Legal Showdown: Justice Department Alleges Apple’s Monopolistic Practices in Smartphone Market

The United States has launched a groundbreaking legal action against Apple, alleging the tech behemoth has monopolized the smartphone market and stifled competition.

In the lawsuit filed by the Justice Department, Apple is accused of wielding its control over the iPhone to unlawfully restrict competitors and limit consumer choices.

The complaint contends that Apple’s practices have hindered the growth of new apps and undermined the appeal of rival products. Apple has vehemently denied these allegations and has pledged to vigorously contest the lawsuit.

Filed in a federal court in New Jersey, the sprawling complaint alleges that Apple employed “a series of shapeshifting rules” to impede innovation and stifle competition. It accuses the California-based company of obstructing competitors from offering alternative services on the iPhone while making it challenging for users to switch to different operating systems.

Attorney General Merrick Garland asserted in a statement that Apple’s actions undermine apps, products, and services that could reduce reliance on the iPhone. He criticized Apple for erecting barriers that hinder users and developers from venturing outside its ecosystem.

At a news conference, Garland accused Apple of maintaining its monopoly by violating federal antitrust laws. He emphasized that consumers should not have to bear higher prices due to companies breaking the law and criticized Apple for locking its customers in while excluding competitors.

Garland pointed to the limitations experienced by iPhone users messaging non-Apple smartphones, such as restricted functionality and non-encrypted communications.

A Justice Department official disclosed to CBS that potential remedies, if the prosecutors prevail at trial, could include forcing Apple to alter contracts or even instituting structural changes within the company.

Responding to the lawsuit, Apple’s spokesman Fred Sainz rebuffed the allegations, labeling them as erroneous and affirming that Apple would vigorously defend itself. Sainz warned that the lawsuit jeopardizes Apple’s ability to innovate and deliver technology that consumers expect.

This marks the third time Apple has faced legal action from the Justice Department since 2009 and represents the first antitrust challenge against the company under President Joe Biden’s administration.

Anat Alon-Beck, a business law professor at Case Western Reserve University, criticized Apple for systematically excluding rivals from its ecosystem, which she argues harms start-ups, stakeholders, customers, and shareholders.

Apple has encountered mounting legal challenges over its iOS ecosystem and business practices. Last month, it was fined €1.8 billion by the EU for breaching competition laws related to music streaming.

According to the Justice Department, Apple commands over 70% of the US smartphone market and more than 65% of the broader global smartphone market.