US sues Apple for illegal smartphone monopoly

The US Department of Justice and 16 attorneys general have accused Apple in a new antitrust lawsuit of operating an illegal monopoly in the smartphone market.

The DOJ and states accuse Apple of driving up prices for consumers and developers at the expense of making users more dependent on their iPhones. It alleges that Apple “selectively” imposes contractual restrictions on developers and withholds critical ways to access the phone, according to a press release.

“Apple exercises its monopolistic power to extract more money from consumers, developers, content creators, artists, publishers, small businesses and merchants, among others,” the DOJ wrote in a press release.

The government points to several ways in which Apple allegedly illegally maintained its monopoly:

“Apple responded to competitive threats by imposing a series of ‘Whac-A-Mole’ contractual rules and restrictions”

“For years, Apple has responded to competitive threats by imposing a series of ‘Whac-A-Mole’ contractual rules and restrictions that have allowed Apple to demand higher prices from consumers, impose higher fees on developers and creators, and compete suppressing alternatives from the market. rival technologies,” Jonathan Kanter, head of the DOJ’s antitrust division, said in a statement.

The case is filed in the U.S. District Court for the District of New Jersey.

Apple is the second tech giant the DOJ has taken on in recent years after filing two separate antitrust cases against Google over the past two administrations. It has reversed a long drought of technology monopolization cases since the landmark Microsoft lawsuit at the turn of the century. The case has been in the works for years, with reports first surfacing in June 2019 that the DOJ would begin handling antitrust investigations into the company.

App developers for Apple’s iOS have complained for years about the platform’s closed and often opaque marketplace. Among the most vocal are companies like Spotify that offer paid subscription services that Apple demands a 15 to 30 percent cut to offer on its platform. Additionally, Apple has its own apps that compete with those in the app store — the only place Apple lets users download apps for security reasons — which has created even more distrust among developers about whether they’re getting a fair shake. shot onto the market.

The House panel ruled that Apple had a monopoly on the distribution of iOS apps

Some developers reached Congress when a House subcommittee conducted its own investigation into the tech giants a few years ago. A 2020 report from that panel found that Apple had a monopoly position in the app distribution market on iOS. Lawmakers introduced legislation such as the Open App Markets Act and the American Innovation and Choice Online Act that aimed to prevent major platforms like Apple from giving their own products an advantage in their marketplaces over competitors. But more than two years after its introduction, neither has received a vote in either chamber.

Europe has preceded the US in its efforts to rein in technology. It has introduced new rules through the Digital Markets Act to rein in the power of the gatekeepers of major platforms, several of which are controlled by Apple. Earlier this month, the European Commission fined Apple 1.84 billion euros (about $2 billion) in connection with a complaint from Spotify about its restrictive app store practices. The EU said its investigation found that “Apple prohibits developers of music streaming apps from fully informing iOS users about alternative and cheaper music subscription services available outside the app.”

The DOJ will have its hands full with tech monopoly suits in the coming years. The company wraps up closing arguments in its search distribution case against Google in May and will then begin trial in the fall in a case over Google’s ad technology.

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