American technology giant Apple has been sued by President Joe Biden's administration for accusing the company of building an anti-competitive "fence" around its exclusive iPhone ecosystem.
The US Department of Justice (DOJ) has filed a lawsuit in New Jersey federal court, alleging that Apple uses “broad exclusionary practices” to make it more difficult for Americans to switch smartphones. and make it difficult for companies to provide apps, products and services to iPhone users. The federal government along with 16 state attorneys general joined in filing this civil lawsuit.
The US government sued Apple.
US Attorney General Merrick Garland said: “Consumers should not pay higher prices because companies violate antitrust laws. We allege that Apple has maintained monopoly power in the smartphone market, not only by outperforming its competitors in value but also by violating federal antitrust laws. If left unchallenged, Apple will continue to consolidate its smartphone monopoly.”
The lawsuit argues that the iPhone's monopoly has given the company an "sky-high valuation" — its market capitalization is more than $2,6 trillion, second only to Microsoft's $3,2 trillion. – causing harm to consumers and other technology companies. The company's shares fell 4,1% after the DOJ lawsuit was announced, wiping more than $100 billion in market value.
The case took place just weeks after the EU fined Apple 1,84 billion euros ($2 billion) for violating the bloc's competition laws. The company allegedly blocked rival service providers, such as Spotify, from notifying iPhone users about cheaper music subscription alternatives.
Apple is also said to monopolize the smartphone application market by blocking advances from competitors.
The company has denied the US Department of Justice's claims. A company spokesperson told the media that a lawsuit is possible “hamper our ability to create the kind of technology people expect from Apple – where hardware, software and services intersect. It would also create a dangerous precedent, empowering governments to heavily intervene in the design of human technology].”
If successful, the lawsuit could force Apple to change some of its most profitable products, including the iPhone and Apple Watch. The incident could even result in the company being forced to sell off some of its business to boost competition. According to Counterpoint Research, iPhone accounted for 64% of the US smartphone market share in the fourth quarter of last year, far surpassing Samsung's 4% market share.
