Home Tech US accuses Apple of monopolizing smartphone market in sweeping lawsuit

US accuses Apple of monopolizing smartphone market in sweeping lawsuit

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US accuses Apple of monopolizing smartphone market in sweeping lawsuit

The U.S. government filed a sweeping antitrust lawsuit against Apple on Thursday, alleging the tech giant illegally prevented competition by restricting access to its software and hardware. The case poses a direct challenge to the company’s core products and practices, including its iMessage service and the way devices such as the iPhone and Apple Watch connect to each other.

The lawsuit, filed in federal court in New Jersey, alleges that Apple has monopoly power in the smartphone market and uses its control over the iPhone to “engage in broad, sustained, and unlawful conduct.” The complaint says the case aims to “liberate smartphone markets” from Apple’s anticompetitive practices, arguing that the company has thwarted innovation to maintain its market dominance.

“Apple has maintained its power not because of its superiority, but because of its illegal exclusionary behavior,” US Attorney General Merrick Garland said at a press conference on Thursday. “Monopolies like Apple’s threaten the free and fair markets our economy relies on.”

The U.S. Department of Justice’s lawsuit against Apple is a landmark case targeting the world’s most valuable publicly traded company and follows a series of antitrust lawsuits targeting big tech. Amazon, Apple, Meta and Google have all been investigated by regulators in recent years, both in the United States and Europe, following allegations that they consolidated their power while illegally stifling competition. All of them have market capitalizations in excess of a trillion dollars.

At the heart of the case is the question of whether Apple’s strategy of preventing competing companies from accessing various proprietary features such as its iMessage instant messaging service and Siri virtual assistant constitutes anticompetitive practices. The case will also examine whether Apple, by making its devices integrate easily with each other but not with non-Apple products, creates unfair hardware limitations that block competitors’ entry into the market.

The Justice Department’s complaint alleges that Apple took several anticompetitive actions, including blocking innovative apps, diminishing the functionality of non-Apple smartwatches, limiting third-party digital wallets, and removing cross-platform messaging. The complaint argues that this has led to higher prices for consumers, as the company stifles meaningful competition.

“Apple creates barriers and makes it extremely difficult and expensive for users and developers to venture outside of the Apple ecosystem,” Garland said. The complaint alleges that these practices date back more than a decade and are part of a long-standing strategy by the company to target other technologies that threaten its market power.

Apple controls much of the smartphone market, overtaking Samsung last year to become the industry’s leading phone manufacturer, and it frequently emphasizes seamless compatibility between its products. Opposing tech companies, led by Google, have called Apple’s features creating a walled garden to the detriment of consumers, and encouraged regulators to investigate the practices. Apple agreed to improve texting between iPhone and Android in November.

One recent saga that has drawn regulators’ attention involves Apple’s interactions with messaging startup Beeper, which launched a product last year that would allow non-iPhone users to send and receive iMessages. Beeper launched its “Beeper Mini” app in December, but less than a week later Apple seemed to be finding ways to make it happen. disable app functions and issued a vague statement citing privacy and security concerns. Beeper attempted to restore its services, leading to back-and-forths between the companies that ultimately resulted in Apple blocking outside access to its iMessage capabilities.

“As much as we want to fight for what we think is a fantastic product that really should exist, the truth is we can’t win a game of cat and mouse with the biggest company in the world,” Eric said Migicovsky, CEO of Beeper. , then declared in a press release published on the company’s blog.

Beeper executives have spoken with investigators in recent months, according to the New York Times, alongside executives from the Tile tracking service. Apple’s AirTags product offers a similar function to Tile’s, and Tile representatives have repeatedly called on regulators and lawmakers to examine potential antitrust violations.

Speculation and media anticipation surrounding the antitrust lawsuit has been growing since the start of the year, with numerous reports that the government was in the final stages of filing the case. Apple’s lawyers met with an assistant attorney general, Jonathan Kanter, in February, Bloomberg reportedin a final attempt to dissuade the Justice Department from pursuing its case.

The Justice Department has been investigating whether Apple has violated antitrust laws since at least 2019, when the bureau began a wider campaign to investigate anti-competitive practices by big tech. This effort resulted in several high-profile antitrust cases, including a case focused on Google’s search engine that went to trial in 2023 and another based on Google’s advertising activity this is planned for later this year. The Federal Trade Commission has since launched antitrust lawsuits against Facebook’s parent company Meta and Amazon, which have not yet gone to trial.

European regulators are also putting pressure on Apple, including the European Commission which fined it 1.8 billion euros ($1.95 billion) for violating anti-competition laws. That investigation began after Spotify complained to regulators that Apple was imposing restrictions on its app store that harmed other music streaming providers in favor of Apple Music.

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