America’s Justice Department has confirmed a landmark antitrust lawsuit against Apple Inc (NASDAQ:AAPL, ETR:APC), accusing the tech giant of illegally monopolising the smartphone market.
Backed by 16 states, the department said Apple had breached US antitrust laws by selectively restricting, and withholding access points from, developers.
“No matter how powerful, no matter how prominent, no matter how popular - no company is above the law,” deputy attorney general Lisa Monaco said as the lawsuit was unveiled.
Through such practices, the department argued Apple prohibits rivals by preventing access to its hardware and software, ultimately limiting development of products that could be used on devices other than the iPhone.
This has “allowed Apple to extract higher prices from consumers, impose higher fees on developers and creators, and to throttle competitive alternatives,” as per assistant attorney general Jonathan Kanter.
The 88-page lawsuit, filed in New Jersey, is also set to probe whether Apple’s practice of developing products that easily integrate with each other, but not other firms’ devices, is unfair.
According to Wedbush analysts, Apple is inevitably set to face a fine or will have to settle the lawsuit, which comes as part of a wider clampdown on antitrust rules by Joe Biden’s government.
Indeed, the case marks the third bought against Apple by the Justice Department since 2009, with Wedbush noting the latest had taken ‘years’ to build, following reports of the case earlier in the day.
Apple responded: "This lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets. If successful, it would hinder our ability to create the kind of technology people expect.
"It would also set a dangerous precedent, empowering government to take a heavy hand in designing people’s technology.
"We believe this lawsuit is wrong on the facts and the law, and we will vigorously defend against it."
Apple also faced a separate blow as news emerged of Meta Platforms Inc, Microsoft Corp, X, and Match Group’s support of a case against its App Store fees by Fortnite maker Epic Games.
Apple shares slipped 3.7% to US$172.03 on the news.