The Justice Department on Thursday announced a sweeping antitrust lawsuit against , accusing the tech giant of engineering an illegal monopoly in smartphones that boxes out competitors, stifles innovation and keeps prices artificially high.
The lawsuit, filed in federal court in New Jersey, alleges that Apple has monopoly power in and leverages control over the iPhone to sa国际传媒渆ngage in a broad, sustained, and illegal course of conduct.sa国际传媒�
sa国际传媒淎pple has locked its consumers into the iPhone while locking its competitors out of the market,sa国际传媒� said Deputy Attorney General Lisa Monaco. Stalling the advancement of the very market it revolutionized, she said, it has sa国际传媒渟mothered an entire industry.sa国际传媒�
Apple called the lawsuit sa国际传媒渨rong on the facts and the lawsa国际传媒� and said it sa国际传媒渨ill vigorously defend against it.sa国际传媒�
The sweeping action takes aim at how Apple molds its technology and business relationships to sa国际传媒渆xtract more money from consumers, developers, content creators, artists, publishers, small businesses, and merchants, among others.sa国际传媒�
That includes diminishing the functionality of non-Apple smartwatches, limiting access to contactless payment for third-party digital wallets and refusing to allow its iMessage app to exchange encrypted messaging with competing platforms.
It specifically seeks to stop Apple from undermining technologies that compete with its own apps sa国际传媒� in areas including streaming, messaging and digital payments sa国际传媒� and prevent it from continuing to craft contracts with developers, accessory makers and consumers that let it sa国际传媒渙btain, maintain, extend or entrench a monopoly.sa国际传媒�
The lawsuit sa国际传媒� filed with 16 state attorneys general sa国际传媒� is just the latest example of aggressive antitrust law enforcement by a Justice Department that has also taken on Amazon, Google and other tech giants with the stated aim of making the digital universe more fair, innovative and competitive.
sa国际传媒淭he Department of Justice has an enduring legacy taking on the biggest and toughest monopolies in history,sa国际传媒� said Assistant Attorney General Jonathan Kanter, head of the antitrust division, at a press conference announcing the lawsuit. sa国际传媒淭oday we stand here once again to promote competition and innovation for next generation of technology.sa国际传媒�
Antitrust researcher Dina Srinavasan, a Yale University fellow, compared the lawsuitsa国际传媒檚 significance to the governmentsa国际传媒檚 action against Microsoft a quarter century ago sa国际传媒� in picking a sa国际传媒渢remendous fightsa国际传媒� with what has been the worldsa国际传媒檚 most prosperous company.
sa国际传媒淚tsa国际传媒檚 a really big deal to go up and punch someone who is acting like a bully and pretending not to be a bully,sa国际传媒� she said.
President Joe Biden has called for the Justice Department and to vigorously enforce . While its stepped-up policing of corporate mergers and questionable business practices has met resistance from some business leaders sa国际传媒� accusing the Democratic administration of overreach sa国际传媒� itsa国际传媒檚 been lauded by others as long overdue.
The case seeks to pierce the digital fortress that Apple Inc., based in Cupertino, California, has assiduously built around the iPhone and other popular products such as the iPad, Mac and Apple Watch to create what is often referred to as so its meticulously designed hardware and software can seamlessly flourish together while requiring consumers to do little more than turn the devices on.
The strategy has helped Apple attain annual revenue of nearly $400 billion and, until recently, . But Applesa国际传媒檚 shares have fallen by 7% this year even as most of the stock market has climbed to new highs, resulting in long-time rival Microsoft to seize the mantle as the worldsa国际传媒檚 most valuable company.
Apple said the lawsuit, if successful, would sa国际传媒渉inder our ability to create the kind of technology people expect from Apple sa国际传媒� where hardware, software, and services intersectsa国际传媒� and would sa国际传媒渟et a dangerous precedent, empowering government to take a heavy hand in designing peoplesa国际传媒檚 technology.sa国际传媒�
sa国际传媒淎t Apple, we innovate every day to make technology people love sa国际传媒� designing products that work seamlessly together, protect peoplesa国际传媒檚 privacy and security, and create a magical experience for our users,sa国际传媒� the company said in a statement. sa国际传媒淭his lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets.
Apple has as an indispensable feature prized by consumers who want the best protection available for their personal information. It has described the barrier as a way for the iPhone to distinguish itself from devices running on Googlesa国际传媒檚 Android software, which isnsa国际传媒檛 as restrictive and is licensed to a wide range of manufacturers.
sa国际传媒淎pple claims to be a champion of protecting user data, but its app store fee structure and partnership with Google search erode privacy,sa国际传媒� Consumer Reports senior researcher Sumit Sharma said in a statement.
The lawsuit complains that Apple charges as much as $1,599 for an iPhone and that the high margins it earns on each is more than double what others in the industry get. And when users run an internet search, Google gives Apple a sa国际传媒渟ignificant cutsa国际传媒� of the advertising revenue those searches generate.
The companysa国际传媒檚 app store also charges developers up to 30 percent of the appsa国际传媒檚 price for consumers.
Critics of Applesa国际传媒檚 anticompetitive practices have long complained that its claim to prioritize user privacy is hypocritical when profits are at stake. While its iMessage services is sheathed from prying eyes by end-to-end encryption, that protection evaporates the moment someone texts a non-Apple device.
But Will Strafach, a mobile security expert, said that while he believes Apple needs reigning in, he is concerned that the Justice Departmentsa国际传媒檚 focus on messaging may be misplaced and could weaken security and privacy.
sa国际传媒淚 am quite glad that access to SMS messages is restricted,sa国际传媒� said Strafach, creator of the Guardian Firewall app.
He notes that a number of apps, ostensibly for weather and news, on iPhones have secretly and persistently sent userssa国际传媒� GPS data to third parties. Strafach said he is concerned weakened Apple security sa国际传媒渃ould open the door to stalkerware/spouseware, which is already more difficult to install on Apple devices compared to Android.sa国际传媒�
However, prominent critic Cory Doctorow has complained that while Apple has blocked entities like Facebook from spying on its users it runs its sa国际传媒渙wn surveillance advertising empiresa国际传媒� that gathers the same kinds of personal data but for its own use.
Fears about an antitrust crackdown on Applesa国际传媒檚 business model havensa国际传媒檛 just contributed to the drop in the companysa国际传媒檚 stock price. There is also concerns it lags Microsoft and Google in the push to develop products powered by artificial intelligence technology.
Antitrust regulators made it clear in their complaint that they see Applesa国际传媒檚 walled garden mostly as a weapon to ward off competition, creating market conditions that enable it to charge higher prices that have propelled its lofty profit margins while stifling innovation.
sa国际传媒淐onsumers should not have to pay higher prices because companies break the law,,sa国际传媒� said Attorney General Merrick Garland. Left unchallenged, Apple would sa国际传媒渙nly continue to strengthen its smartphone monopoly,sa国际传媒� he added.
With the attempt to rein in Applesa国际传媒檚 dominance, the Biden administration is escalating an antitrust siege that has already triggered lawsuits against Google and Amazon accusing them in engaging in illegal tactics to thwart competition, as well as unsuccessful attempts to block acquisitions by Microsoft and Meta Platforms, formerly Facebook.
Applesa国际传媒檚 business interests are also entangled in the Justice Departmentsa国际传媒檚 case against Google, which and is headed toward final arguments scheduled to begin May 1 in Washington, D.C. In that case, regulators are alleging Google has stymied competition by paying for the rights for its already dominant online search engine to be the automatic place to handle queries on the iPhone and a variety of web browsers in an arrangement that generates an estimated $15 billion to $20 billion annually.
Now that the Justice Department is mounting a direct attack across its business, Apple stands to lose even more.
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Liedtke reported from San Francisco.
Michael Liedtke, Lindsay Whitehurst, Frank Bajak And Mike Balsamo, The Associated Press
