The tech giant Apple finds itself in the legal crosshairs once again as the US Department of Justice, along with 15 states, filed a lawsuit on Thursday alleging monopolistic practices in the smartphone market. This move comes as part of a broader crackdown on Big Tech firms, with Apple joining the ranks of companies like Google, Meta Platforms (formerly Facebook), and Amazon, facing regulatory scrutiny.
According to the lawsuit, Apple stands accused of monopolising the smartphone market, stifling competition, and inflating prices to the detriment of consumers. Attorney General Merrick Garland emphasised the importance of challenging such conduct, stating, “Consumers should not have to pay higher prices because companies violate the antitrust laws.”
Central to the allegations is Apple’s pricing strategy, with the company charging as much as US$1,599 for an iPhone and reportedly reaping larger profits than its competitors. Moreover, the lawsuit contends that Apple engages in behind-the-scenes practices that ultimately raise prices for consumers and bolster its own profits.
The Justice Department aims to disrupt Apple’s longstanding business model, characterised by its control over both hardware and software aspects of its devices. The lawsuit seeks to introduce more competition into the smartphone market by compelling Apple to offer users greater flexibility in app integration and usage.
Shares of Apple took a hit following news of the lawsuit, falling by 4.1% to close at $171.37 on Thursday. However, the tech giant has vehemently denied the allegations, asserting that the lawsuit threatens its ability to innovate and deliver high-quality products to consumers.
The White House has expressed support for robust enforcement of antitrust laws, indicating a broader governmental commitment to addressing concerns over market concentration and competition. The Justice Department’s lawsuit seeks various changes at Apple, including potential structural reforms to address alleged anticompetitive behaviour.
The 88-page lawsuit outlines several instances where Apple purportedly suppressed competition, such as impeding the functionality of rival messaging apps and smartwatches on its devices. Additionally, the complaint accuses Apple’s App Store policies of stifling competition in areas like streaming services for games.
While the specifics of the changes sought remain unclear, the Justice Department is pushing for measures to restore competitive conditions in affected markets and prevent Apple from leveraging its dominance to undermine rivals.
This legal action against Apple adds to the company’s existing challenges, including ongoing antitrust probes and lawsuits both domestically and internationally. With regulatory scrutiny intensifying globally, Apple faces mounting pressure to address concerns over its market practices and ensure a more competitive landscape in the tech industry.
