US claims Apple has ‘broad, sustained, illegal’ smartphone monopoly

The Justice Department lawsuit alleges the tech giant unlawfully hindered competition by limiting access to its software and hardware

On Thursday, the US government filed a comprehensive antitrust lawsuit against Apple, claiming that the tech giant has unlawfully hindered competition by limiting access to its software and hardware. The case directly challenges the company’s fundamental products and practices, including its iMessage service and the connectivity of devices like the iPhone and Apple Watch.

The lawsuit, filed in federal court in New Jersey, claims that Apple holds a monopoly in the smartphone market and leverages its control over the iPhone to carry out a “broad, sustained, and illegal course of conduct.” The complaint aims to “liberate smartphone markets” from Apple’s anticompetitive practices, asserting that the company has impeded innovation to maintain its market dominance.

“Apple has retained its dominance not due to its superiority, but due to its illegal exclusionary practices,” stated US Attorney General Merrick Garland during a press briefing on Thursday. “Monopolies such as Apple’s jeopardize the free and equitable markets that form the foundation of our economy.”

The US Department of Justice’s lawsuit against Apple represents a landmark case targeting the world’s most valuable publicly traded company, following a wave of antitrust lawsuits against major tech firms. Over recent years, regulators in the United States and Europe have investigated Amazon, Apple, Meta (formerly Facebook), and Google over allegations of consolidating power while unlawfully suppressing competition. All these companies have market capitalizations exceeding a trillion dollars.

Apple has denied the allegations in the lawsuit, stating that they pose a threat to the company’s fundamental operations.

“This lawsuit jeopardizes our identity and the principles that distinguish Apple products in highly competitive markets. If successful, it would impede our ability to develop the type of technology that users anticipate from Apple – a fusion of hardware, software, and services,” an Apple spokesperson stated. “It could also establish a risky precedent, granting the government substantial influence over the design of consumer technology. We contend that this lawsuit is unfounded in both fact and law, and we will vigorously oppose it.”

At the heart of the case is the question of whether Apple’s practice of preventing rival companies from accessing its proprietary features, such as the iMessage instant messaging service and Siri virtual assistant, amounts to anticompetitive behavior. Additionally, the case will explore whether Apple’s approach of enabling its devices to seamlessly integrate with each other, while not extending the same compatibility to non-Apple products, results in unfair hardware restrictions that impede competitors’ entry into the market.

The Department of Justice’s complaint asserts that Apple has engaged in various anticompetitive behaviors, such as impeding innovative apps, reducing the functionality of non-Apple smartwatches, restricting third-party digital wallets, and inhibiting cross-platform messaging. The complaint contends that these actions have led to increased prices for consumers, as Apple stifles meaningful competition.

Garland stated, “Apple erects barriers and makes it exceedingly challenging and costly for users and developers to venture beyond the Apple ecosystem.” The complaint alleges that these practices have persisted for over a decade and are part of a longstanding strategy at the company to target competing technologies that threaten its market dominance.

The lawsuit seeks several modifications to Apple’s business practices and requests an unspecified monetary penalty for its actions. It urges the court to prohibit Apple from utilizing terms and conditions in its contracts to solidify its monopoly and to cease using its app store and private APIs to impede the dissemination of cross-platform technologies.

Apple dominates a significant segment of the smartphone market, surpassing Samsung last year to claim the top spot as the industry’s leading phone maker. The company often highlights the seamless compatibility among its products. Conversely, rival tech firms, particularly Google, have criticized Apple’s features, labeling them as creating a closed ecosystem that is detrimental to consumers. These companies have urged regulators to investigate Apple’s practices. In November, Apple agreed to enhance texting between iPhones and Android devices.

A recent incident that caught the attention of regulators involved Apple’s dealings with the messaging startup Beeper. Last year, Beeper introduced a product that enabled non-iPhone users to send and receive iMessages. In December, Beeper launched its “Beeper Mini” app, but within a week, Apple seemingly disabled the app’s features and issued a vague statement citing privacy and security issues. Beeper attempted to restore its services, leading to a series of exchanges between the two companies, ultimately resulting in Apple blocking external access to its iMessage capabilities.

“We are committed to championing what we believe is a fantastic product that should exist. However, the reality is that we cannot prevail in a cat-and-mouse game with the world’s largest company,” stated Beeper’s CEO, Eric Migicovsky, in a blog post following the incident.

According to the New York Times, executives from Beeper have been in discussions with investigators in recent months, as have executives from the tracking service Tile. Tile has raised concerns about potential antitrust violations related to Apple’s AirTags, which offer a similar function to Tile’s product.

Speculation and anticipation surrounding the antitrust lawsuit have been mounting since the beginning of the year, with numerous reports suggesting that the government was close to filing. In February, Apple’s lawyers reportedly met with Assistant Attorney General Jonathan Kanter in a last-minute effort to dissuade the Justice Department from pursuing the case, as Bloomberg reported.

The Department of Justice has been investigating whether Apple violated antitrust laws since at least 2019, as part of a broader effort to probe anticompetitive practices in big tech. This initiative has led to several high-profile antitrust cases, including one involving Google’s search engine that went to trial in 2023, and another concerning Google’s advertising business scheduled for later this year. Meanwhile, the Federal Trade Commission has initiated antitrust lawsuits against Meta, Facebook’s parent company, and Amazon, although these cases have not yet gone to trial.

In Europe, regulators are also increasing scrutiny on Apple. The European Commission imposed a €1.8 billion ($1.95 billion) fine on Apple for violating antitrust laws. This investigation was triggered by a complaint from Spotify, alleging that Apple was imposing restrictions on its app store to the detriment of other music streaming providers in favor of promoting Apple Music.