The U.S. Department of Justice sued smartphone maker Apple on Thursday alleging the company maintained an illegal monopoly over the U.S. market.
The complaint, filed in the U.S. District Court for the District of New Jersey, alleges that Apple illegally keeps a monopoly over smartphones by selectively imposing contractual restrictions on developers and withholding critical access points from developers.
Thursday’s complaint marks the third time U.S. regulators have sued the company in the past 20 years.
The lawsuit alleges the California-based technology giant undermines apps, products and services that would otherwise make users less reliant on the iPhone, promote interoperability, and lower costs for consumers and developers. It further alleges Apple exercises its monopoly power to extract more money from consumers, developers, content creators, artists, publishers, small businesses, and merchants, among others.
“Consumers should not have to pay higher prices because companies violate the antitrust laws,” Attorney General Merrick Garland said Thursday. “We allege that 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. If left unchallenged, Apple will only continue to strengthen its smartphone monopoly.”
Apple said it plans to fight the lawsuit in court.
“This lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets,” Apple said 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. It would also set a dangerous precedent, empowering 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 Department of Justice was joined by 15 states and the District of Columbia in its lawsuit against Apple in the U.S. for violating the Sherman Antitrust Act.
Garland said Apple has become one of the most valuable companies in the world, largely because of the success of the iPhone. He noted Apple’s net income is larger than the Gross Domestic Product of more than 100 countries. Gross Domestic Product is used as a measure of economic output. He also said Apple’s share of the U.S. performance smartphone market was above 70%, and its share of the entire U.S. smartphone market exceeded 65%.
“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,” Garland said. “We allege that Apple has employed a strategy that relies on exclusionary, anticompetitive conduct that hurts both consumers and developers.”
