Apple faces legal action as the United States accuses it of abusing its monopoly
Thursday, the US Justice Department filed a lawsuit against Apple, claiming that the tech giant drove up iPhone costs by preventing software developers and mobile game businesses from giving better options.
In a federal court in New Jersey, the government has lodged an antitrust lawsuit against Apple, claiming the tech company restricted the features of competing hardware goods and utilized its monopoly on the iPhone to block rivals from providing innovative services like digital wallets.
Another allegation in the lawsuit is that Apple impedes users’ ability to transition to non-Apple devices, such Android cellphones.
Attorney General Merrick Garland stated that consumers should not be subjected to higher costs as a result of firms’ violations of antitrust laws.
According to Apple, the company will “vigorously” defend itself in court.
According to an Apple spokesperson, the company’s identity and the values that differentiate its products in highly competitive sectors are being jeopardized by this litigation. If it were to be successful, it would impede our capacity to develop the type of technology that Apple is known for—one that combines hardware, software, and services.
U.S. antitrust authorities have now dropped the last shoe on the four largest tech companies with their lawsuit against Apple.
Meta Platforms, Amazon, and Google have all been the targets of antitrust cases.
There have been demands for Apple to release more APIs for its iPhone software ecosystem from all corners of the globe. Apple was compelled by European law to adhere to strict, new regulations regarding online marketplaces, app stores, and search engines.
Following Epic Games’ 2020 lawsuit against Apple, the department has decided to take legal action. Epic claimed that Apple took a 30% cut of all purchases because it unlawfully linked its apps to its payment system.
The case was decided largely in favor of Apple by U.S. District Judge Yvonne Gonzalez Rogers, who determined that the corporation did not own a monopoly in the worldwide market for mobile games. Nonetheless, she did direct Apple to let programmers inform users about alternatives to the App Store for making purchases.
Apple maintains that its policy of limiting App Store downloads is essential for protecting the iPhone against malicious software and online scams.
For a long time, the lawsuit has been planned against Apple. Although it started in 2019, the inquiry really took pace once Jonathan Kanter was appointed senior antitrust official in the Biden administration in 2021.
A growing number of legal concerns have some experts and investors worried about Apple.
It may take years for the government’s case to unfold. However, Apple’s management is distracted by the case, which could hinder the growth of Apple’s subscription services business.
Apple remains the world’s second-largest firm by market value and generates quarterly profits in the tens of billions of dollars, despite a 7% decline in Apple stock so far this year.
Although revenue growth from iPhone hardware has slowed in recent years, Apple has been able to rely on growth from its App Store and related services, such as video and audio streaming, cloud storage, and news.
The App Store rakes in as much as 80% in profit, according to Oppenheimer analyst Martin Yang.
