After years of regulatory scrutiny, the United States is taking on Apple Inc. –arguably one of the most successful tech companies of all time –in a high-profile lawsuit signifying the government’s continued crackdown on Big Tech. The Justice Department filed an antitrust lawsuit accusing Apple of maintaining an iPhone monopoly over the industry, arguing this has fueled the growth of Apple into a nearly $3 trillion public company to the exclusion of other tech developers, all while harming consumers. Experts state that the lawsuit concludes years of regulatory investigations into Apple’s widely popular range of devices and services. The purpose of which has been to rein in the tech giant’s immense power over the industry. Let’s get into the details.
Background
The Justice Department, joined by 16 states, including the District of Columbia, filed an 88-page lawsuit that alleged Apple “violated antitrust laws with practices that were intended to keep customers reliant on their iPhones and less likely to switch to a competing device.” According to the government, Apple “prevented other companies from offering applications that compete with Apple products like its digital wallet, which could diminish the value of the iPhone, and hurts consumers and smaller companies that compete with it.” The government seeks to end Apple’s “smartphone monopoly” by taking aim at the companies most popular device –the iPhone.
What is in the Complaint?
The government argued in the complaint that “Apple has built a dominant iPhone platform and ecosystem that has driven the company’s astronomical valuation.” The government alleged that rather than respond to competitive threats in the tech industry, Apple has imposed “a series of shapeshifting rules and restrictions in its App Store guidelines and developer agreements that would allow[s] Apple to extract higher fees, thwart innovation, offer a less secure or degraded user experience, and throttle competitive alternatives.” The Justice Department concludes that Apple has “deployed this playbook across many technologies, products, and services,” which has amplified its “anticompetitive conduct” leading to limited competition in the smartphone market and having created a monopoly over smartphones.
The government stated this lawsuit is “about freeing smartphone markets from Apple’s anticompetitive and exclusionary conduct and restoring competition to lower smartphone prices for consumers, reducing fees for developers, and preserving innovation for the future.” The lawsuit centers on Apple’s alleged unlawful monopoly over smartphones by insulating its products from competition, hurting consumers and developers.
The lawsuit contains six claims for relief: four of the claims concern the monopolization of the performance of the smartphone market in the United States in violation of the Sherman Act, the fifth claim of relief is for violation of the New Jersey Antitrust Act, and the sixth claim is for violations of Wisconsin state law. The Justice Department concludes the lawsuit by asking the court to adjudge and decree that Apple “has acted unlawfully to monopolize, or in the alternative, attempt to monopolize, the smartphone market in the United States in violation of Section 2 of the Sherman Act.” The Justice Department asks the court to enjoin Apple from continuing to engage in anticompetitive practices and enter any preliminary or permanent relief necessary and appropriate to “restore competitive conditions in the markets affected by Apple’s unlawful conduct.”
Broader Regulatory Implications for Big Tech
Apple is the latest tech giant under siege by the federal government, which has been attempting to rein in the power of major tech companies over the last few years. The Biden administration has appointed persons at the Federal Trade Commission and the Justice Department to head up investigations specifically “focused on changing the laws to fit the modern era. Google, Meta, and Amazon are all facing similar suits.”
It is unclear what impact this lawsuit against Apple will have on consumers. Apple is planning to file a motion to dismiss the case within the next 60 days. According to reports, “In its filing, the company plans to emphasize that competition laws permit it to adopt policies or designs that its competitors oppose, particularly when those designs would make using an iPhone a better experience.” Historically, Apple has fought off other antitrust challenges and has defended its business practices in the past –emphasizing that its company “creates millions in new business.”
According to reporting by The NY Times, “the lawsuits reflect a push by the regulators to apply greater scrutiny to the companies’ roles as gatekeepers to commerce and communications.” The government has been building this lawsuit against Apple since 2019 and is “focused on Apple’s entire ecosystem of products and services.” The lawsuit is another example of the government attempting to rein in Big Tech to better market competition, protect consumer interests, and stop Apple from having a smartphone monopoly over the industry. Every major tech company faces a federal antitrust lawsuit. It will be interesting to see how Apple’s lawsuit plays out and whether it will lead to more government regulation over Big Tech.
Interested in Antitrust Lawsuits?
Check out Trellis! Trellis is an AI-driven, state trial court research and analytics platform. We make the fragmented U.S. state trial court system searchable through a single interface, offering comprehensive insights into judges, cases, and opposing counsel. Effortlessly track lawsuits across states and stay updated with ongoing litigation documents. Request a demo today and elevate your legal practice with our intuitive analytics and API.
Sources:
https://www.nytimes.com/2024/03/21/technology/apple-doj-lawsuit-antitrust.html
https://apnews.com/article/apple-antitrust-lawsuit-impact-iphone-9a1d1cd341b4f00ededb5b56d707374a
https://www.npr.org/2024/03/21/1239802162/apple-iphone-doj-monopoly-antitrust-lawsuit
Music: Disruptor’s Dance by Anka Mason
Blog Narration: Anka Mason
