Apple sued by Biden administration in landmark case over iPhone monopoly

(NEW YORK) — The Biden administration sued Apple on Thursday, alleging the tech giant created a monopoly in the smartphone market by blocking competitors from accessing hardware and software features of the iPhone.

The lawsuit, filed by the Department of Justice in federal court in New Jersey, is the latest in a series of efforts by the Biden administration to rein in what it argues is unlawful anticompetitive behavior by some of the nation’s largest tech companies. Sixteen state and district attorneys general joined the DOJ in bringing the case.

“We allege that Apple has maintained monopoly power in the smartphone market, not simply by staying ahead of the competition on the merits, but by violating federal antitrust law,” Attorney General Merrick Garland said in a statement announcing the lawsuit. “If left unchallenged, Apple will only continue to strengthen its smartphone monopoly.”

In the lawsuit, the department claims Apple has used its control over the iPhone to “engage in a broad, sustained, and illegal course of conduct” designed to maintain its control over the smartphone market and prevent its rivals from attracting consumers.

Apple strongly rebuked the lawsuit in a statement to ABC News.

“At Apple, we innovate every day to make technology people love — designing products that work seamlessly together, protect people’s privacy and security, and create a magical experience for our users,” the company said. “This lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets.”

“We believe this lawsuit is wrong on the facts and the law, and we will vigorously defend against it,” Apple added.

Among the actions alleged by DOJ, Apple has sought to block the spread of “SuperApps” that make it easier for consumers to switch between smartphone platforms. The DOJ accuses Apple of blocking development of cloud streaming apps and services that would make it easier for consumers to play high-quality games and other apps without paying for accompanying hardware.

Apple is also accused of deliberately making the quality of cross-platform messaging worse and less secure to incentivize users of other smartphones like Android to instead switch to an iPhone.

Speaking in Washington, D.C., on Thursday, Garland accused Apple of abusing its smartphone dominance to erase competition and hurt consumers.

Over the last two decades, Apple has become one of the most valuable public companies in the world,” Garland said. “That is in large part due to the success of the iPhone.”

“Apple has maintained monopoly power in the smartphone market not simply by staying ahead of the competition on the merits but by violating federal antitrust law. Consumers should not have to pay higher prices because companies break the law,” Garland added.

The lawsuit against Apple adds another confrontation between the Biden administration and big tech over antitrust concerns.

In September, the Federal Trade Commission sued Amazon for illegally maintaining its monopoly power “to inflate prices, degrade quality, and stifle innovation for consumers and businesses.” Amazon rejected the allegations and vowed to fight the case in court.

That same month, the trial began in a case brought by the DOJ against Google in an effort to rein in its dominance over the online search market. Google argued that its success in the sector owed to its superior product.

Copyright © 2024, ABC Audio. All rights reserved.