What to Know About the U.S. Apple Antitrust Lawsuit
The Department of Justice (DOJ) sued Apple on Thursday, accusing the tech giant of maintaining a monopoly over the smartphone market.
The complaint, which was filed with 16 state and district attorneys general, argues that Apple engages in anticompetitive behavior by restricting how third-party products can interact with its products, including apps, non-Apple smartwatches, and more.
[time-brightcove not-tgx=”true”]“For years, Apple responded to competitive threats by imposing a series of ‘Whac-A-Mole’ contractual rules and restrictions that have allowed Apple to extract higher prices from consumers, impose higher fees on developers and creators, and to throttle competitive alternatives from rival technologies,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. Attorney General Merrick Garland claimed in a press conference that Apple’s dominance comes “not by making its own products better—but by making other products worse.”
Apple argues the latest lawsuit would lead to government overreach that would restrict the company’s ability to freely design its technology. “This lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets,” said Apple in a statement. “If successful, it would hinder our ability to create the kind of technology people expect from Apple—where hardware, software, and services intersect.”
Apple’s shares fell more than 4% during trading on Thursday as of 2 p.m. ET.
Here’s what to know about the lawsuit.
What does the lawsuit allege?
The antitrust lawsuit alleges that Apple has violated Section 2 of the Sherman Act, which says that anyone who monopolizes, or tries to monopolize a part of the trade or commerce industry will be guilty of a felony.
The Justice Department alleges that Apple has monopoly power over the smartphone market because it favors Apple products—think: Apple Watch or Apple Wallet—over those of third-parties. “This is about opening the smartphone market and making sure that the emerging technologies of the future, the innovation, the creativity that American consumers want is ultimately available because of cases about the future,” a DOJ official said during a Thursday press call.
The complaint claims Apple has suppressed mobile cloud streaming services, blocked apps that would make it easier for users to switch between smartphone platforms, and made cross-platform messaging worse. For instance, an app called Beeper Mini that allowed Android users to use iMessage and send texts with blue bubbles, was shut down by Apple in December 2023. Apple’s conduct, the Department alleges, affects web browsers, news subscriptions, location services, and more.
Apple argues that the lawsuit would set a “dangerous precedent” and would allow the government to “take a heavy hand in designing people’s technology.”
“We believe this lawsuit is wrong on the facts and the law, and we will vigorously defend against it,” the company added.
It is not clear what relief the DOJ is seeking under this suit or how the outcome could affect consumers. If the court rules in the DOJ’s favor, it’s possible Apple could be forced to break up. A DOJ official said the consequences would have to be determined after a trial. “Equitable relief is on the table for Sherman Act Section Two violations and the range of possible remedies are supposed to not only redress violations but prevent their recurrence and fully restore competition that’s been lacking in the market,” the official said.
Apple’s other legal troubles
Thursday’s lawsuit is the third filed against the company by the DOJ since 2010. The department reached a settlement with Apple and five other tech companies in 2010 after they faced allegations of colluding to suppress workers’ salaries. In 2016, the company was forced to pay $450 million to settle allegations that it conspired with publishers to increase e-book prices.
In 2020, Epic Games, the maker of the popular video game Fortnite, sued Apple, arguing that requiring customers to get apps through the app store and pay for digital content inside an app using Apple’s system was a monopolistic practice. A judge in 2021 required Apple to let developers give consumers other payment options, but didn’t find that the company had an illegal monopoly in the issue at hand.
Across the pond, the European Union confirmed that it is investigating Apple’s decision to shut down Epic Games’ developer accounts, according to TechCrunch.
Apple is the last major tech giant to face a major federal antitrust case, as regulators continue to apply greater scrutiny to Big Tech practices with complaints filed against Google and Meta.
What Apple has said in the past about its practices
Apple has long defended its practices. In response to an E.U. antitrust complaint from Spotify in 2019, Apple said that its aim has always been to “grow the pie” and “create more opportunities not just for our business, but for artists, creators, entrepreneurs and every ‘crazy one’ with a big idea.”
After a 2020 House Judiciary antitrust subcommittee report on Big Tech claimed that Apple has “monopoly power” over software distribution on iPhones, the company pushed back: “We have always said that scrutiny is reasonable and appropriate but we vehemently disagree with the conclusions reached in this staff report with respect to Apple,” Apple said in a statement at the time. “Our company does not have a dominant market share in any category where we do business.”