The Department of Justice (DOJ) has taken legal action against tech giant Apple, alleging monopolistic behavior within its iPhone ecosystem.
The lawsuit, filed by the DOJ and supported by 16 attorneys general, asserts that Apple’s practices have led to an “astronomical valuation” while harming consumers, developers, and competing phone manufacturers.
According to the DOJ, Apple’s anti-competitive tactics extend beyond its iPhone and Apple Watch businesses to encompass its advertising, browser, FaceTime, and news offerings.
The government has not ruled out the possibility of breaking up Apple, one of the world’s largest companies, if the lawsuit proves successful.
The lawsuit alleges that Apple’s actions have solidified its dominance in the smartphone market, citing instances where the company blocked cross-platform messaging apps, restricted third-party wallet and smartwatch compatibility, and disrupted non-App Store programs and cloud streaming services.
Apple’s shares experienced a decline of over 4% following the lawsuit’s announcement, indicating investor concern over the potential impact on the company’s future.
READ ALSO: US House to vote on TikTok ban
U.S. Attorney General Merrick Garland emphasized the significance of challenging monopolistic power, stating that Apple’s control over the smartphone market must be addressed to prevent further strengthening of its monopoly.
“As set out in our complaint, Apple has that power in the smartphone market, if left unchallenged. Apple will only continue to strengthen its smartphone monopoly,” Garland said.
In response to the lawsuit, Apple issued a statement expressing disagreement with its premise and affirming its commitment to defending against it.
The company argued that compliance with regulations could hinder its ability to innovate and meet consumer demands, potentially setting a dangerous precedent for government intervention in technology development.
The lawsuit follows years of investigations into Apple’s business practices and previous DOJ cases, including disputes over e-book pricing and allegations of collusion with other technology companies.
Key points highlighted in the lawsuit include Apple’s limitations on cross-platform messaging, the exclusivity of its Apple Watch with iPhones, and its resistance to cloud streaming services on the App Store platform.
Apple’s ongoing legal battles extend beyond the DOJ lawsuit, with the company facing scrutiny from the European Commission over compliance with new regulations aimed at opening up its app store to competitors.
Even with these obstacles, Apple continues to showcase its financial strength, boasting global sales of $383 billion and net profits of $97 billion in 2023.
This places the tech giant at the very top of the Fortune 500 list, surpassing the GDP of more than 100 countries worldwide.