The Biden administration filed a sweeping antitrust lawsuit against Apple Thursday that targets a product that has long been the major revenue driver for the company’s $2.76 trillion business: the iPhone.
The Department of Justice, joined by 16 state attorneys general, accused Apple in a New Jersey federal court of maintaining a monopoly on the US market for smartphones, of which the iPhone makes up 65 percent. The complaint alleges that Apple has deliberately thwarted apps, products, and services that would make it easier for users to switch from the iPhone to other smartphones and lower costs for consumers and developers.
The company responded in a public statement Thursday that the lawsuit sets a “dangerous precedent, empowering government to take a heavy hand in designing people’s technology.”
Apple was one of the last remaining big tech companies that had yet to be hit with an antitrust suit of this magnitude: There are also pending suits against Facebook parent Meta, Amazon, and Google.
“Antitrust has changed and is essentially back in an FDR-style,” said Tim Wu, a professor at Columbia Law School and architect of the Biden administration’s antitrust policies. “I think a signature of the FDR-style antitrust was that they didn’t play around the edges. If they thought an industry was anti-competitive, they sued everybody, including the largest monopolists, for stuff that was core to their business.”
What the lawsuit says
At its center, the lawsuit is “really a story about innovation, and interfering and controlling the path of innovation to preserve an existing monopoly,” said Fiona Scott Morton, a professor at Yale School of Management and former chief economist at the DOJ’s antitrust division.
The lawsuit cites five examples of how Apple has allegedly suppressed technology that would have improved competition in the smartphone market:
- It has restricted “super apps” that provide a wide array of functionalities — such…
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