphones that bars competitors and impedes innovation. This suit was filed in a federal court in New Jersey.
The Dominance of Apple
The filing alleges that Apple possesses monopolistic power in the smartphone sector. It asserts that the company uses its control over the iPhone to engage in a broad, sustained, and unlawful pattern of conduct. Among other things, the lawsuit seeks to halt Apple from undermining technologies that compete with its apps in areas like streaming, messaging, payments, and more.
Jonathan Kanter, Assistant Attorney General and head of the antitrust division, voiced confidence in the Department of Justice’s enduring legacy of taking on potent monopolies during a press conference to announce the lawsuit.
Apple’s Rebuttal
Apple denounced the lawsuit as misconceived, in terms of facts and law, and pledged to vigorously defend itself against it. According to Apple, if the lawsuit prevails, it would undermine their capacity to create the technology that customers expect from them and set a hazardous precedent of government interference in technology design.
Despite certain business leaders criticizing the surge in corporate merger surveillance and business deal regulation, others have lauded it as long overdue. President Joe Biden urged the Justice Department and the Federal Trade Commission to enforce antitrust statutes rigorously.
The Case Against Apple
The newly filed case targets the digital fortress that Cupertino, California-based Apple Inc., has meticulously constructed around iPhone and other widely-used products like iPad, Mac, and Apple Watch. This strategy, commonly referred to as a “walled garden,” has helped Apple become the world’s most prosperous company, with nearly $400 billion in annual revenues.
Criticism of these monopolistic practices has been prevalent, alleging that Apple’s claim to prioritize user privacy is contrived when profits are on the line. Consumer Reports senior researcher, Sumit Sharma, has accused Apple of eroding privacy via their app store fee structure and partnership with Google search.
Antitrust and the Implications
Antitrust regulators, in their complaint, argued that Apple’s walled garden most notably serves to fend off competition, allowing them to command higher prices and boost its considerable profit margins while hindering innovation.
Attorney General Merrick Garland said, “We allege that Apple has maintained monopoly power in the smartphone market, not merely by staying ahead of the competition on the merits, but by contravening federal antitrust laws. Should this go unchallenged, Apple will only further strengthen its smartphone monopoly.”
In conclusion, the Biden administration’s efforts to rein in Apple’s dominance exemplifies a wider antitrust push. This movement has provoked lawsuits against Google and Amazon, who stand accused of engaging in illegal tactics to thwart competition. Despite experiencing some failures in attempts to bar acquisitions by companies like Microsoft and Facebook, the government shows no signs of slowing down. If anything, this lawsuit against Apple signals the intensification of crackdown efforts and the U.S. government’s unwavering commitment to ensuring a fair and competitive tech market.