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  • Voltaire Staff

Apple sued by US Justice dept over allegation of monopolising smarphone market



The US Department of Justice, along with 15 states, have filed a lawsuit against Apple accusing it of monopolising the smartphone market, stifling competition, and inflating prices.


Officials allege that Apple's pricing strategies, including charging up to $1,599 for an iPhone, have led to disproportionately high profits compared to industry peers.


The lawsuit, filed on Thursday, contends that Apple imposes fees on various business partners, including software developers and credit card companies, which indirectly burden consumers with higher prices while boosting Apple's profits, reported Reuters.


Regulators are suing Apple, along with other big companies like Google, Meta Platforms, and Amazon.


"Consumers should not have to pay higher prices because companies violate the antitrust laws," Attorney General Merrick Garland said in a statement. "If left unchallenged, Apple will only continue to strengthen its smartphone monopoly."


Since its early days as a small player in the personal computer market, Apple has relied on a business model that involves charging users higher prices for their technology products. The model allows Apple to have significant control over how the devices function and what they can do.


The Justice Department aims to change this by compelling Apple, which is valued at $2.7 trillion, to provide users with more options regarding how apps can interact with the hardware designed by Apple.


The 88-page lawsuit, filed in a US federal court in Newark, New Jersey, aims to address Apple's alleged anticompetitive behaviour and increase competition in smartphone markets.


The lawsuit accuses Apple of hindering consumer choice and innovation by suppressing technologies that could challenge its dominance, such as super apps, cloud stream game apps, messaging apps, smartwatches, and digital wallets, reported Reuters.


Citing an email exchange from Steve Jobs, the late co-founder of Apple, the Justice Department highlighted his dissatisfaction with how easily consumers could switch from iPhones to Android phones.


Jobs vowed to "force" developers to utilise Apple's payment systems, aiming to hold captive both developers and consumers within the Apple ecosystem.


The changes desired by the Justice Department remain unspecified.

However, the complaint calls for the court to prohibit Apple from leveraging its control over app distribution, contracts, and private software interfaces to stifle competition.


Apple has faced antitrust investigations and rulings in Europe, Japan, and Korea, along with legal challenges from competitors like Epic Games.


Recently, it, along with Meta Platforms and Alphabet's Google, came under investigation for potential violations of the European Union's Digital Markets Act. The lawsuit, if it goes against them, could result in substantial fines by the year's end.


In Europe, Apple's App Store model has been disrupted by the Digital Markets Act, which recently came into effect. Apple intends to allow developers to offer their own app stores without paying commissions.


However, competitors such as Spotify and Epic argue that Apple still imposes significant barriers to offering alternative app stores.

 

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