WASHINGTON: The US Department of Justice and 15 states on Thursday (Mar 21) filed a landmark lawsuit against Apple, alleging it used the powerful demand for its iPhone and other products to drive up prices for its services and hurt smaller rivals, the latest move in a US crackdown on Big Tech.
The lawsuit said Apple raked in hundreds of billions of dollars by allegedly making it difficult for consumers to switch to cheaper smartphones and devices.
The long-anticipated case against Apple sees the company clash with Washington after largely escaping US government scrutiny for nearly a half-century.
It joins Amazon, Google and Facebook-owner Meta which are also facing antitrust lawsuits in the United States.
“Consumers should not have to pay higher prices because companies violate the antitrust laws,” Attorney General Merrick Garland said in a statement.
“If left unchallenged, Apple will only continue to strengthen its smartphone monopoly.”
Dating back to its time as a marginal player in the personal computer market, Apple’s business model has long been based on charging users a premium for technology products where Apple dictates nearly all of the details of how the device works and can be used. The Justice Department seeks to unwind that business model by forcing Apple to offer users more choices around how apps can tap into the hardware that Apple designs.
News of the lawsuit sent shares in Apple down by as much as 4.3 per cent on Wall Street on Thursday.
The Justice Department, which was also joined by the District of Columbia in the lawsuit, alleges that Apple uses its market power to get more money from consumers, developers, content creators, artists, publishers, small businesses and merchants.
The 88-page lawsuit, filed in US federal court in Newark, New Jersey, said it was focused on “freeing smartphone markets from Apple’s anticompetitive and exclusionary conduct and restoring competition to lower smartphone prices for consumers, reducing fees for developers, and preserving innovation for the future”.
In the lawsuit, the US accused Apple of making its products worse for consumers to block competitors and cited five examples where Apple used mechanisms to suppress technologies that would have increased competition among smartphones – so-called “super apps,” cloud stream game apps, messaging apps, smartwatches and digital wallets.
