The U.S. Department of Justice and 16 states sued Apple on Thursday for monopolizing the smartphone market.
The DOJ alleges that Apple has maintained monopoly power in the smartphone market by violating the Sherman Act, one of the U.S.'s foundational antitrust laws. The DOJ said Apple maintains its illegal monopoly through contractual restrictions and fees limiting the functionality developers can offer iPhone users. The company also selectively restricts access between third-party apps and its operating system, the DOJ said.
The DOJ likened its case against Apple to the antitrust case against Microsoft in the early 2000s. That case resulted in Microsoft opening its operating system, a move the DOJ credits with spurring innovation and competition in the industry.
Today's complaint alleges that Apple has engaged in many of the same tactics that Microsoft used.
Ben MizerU.S. acting associate attorney general
"The landmark Microsoft case held a monopolist liable under the antitrust laws for leveraging its market position to undermine technologies that would have made it easier for users to choose different computer operating systems," U.S. Acting Associate Attorney General Ben Mizer said during a press conference on Thursday announcing the DOJ's lawsuit against Apple. "Today's complaint alleges that Apple has engaged in many of the same tactics that Microsoft used."
DOJ pursues Apple in antitrust case
U.S. Attorney General Merrick B. Garland said the DOJ's lawsuit challenges Apple's excessive fees for developers using the Apple App Store. These fees can reach 30% for being allowed into the App Store as well as for any in-app purchases. It's not the first time Apple has faced this argument, after Epic Games took the company to court.
Garland said it's also challenging Apple's high prices for its iPhones as well as Apple's lack of interoperability with other smartphones.
"Monopolies like Apple's threaten the free and fair markets upon which our economy is based," Garland said. "They stifle innovation, they hurt producers and workers, and they increase costs for consumers. If left unchallenged, Apple will only continue to strengthen its smartphone monopoly."
Indeed, Apple has made it "exceedingly costly and complex" to switch to another smartphone, New Jersey Attorney General Matthew Platkin said during the press conference.
"Apple has consistently and deliberately engaged in anticompetitive business practices designed to maximize their profits and profits for their shareholders while minimizing the ability of consumers to switch to a competitor or to otherwise cut their costs," he said.
President Joe Biden's administration has pursued antitrust cases against multiple big tech companies, including Amazon, Meta and Google. While the Federal Trade Commission's case against Meta was dismissed, the cases against Amazon and Google are ongoing.
In response to a question during the press conference about the DOJ's pursuit of major U.S. companies, Garland said the DOJ follows the U.S. antitrust laws.
"The Justice Department does not have a different rule for the powerful compared to the powerless," he said. "We look at the facts, we look at the law, we make the appropriate determinations."
Makenzie Holland is a senior news writer covering big tech and federal regulation. Prior to joining TechTarget Editorial, she was a general reporter for the Wilmington StarNews and a crime and education reporter at the Wabash Plain Dealer.
