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DOJ Sues Apple For Monopolizing iPhone Market

By Nithya Bose in Apple News, posted March 22, 2024

The Department of Justice has accused Apple of monopolizing the iPhone ecosystem, inflating its market value detrimentally for consumers, developers, and competitors.

The lawsuit is backed by 16 attorneys general and filed in a New Jersey federal court.

It claims Apple's dominance spans beyond just the iPhone and Apple Watch, extending to its advertising, browser, FaceTime, and news services.

This lawsuit emerges against Apple's "walled-garden" approach.

The DOJ argues this has stifled competition and innovation.

DOJ says Apple restricted third-party app and service integrations, favoring its products and services.

The agency adds the tech giant maintained and possibly unlawfully extended its market dominance.

The US government is considering "structural relief," potentially hinting at a breakup of the tech giant.

A move like this hasn't been seen since the dissolution of the Bell System in 1982.

DOJ claims Apple has engaged in practices designed to lock consumers into its ecosystem.

These include limiting cross-platform functionalities and obstructing alternatives to its App Store and cloud services.

These actions not only inflate costs for consumers but also curtail their choices, harming the competitive landscape.

Apple's business model, which integrates hardware, software, and services, faces a significant challenge.

The tech giant made over $200 billion in iPhone sales and substantial revenues from the Apple Watch and services in 2023.

“If left unchallenged. Apple will only continue to strengthen its smartphone monopoly”

This means any mandated changes could have far-reaching effects on the company's profitability and operational strategies.

US Attorney General Merrick Garland said the Supreme Court defines monopoly power as “the power to control prices or exclude competition.”

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Garland said: “As set out in our complaint, Apple has that power in the smartphone market.

“If left unchallenged. Apple will only continue to strengthen its smartphone monopoly.”

An Apple spokesperson said: “This lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets.

“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.”

The lawsuit follows years of investigation into Apple's business practices, including previous DOJ actions regarding e-book prices and wage-fixing allegations.

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