Current:Home > MyU.S. hits Apple with landmark antitrust suit, accusing tech giant of stifling competition-InfoLens
U.S. hits Apple with landmark antitrust suit, accusing tech giant of stifling competition
View Date:2024-12-23 23:32:08
Washington — Apple Inc., one of the world's most valuable and influential companies, illegally engaged in anti-competitive behavior in an effort to build a "moat around its smartphone monopoly" and maximize its profits at the expense of consumers, the Justice Department alleged in a blockbuster antitrust lawsuit filed Thursday.
In a complaint filed in federal district court in New Jersey, the Justice Department accused the company of using its app development rules, iPhone features and hardware that customers use every day — including iMessage, Apple Wallet and smartwatches — to thwart competition and expand its business by charging higher prices. Fifteen states and the District of Columbia joined the Justice Department as plaintiffs in the suit.
"Apple has maintained monopoly power in the smartphone market not simply by staying ahead of the competition on the merits, but by violating federal antitrust law," Attorney General Merrick Garland said in remarks at Justice Department headquarters. "Consumers should not have to pay higher prices because companies break the law."
The Apple antitrust suit
In their 88-page complaint, government attorneys alleged Apple violated the Sherman Antitrust Act, including by employing "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."
Specifically, investigators alleged the tech giant — which brought in nearly $400 billion in revenue last year — boxed out its smaller competitors by blocking the expansion of so-called "super apps" that provide identical services across devices; disrupting messaging formats and capabilities between Apple and non-Apple devices; and monopolizing the use of tap-to-pay functions on iPhones to only the Apple Wallet.
Users have long been frustrated by discrepancies when sending messages between Apple and non-Apple products, including lower media quality, diminished editing capabilities and even different colors for the messages themselves. Garland said those issues were examples of Apple degrading users' experience to entice them to stay in the company's ecosystem.
"As any iPhone user who has ever seen a green text message or received a grainy, tiny video can attest, Apple's anti-competitive conduct also includes making it more difficult for iPhone users to message with users of non-Apple products," he said. "It does this by diminishing the functionality of its own messaging app, and by diminishing the functionality of third-party messaging apps."
Apple's alleged anti-competitive practices did not stop there, however, according to investigators. They also allegedly worked to stifle the use of non-Apple smartwatches by limiting how users interacted with them on the iPhone and used cloud streaming, location services and web browsers on iPhones to snuff out smaller rivals.
"Critically, 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," the complaint alleged. "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."
The government asked the court to order Apple to cease its allegedly anti-competitive activity and stop undermining cross-platform services and hardware. The plaintiffs said the court should take action needed to "restore competitive conditions in the markets affected by Apple's unlawful conduct."
In response to the suit, Apple said in a statement that the litigation "threatens who we are and the principles that set Apple products apart in fiercely competitive markets."
"If successful, it would hinder our ability to create the kind of technology people expect from Apple — where hardware, software, and services intersect. It would also set a dangerous precedent, empowering government to take a heavy hand in designing people's technology," the company said. "We believe this lawsuit is wrong on the facts and the law, and we will vigorously defend against it."
Apple is not the first behemoth in the tech space to face scrutiny from the Justice Department's antitrust division. Over the last few years, Google has faced two lawsuits — one during the Trump administration and another during President Biden's administration — that alleged monopolistic business practices.
Jo Ling Kent and Andres Triay contributed reporting.
- In:
- United States Department of Justice
- Apple
- Merrick Garland
- Antitrust
Robert Legare is a CBS News multiplatform reporter and producer covering the Justice Department, federal courts and investigations. He was previously an associate producer for the "CBS Evening News with Norah O'Donnell."
veryGood! (4)
Related
- After Baltimore mass shooting, neighborhood goes full year with no homicides
- NFL Week 5 injury report: Live updates for active, inactive players for Sunday's games
- Tropical Storm Milton could hit Florida as a major hurricane midweek
- Georgia Supreme Court halts ruling striking down state’s near-ban on abortions as the state appeals
- Kentucky woman seeking abortion files lawsuit over state bans
- Aw, shucks: An inside look at the great American corn-maze obsession
- Helene costs may top $30 billion; death toll increases again: Updates
- Texas still No. 1 in US LBM Coaches Poll but rest of college football top 10 gets reshuffling
- Are banks, post offices, UPS and FedEx open on Veterans Day? Here's what to know
- Veterans of Alaska’s Oil Industry Look to Blaze a Renewable Energy Pathway in the State
Ranking
- Cruel Intentions' Brooke Lena Johnson Teases the Biggest Differences Between the Show and the 1999 Film
- South Korean woman sues government and adoption agency after her kidnapped daughter was sent abroad
- Jax Taylor Refiles for Divorce From Brittany Cartwright With Lawyer's Help
- Mistrial declared again for sheriff accused of kicking shackled man in the groin
- Nevada Democrats keep legislative control but fall short of veto-proof supermajority
- Patriots captain Jabrill Peppers arrested on assault, strangulation, drug charges
- NASA, SpaceX delay launch to study Jupiter’s moon Europa as Hurricane Milton approaches
- Dave Hobson, Ohio congressman who backed D-Day museum, has died at 87
Recommendation
-
Jennifer Lopez Gets Loud in Her First Onstage Appearance Amid Ben Affleck Divorce
-
SpaceX launch: Europe's Hera spacecraft on way to study asteroid Dimorphos
-
Pilot dies in a crash of a replica WWI-era plane in upstate New York
-
Olivia Munn Details Journey to Welcome Daughter Méi Amid Cancer Battle
-
School workers accused of giving special needs student with digestive issue hot Takis, other abuse
-
Verizon says network disruption is resolved; FCC investigating outage
-
Patriots captain Jabrill Peppers arrested on assault, strangulation, drug charges
-
Ahead of hurricane strike, Floridians should have a plan, a supply kit and heed evacuation advice