The U.S. Justice Department announced Thursday a historic anti-trust lawsuit against Apple, alleging the tech company “relies on exclusionary anti-competitive conduct” to unlawfully maintain its smartphone market dominance.
Attorney General Merrick Garland said Apple “has maintained monopoly power in the smartphone market, not simply by staying ahead of the competition on the merits, but by violating federal antitrust law.”
“We allege that Apple has employed a strategy that relies on exclusionary anti-competitive conduct that hurts both consumers and developers,” he told reporters as he formally rolled out the lawsuit. “We allege that Apple has consolidated its monopoly power, not by making its own products better, but by making other products worse.”
The suit alleges that Apple’s conduct has harmed consumers by driving prices up, reducing market choices and reducing quality in apps, phones and accessories. It said Apple has been forcing developers to operate under rules “that insulate Apple from competition,” according to the agency.
It argues that Apple has sought to block and impede competitors at every turn within its proprietary ecosystem, from messaging systems to smartwatches and digital wallets.
“Apple has maintained its power not because of its superiority, but because of its unlawful exclusionary behavior,” Garland said.
The suit, which alleges “a broad, sustained, and illegal course of conduct,” is being joined by 16 state and district attorneys general. It has been filed in US District Court for New Jersey.
The iPhone accounted for more than half of Apple’s USD383 billion annual revenue reported in 2023.
The company’s stock plummeted on news of the announcement, falling nearly 6 percent to a nearly 10-month low after Garland’s news conference.
The suit comes after the Justice Department took action against Google, Meta and Amazon.
Apple said the legal challenge “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 government to take a heavy hand in designing people’s technology,” the company said in a widely reported statement.
