The United States Department of Justice and 16 U.S. states have filed a lawsuit against Apple over allegations of anti-competitive practices to maintain its dominance of the smartphone market.
In the lawsuit filed on Thursday, the complainants accused Apple of forcing users to continue to use its devices by making it difficult for them to be able to switch to other devices.
The suit is particularly focused on the iPhone maker’s share of the premium smartphone sector. It accuses the company of increasing friction for those looking to switch to the competition. That includes things like “contractual restrictions” and the vetting process the company has long employed with its App Store.
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The complaint
Accusing Apple of stifling the competition, the complainants in the lawsuit stated:
- “For many years, Apple has built a dominant iPhone platform and ecosystem that has driven the company’s astronomical valuation.
- “At the same time, it has long understood that disruptive technologies and innovative apps, products, and services threatened that dominance by making users less reliant on the iPhone or making it easier to switch to a non-Apple smartphone.
- “Rather than respond to competitive threats by offering lower smartphone prices to consumers or better monetization for developers, Apple would meet competitive threats by imposing a series of shapeshifting rules and restrictions in its App Store guidelines and developer agreements that would allow Apple to extract higher fees, thwart innovation, offer a less secure or degraded user experience, and throttle competitive alternatives.
- “It has deployed this playbook across many technologies, products, and services, including super apps, text messaging, smartwatches, and digital wallets, among many others.
- “Apple’s conduct also stifles new paradigms that threaten Apple’s smartphone dominance, including the cloud, which could make it easier for users to enjoy high-end functionality on a lower priced smartphone—or make users device-agnostic altogether.”
Beyond smartphone market
The complainants added that Apple’s anticompetitive conduct not only limits competition in the smartphone market, but also reverberates through the industries that are affected by these restrictions, including financial services, fitness, gaming, social media, news media, entertainment, and more.
They noted that unless Apple’s anticompetitive and exclusionary conduct is stopped, it will likely extend and entrench its iPhone monopoly to other markets and parts of the economy.
- “For example, Apple is rapidly expanding its influence and growing its power in the automotive, content creation and entertainment, and financial services industries–and often by doing so in exclusionary ways that further reinforce and deepen the competitive moat around the iPhone,” they added.
The complainants said the case is about freeing smartphone markets from Apple’s anticompetitive and exclusionary conduct and restoring competition to lower smartphone prices for consumers, reducing fees for developers, and preserving innovation for the future.
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The 16 U.S. states joining the DOJ in the case include New Jersey, Arizona, California, Connecticut, Maine, Michigan, Minnesota, New Hampshire, New York, North Dakota, Oklahoma, Oregon, Tennessee, Vermont, Wisconsin, and the District of Columbia, acting by and through their respective Attorneys General.