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Apple’s legal woes mount with new US lawsuit

Admire Moyo
By Admire Moyo, ITWeb's news editor.
Johannesburg, 22 Mar 2024
The US justice department says Apple undermines apps, products and services that would otherwise make users less reliant on the iPhone.
The US justice department says Apple undermines apps, products and services that would otherwise make users less reliant on the iPhone.

Tech giant Apple is being sued in the US for alleged monopolisation of the smartphone market.

The US justice department, joined by 16 other state and district attorneys general, yesterday filed a civil anti-trust lawsuit against Apple for monopolisation or attempted monopolisation of smartphone markets in violation of Section 2 of the Sherman Act.

The complaint, filed in the US District Court for the District of New Jersey, alleges Apple illegally maintains a monopoly over smartphones by selectively imposing contractual restrictions on, and withholding critical access points from, developers.

In a statement, the justice department says Apple undermines apps, products and services that would otherwise make users less reliant on the iPhone, promote interoperability and lower costs for consumers and developers.

It adds that Apple exercises its monopoly power to extract more money from consumers, developers, content creators, artists, publishers, small businesses and merchants, among others.

Through this monopolisation lawsuit, the Justice Department and state attorneys general are seeking relief to restore competition to these vital markets on behalf of the American public.

Apple has denied the allegations. “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,” says the firm in a statement.

The US lawsuit comes as Apple’s legal woes continue to mount. Earlier this month, the iPhone maker was slapped with a €1.8 billion (R37 billion) fine in the European Union for abusing its dominant position in the market for the distribution of music streaming apps to iPhone and iPad users (iOS users) through its App Store.

According to Counterpoint Research, Apple recently took the top spot globally, with smartphone shipments growing by 51% quarter-on-quarter and 2% year-on-year, to reach 74 million units in Q4 2023.

It notes Apple captured 61% of the market in the US and 20% in China, becoming the top smartphone vendor in both these countries.

“Consumers should not have to pay higher prices because companies violate the anti-trust laws,” says attorney general Merrick B Garland, on the latest lawsuit.

“We allege Apple has maintained monopoly power in the smartphone market, not simply by staying ahead of the competition on the merits, but by violating federal anti-trust law. If left unchallenged, Apple will only continue to strengthen its smartphone monopoly. The justice department will vigorously enforce anti-trust laws that protect consumers from higher prices and fewer choices. That is the justice department’s legal obligation and what the American people expect and deserve.”

As alleged in the complaint, the justice department adds that Apple has monopoly power in the smartphone and performance smartphones markets, and uses its control over the iPhone to engage in a broad, sustained and illegal course of conduct.

It notes this anti-competitive behaviour is designed to maintain Apple’s monopoly power, while extracting as much revenue as possible.

The complaint also alleges Apple’s conduct extends beyond these examples, affecting web browsers, video communication, news subscriptions, entertainment, automotive services, advertising, location services and more.

Apple has every incentive to extend and expand its course of conduct to acquire and maintain power over next-frontier devices and technologies, it adds.

“No matter how powerful, no matter how prominent, no matter how popular − no company is above the law,” says deputy attorney general Lisa Monaco. “Through today’s action, we reaffirm our unwavering commitment to that principle.”