UPDATED 18:29 EDT / AUGUST 01 2024

APPS

Apple asks court to dismiss Justice Department’s antitrust lawsuit

Apple Inc. has requested the dismissal of a Justice Department lawsuit that alleges its business practices in the smartphone market breach antitrust rules.

The iPhone maker filed its motion today with the federal court in Newark, New Jersey that is presiding over the case. The move comes about five months after Justice Department officials filed the lawsuit. The department was joined by 16 state and district attorneys general.

The lawsuit accuses Apple of maintaining a monopoly in the smartphone market through illegal business practices. Furthermore, the Justice Department charges that the company is using its market position to raise prices for consumers, developers and content creators.

The lawsuit points to the Apple Watch as one example of Apple’s alleged anticompetitive behavior. Many of the smartwatch’s features are only available to users who also have an iPhone. According to the Justice Department, this requirement reduces consumers’ incentive to buy smartphones from rival handset makers and thereby harms competition. 

The lawsuit also accuses Apple of engaging in anticompetitive practices across a range of other areas. The list includes the cloud-based video game streaming, entertainment and advertising segments.

In its newly submitted motion to dismiss the case, Apple argues that it is not in fact a monopolist. The filing draws attention to the competition that the company faces from Samsung Electronics Co. Ltd. and Google LLC in the smartphone market.

“The complaint lacks well-pleaded allegations that Apple can charge supracompetitive prices or restrict output in the alleged smartphone markets, without simultaneously giving advantages to Samsung and Google that would quickly make such conduct untenable,” Apple’s motion reads.

To succeed, antitrust lawsuits must establish that the company being sued engages in a type of anticompetitive behavior known as exclusionary conduct. Apple claims that the Justice Department’s lawsuit does not demonstrate it engaged in such conduct. The company goes on to argue that “even if Apple’s conduct were actionable, the complaint does not connect that conduct to any anticompetitive effects.”

The filing also takes issue with the fact that the Justice Department accused Apple of engaging in anticompetitive conduct across a broad range of markets. “The Government’s attempt to broaden its case by making cursory references to numerous Apple products and services fails baseline federal pleading requirements,” Apple stated.

Bloomberg reported today that companies often ask to dismiss antitrust lawsuits, but rarely succeed when such cases are brought by the government. A hearing on Apple’s request is expected to be held later this year.

Image: Unsplash

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