POLICY
POLICY
POLICY
DOJ sues Apple over antitrust violations related to iPhones
Updated:
The Department of Justice today sued Apple Inc., charging that the company prevented software and mobile game developers from offering new services on the iPhone and causing consumers to pay higher prices.
The DOJ’s antitrust complaint alleges that Apple used its sole control of the iPhone to stop rivals from offering services such as digital wallets and limited features on outside hardware. It also charges that the company makes it tough for users to switch to Android and other devices.
“Consumers should not have to pay higher prices because companies violate the antitrust laws,” Attorney General Merrick Garland said in a statement.
Apple begged to differ. “This lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets,” an Apple spokesman 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.”
Apple added that it designs products to “work seamlessly together, protect people’s privacy and security, and create a magical experience for our users. 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.”
Apple’s stock fell 4% today.
The suit is the latest in an antitrust onslaught against tech giants. The DOJ is also pressing a case against Google LLC’s search business as well as one against its control of advertising technologies. The Federal Trade Commission also filed suit against Meta Platforms Inc., saying its acquisitions of Instagram and WhatsApp muted competition. It also sued Amazon.com Inc. for its online retail dominance.
The investigation into Apple started in 2019 under the Trump Administration, with the DOJ coming close to going to court before being delayed in December 2021. It was reported in 2021 that the DOJ would make a decision on legal action in March 2022, which still hasn’t come to pass.
In January, it was reported that Justice was investigating whether Apple used unfair tactics to protect the iPhone’s market share. As part of their investigation, Justice officials were said to have reviewed the overall smartphone market and several of the other segments where the company competes.
The probe into Apple’s practices examined several key areas, notably the company’s services and products, such as wearables and payment technology. Concerns were raised over the Apple Watch’s integration with the iPhone, which could potentially sideline third-party smartwatches and give Apple an unfair competitive edge. Similarly, Apple’s Tap to Pay feature, introduced in 2022, which allows for seamless payment transactions using Apple devices, limits interoperability with competitors’ payment systems, possibly disadvantaging them.
Further investigation by the Justice Department explored Apple’s restrictions on cloud gaming services in the App Store and the preferential integration of its devices, such as the AirTag, with the iPhone. As part of its investigation, the DOJ also spoke to banks and payment app providers.
The news of the U.S. lawsuit comes after the European Commission, the European Union’s executive branch, fined Apple €1.84 billion ($2 billion) over the App Store’s so-called anti-steering rules earlier this month. Along with the fine, the EC also ordered Apple to end its anti-steering provisions, which prevented app developers from informing iOS users about alternative and cheaper subscription services.
Photo: Unsplash
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