Editor's PickInvesting

Apple Faces Lawsuit by US Over Smartphone Market ‘Monopoly’

1 Mins read

<?xml encoding=”utf-8″ ?????????>

Apple finds itself embroiled in a legal battle with the US Justice Department, accused of leveraging the iPhone to establish a monopoly that drove up prices for consumers and stifled competition.

The lawsuit alleges that Apple, the world’s second-most valuable company, achieved its “astronomical valuation” by impeding users and developers from leaving its ecosystem, rather than making it more appealing for them to stay. This was purportedly done by preventing competitors from offering rival services like digital wallets on the iPhone, suppressing mobile cloud streaming services, and creating barriers that made it costly and cumbersome for users to switch to rival smartphone operating systems, such as Google’s Android.

According to Lisa Monaco, the US Deputy Attorney General, Apple has “smothered an entire industry,” with over 250 million Apple devices in the US and a smartphone market share exceeding 65% in the country.

In response, Apple’s spokeswoman voiced strong opposition, stating that the lawsuit threatens the core principles that differentiate Apple products in competitive markets. She argued that a successful lawsuit would hinder Apple’s ability to innovate and create technology that meets consumer expectations, blurring the lines between hardware, software, and services. Apple believes the lawsuit is unfounded both factually and legally and vows to vigorously defend against it.

This lawsuit is part of a broader crackdown by the US government on tech giants, including Amazon, Facebook, and Google, with investigations launched in 2019 citing concerns about monopolistic behavior reminiscent of historical corporate titans.

Apple has also faced regulatory scrutiny in Europe, where it was compelled to modify its operating system to comply with new competition rules governing digital markets. This included opening up its app store system to allow rival stores on its devices, a move contested by Apple citing potential risks to users from scams and cyberattacks.

Similar regulatory measures are under consideration in the UK, with a digital markets bill making its way through the legislative process, prompting speculation about potential changes to Apple devices for British users.