Apple was sued on Thursday by the U.S. Justice Department, 15 states, and the District of Columbia. The lawsuits claimed that Apple had broken federal antitrust law and was using illegal anticompetitive practices to maintain its monopoly over the smartphone market.
At a news conference, U.S. Attorney General Merrick Garland stated, “We allege that Apple has consolidated its monopoly power, not by making its own products better, but by making other products worse.”
Garland cited the iPhone 15 Pro Max’s price tag of around $1,600 and its dominant market share of more than 60% in the United States smartphone market.
The agency claims that Apple has tightened its grip on the American smartphone market by dictating how third-party businesses can use its products, rather than just via merit.
Historically, for instance, Android phones have been restricted to SMS standards and vivid green text bubbles, whereas iPhone users have been able to transmit each other high-quality images and videos via iMessage’s distinctive blue text bubbles.
Non-iPhone users will still see green bubbles, despite Apple’s announcement this year that it would improve communication between Android and iPhone this year with a new standard called RCS, which Google already uses.
Teenagers find iPhones more cool because of the obvious color difference between Android and iPhone users, according to the Wall Street Journal. Leading investment bank Piper Sandler discovered in October that 87% of teenagers own an iPhone and 88% anticipate getting one as their future phone.
The Department of Justice charges Apple with reacting to competition by raising the barriers and costs associated with customers leaving its ecosystem.
Assistant Attorney General Jonathan Kanter said at the news conference that “Apple’s conduct has resulted in less competition to lower the prices of smartphones for consumers.”
Kanter also claims that Apple charges developers “hefty fees” that “will cost the U.S. economy billions of dollars.”
When asked if iPhones would be inundated with dangerous apps during the press conference, Garland said that the complaint only targeted exclusionary behavior and did not target all forms of vetting that Apple performs on the App Store.
In response, Apple declared that the lawsuit “threatens who we are” and that it would make it more difficult for it “to create the kind of technology people expect from Apple.”
In a statement to CNN, Apple stated, “We believe this lawsuit is wrong on the facts and the law, and we will vigorously defend against it.”
According to Statista estimates, Apple is the biggest tech business that the DOJ has filed antitrust lawsuits against recently. Google was accused of monopolizing search and search advertising in an ongoing DOJ federal antitrust action, which led to the company’s historic trial last year. Throughout the trial, the DOJ closely examined Google’s partnership with Apple.