The US Department of Justice has accused Apple of having an illegal monopoly on the smartphone market in a sweeping new antitrust lawsuit that aims to significantly change the Apple iPhone.
The Justice Department, along with 16 state and local attorneys general, accuses Apple of unreasonably raising prices for consumers and developers because users tend to trust its phones. The parties argue that Apple selectively imposes contractual restrictions on developers and hides important ways to access the phone to prevent competition.
“Apple uses its monopoly to extract more money from consumers, developers, content creators, artists, publishers, small businesses and merchants, among others,” the DOJ said.
The government points out several ways in which Apple illegally maintains its monopoly:
Suppressing “super apps” that span many different apps and break the lock on iOS, making it easier for iPhone users to migrate to other devices Blocking streaming cloud apps, including games, which reduce the need for a more expensive device Compromising the quality of messaging between iPhone and iPhone competitive platforms such as Android Limit the functionality of third-party smartwatches using iPhone and make it harder for Apple Watch users to switch from iPhone due to compatibility issues Ban third-party developers from creating alternative digital wallets with one-time payment functionality for iPhone
“For years, Apple responded to competitive threats by enacting a series of contractual rules and restrictions that allowed Apple to impose higher prices on consumers, impose higher fees on developers and creators, and inhibit competitive alternatives,” said the head of the Justice Department's antitrust division. Jonathan Kanter.
Law enforcement is asking the court to stop Apple from using its control over app distribution to thwart cross-platform technologies such as super apps and cloud streaming apps, stop it from using proprietary APIs to undermine cross-platform messaging technologies, smart watches and digital wallets, and prevent it from using contract terms with developers, accessory manufacturers, consumers or others to obtain, maintain, extend or perpetuate a monopoly. They also require the court to take any other measures necessary to restore competition.
At a news conference Thursday to announce the lawsuit, Justice Department Deputy Commissioner Lisa Monaco said Apple had “strangled an entire industry” by going from “revolutionizing the smartphone market to stopping it from growing.” Kanter added that Apple was a “significant beneficiary” of the Justice Department's lawsuit against Microsoft more than 20 years ago, and the case aims to “protect competition and innovation for the next generation of technology.”
US Attorney General Merrick Garland acknowledged the resource imbalance the government faces when confronted with a company worth trillions of dollars. “When you have an agency with large resources that we believe are harming the American economy and the American people, it is important for us to allocate our resources to protect the American people,” Garland said. “And this is certainly a case where individual Americans do not have the ability to protect themselves.”
In a statement, Apple spokesman Fred Saines said the lawsuit “threatens who we are and the principles that differentiate Apple products in fiercely competitive markets. If successful, it will hinder our ability to create the technology people expect from Apple – where hardware, software and services intersect. It will also set a dangerous precedent by allowing the government to take a heavy hand in developing technology for people. We believe this lawsuit is inconsistent with the facts and the law, and we will vigorously defend against it.”
Apple plans to drop the case, an Apple spokesman told reporters during a briefing with multiple media outlets on Thursday.
Source: The Verge
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