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  • Chris Bratton - Tech Journalist

The Justice Department has filed a lawsuit against Apple Inc., accusing the company of monopolizing the smartphone market

The lawsuit alleges that Apple has restricted developers of apps, products, and services used on the iPhone, preventing them from offering alternatives that could lower costs for consumers. The alleged monopoly allows Apple to extract more money from consumers, software developers, publishers, and merchants. The lawsuit has been joined by 16 state and district attorneys general.

Apple has responded to the lawsuit by stating that it threatens the company's ability to provide innovative technology and could set a dangerous precedent. The company argues that the lawsuit is wrong on the facts and the law and that it will vigorously defend against it.

The lawsuit against Apple is seen as following in the legacy of previous challenges to monopolies, such as Standard Oil, AT&T, and Microsoft. The Justice Department aims to address Apple's alleged pattern of conduct over the past decade, which it claims has reinforced the company's monopoly power by excluding rivals, technologies, and stifling innovations.

Apple has previously faced scrutiny over its app store policies and the commissions it charges on in-app purchases. In 2020, Epic Games sued Apple, claiming that the company had unreasonable restraints on how it handles in-app payments. A federal judge ruled in 2021 that Apple had to allow developers to use payment options outside of its app store, which circumvented Apple's 30% commission on app transactions. However, the Supreme Court refused to hear appeals from both sides, and the case was considered a victory for Apple.

In addition to the lawsuit from the Justice Department, European Union regulators have accused Apple of violating antitrust laws, specifically in relation to its App Store rules for music streaming services.

Deputy Attorney General Lisa Monaco has stated that Apple has gone from revolutionizing the smartphone market to stalling its advancement. The lawsuit claims that Apple has maintained a chokehold on competition by locking its customers into the iPhone while locking its competitors out of the market. The lawsuit also highlights issues with iPhone limiting options on its products, such as messaging with users of other phones and the blocking of third-party developers from creating digital wallets to compete with the iPhone's tap-to-pay function.

The Justice Department has quoted Apple executives' comments against competition as part of its justification for the lawsuit. The lawsuit alleges that Apple has kept prices and fees high by blocking innovative super apps, suppressing mobile cloud streaming services, excluding cross-platform messaging apps, diminishing the functionality of non-Apple smartwatches, and limiting third-party digital wallets.

Apple has been accused of responding to competitive threats by imposing restrictive contractual rules and restrictions, allowing the company to extract higher prices from consumers, impose higher fees on developers, and throttle competitive alternatives from rival technologies.

Apple, headquartered in Cupertino, California, is one of the most profitable companies globally, generating significant revenue and net income.


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