Explained: Why the US Government Is Suing Apple For Alleged Monopoly and Antitrust Violations
Unsplash | Published: March 21, 2024
Claim Form Deadline: Ongoing
Estimated Payout: Varies
US Department of Justice and 17 States File Antitrust Lawsuit Against Apple
On March 21, 2024, the US Department of Justice filed a lawsuit against Apple, along with 17 US states, alleging that the tech giant has maintained an illegal monopoly over its iPhones, resulting in inflated costs for consumers and hindering innovation.The lawsuit centers around Apple's app store, which requires strict adherence to certain conditions from developers looking to reach the iPhone's vast user base of 136 million Americans. According to the lawsuit, these regulations and policies are intentionally designed to keep Apple users within their ecosystem and locked into purchasing the company's high-priced hardware products.
Attorney General Merrick Garland stated, "consumers should not have to pay higher prices due to companies violating antitrust laws", adding that if unchecked, Apple will only further solidify its dominance in the smartphone market.
The case takes aim at various business practices employed by Apple that it claims enriches the company while harming both innovation and technological advancement for customers. In response, Apple has disputed the charges, stating they were "wrong on the facts and the law" and vowing to mount a rigorous defense.
Prosecutors allege that Apple has actively suppressed their emergence on the iPhone platform. Additionally, the lawsuit criticizes Apple Pay - currently the sole payment solution enabled on iPhones for contactless transactions - arguing that smaller competitors must pay fees to integrate with it.
Apple's messaging applications face criticism too; according to the lawsuit, Apple makes communication between iOS and Android device users challenging, thereby pressuring them towards opting for costlier iPhones instead. Additional areas targeted include web browsers, entertainment platforms, and car-related technologies where similar anti-competitive behaviors are alleged.
As part of efforts to diversify income streams beyond the iPhone (introduced back in 2007), Apple has recently ploughed resources into expanding service offerings alongside hardware sales. However, given sluggish growth rates in iPhone sales, there is increasing pressure on the firm to explore alternative avenues of revenue generation.
Apple boasts profit levels surpassing all corporations listed in the Fortune 500, generating revenues greater than the GDP of over 100 individual countries worldwide.
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