Apple Hit With DOJ Antitrust Suit

The Justice Department, along with a coalition of state attorneys general, initiated a comprehensive antitrust lawsuit against Apple on Thursday, alleging that the tech giant, valued at $2.7 trillion, has violated antitrust laws by monopolizing smartphone markets and inflating costs for consumers, developers, artists, and others.

Fifteen states, including California, New Jersey, Oklahoma, North Dakota, and Washington, D.C., joined forces in filing the complaint, lodged in a New Jersey federal court.

Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division highlighted Apple’s strategy of implementing restrictive contractual rules and limitations over the years, which, he claims, have enabled the company to extract higher prices from consumers, impose elevated fees on developers and creators, and stifle competitive alternatives from emerging technologies.

In response, Apple refuted these allegations, arguing that the lawsuit poses a threat to the company’s identity and the principles that distinguish Apple products in fiercely competitive markets. The company emphasized its commitment to defending against the lawsuit vigorously.

The Biden administration has prioritized addressing corporate power as a significant aspect of its domestic economic policy. This lawsuit represents the latest legal challenge faced by major tech firms. Apart from the lawsuit against Apple, the Justice Department also has ongoing legal battles against Google, focusing on its search and advertising operations. Additionally, the Federal Trade Commission is pursuing allegations against Amazon for inflating product prices and seeking to compel Meta to divest Instagram and WhatsApp.

Apple’s App Store, particularly its 30 percent commission structure on many transactions, has been a focal point of criticism from companies such as Epic Games, Spotify, and Match Group. However, the current lawsuit extends beyond the App Store to encompass antitrust violations across Apple’s mobile business. The government contends that Apple maintains its monopoly through contractual provisions with software developers and by withholding key features from rival hardware makers.

The lawsuit alleges that Apple’s conduct has resulted in limiting cloud streaming services, obstructing interoperability between iPhones and Android phones, making it challenging for competing smartwatches to integrate with iPhones, and impeding other payment providers from competing with its digital wallet.

Despite efforts by Apple to engage with senior DOJ officials in recent weeks to avert legal action, the lawsuit proceeded. Apple faces antitrust challenges globally, including recent fines from the European Commission and scrutiny from regulatory authorities in various countries.

This lawsuit marks the third antitrust case the DOJ has filed against Apple since 2010, signaling a concerted effort to address concerns related to market dominance and anti-competitive behavior.