The U.S. Department of Justice today announced it has filed an antitrust lawsuit against Apple. The lawsuit alleges that Apple illegally maintains a monopoly in the smartphone market with the iPhone and the device's locked-down ecosystem.
In a statement shared with MacRumors, Apple said the lawsuit is "wrong on the facts and the law," and the company vowed to "vigorously defend" itself:
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. 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. It would also set a dangerous precedent, empowering government to take a heavy hand in designing people's technology. We believe this lawsuit is wrong on the facts and the law, and we will vigorously defend against it.
The complaint was filed today in a U.S. District Court in New Jersey by the Justice Department and 16 other U.S. state and district attorneys general. Apple is accused of violating various U.S. federal and state antitrust laws, including the Sherman Act.
In its press release, the Justice Department highlighted some of the allegations:
- Blocking Innovative Super Apps. Apple has disrupted the growth of apps with broad functionality that would make it easier for consumers to switch between competing smartphone platforms.
- Suppressing Mobile Cloud Streaming Services. Apple has blocked the development of cloud-streaming apps and services that would allow consumers to enjoy high-quality video games and other cloud-based applications without having to pay for expensive smartphone hardware.
- Excluding Cross-Platform Messaging Apps. Apple has made the quality of cross-platform messaging worse, less innovative, and less secure for users so that its customers have to keep buying iPhones.
- Diminishing the Functionality of Non-Apple Smartwatches. Apple has limited the functionality of third-party smartwatches so that users who purchase the Apple Watch face substantial out-of-pocket costs if they do not keep buying iPhones.
- Limiting Third Party Digital Wallets. Apple has prevented third-party apps from offering tap-to-pay functionality, inhibiting the creation of cross-platform third-party digital wallets.
Apple's anticompetitive conduct also affects "web browsers, video communication, news subscriptions, entertainment, automotive services, advertising, location services, and more," according to the Justice Department.
Jonathan Kanter, Assistant Attorney General of the Justice Department's Antitrust Division:
For years, Apple responded to competitive threats by imposing a series of "Whac-A-Mole" contractual rules and restrictions that have allowed Apple to extract higher prices from consumers, impose higher fees on developers and creators, and to throttle competitive alternatives from rival technologies. Today's lawsuit seeks to hold Apple accountable and ensure it cannot deploy the same, unlawful playbook in other vital markets.
The entire complaint spans 88 pages.
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