US Sues Apple Over Alleged iPhone Monopoly.
The US Department of Justice filed a lawsuit against Apple, accusing the tech giant of monopolizing the smartphone market and stifling competition. The lawsuit, joined by 16 states, alleges that Apple abused its control of the iPhone app store and its hardware and software to lock in customers and developers, limit competition, and raise prices.
- Key Allegations:
- Apple used its app review process to block apps seen as threats, such as super apps and streaming apps.
- The company made connecting iPhones to rival smartwatches difficult and blocked access to its tap-to-pay technology.
- Apple created a “social stigma” by distinguishing messages from rival phones with green bubbles.
- Apple’s Response:
- Apple denies the claims and says the lawsuit is “wrong on the facts and the law.”
- The company justifies its practices by citing privacy and security concerns and its right to choose business partners.
- Apple plans to fight the lawsuit vigorously and seek dismissal.
- Potential Outcomes:
- If the government wins, Apple could be forced to change its contracts and practices or even face a break-up.
- The case could take years to wind its way through the courts.
- Market Impact:
- Apple’s share of the US smartphone market is over 70%, and its global share is over 65%.
- Shares in Apple fell more than 4% after the lawsuit was announced.
- Context:
- This is the US government’s third legal action against Apple since 2009 and the first under President Biden.
- Apple faces a similar antitrust lawsuit against Google, Meta, and Amazon from the Justice Department.
- The company is also involved in legal battles with Epic Games and the European Union over competition issues.
This lawsuit signifies a growing challenge to Apple’s business practices and its dominance in the smartphone market.