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Justice Department sues Apple over iPhone monopoly in landmark antitrust case

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The Justice Department sued Apple in an antitrust case, saying that the iPhone maker has a monopoly over the phone market that harmed consumers, developers, and rival companies. The lawsuit, filed by the DOJ and 16 attorneys general in federal court in New Jersey, claims Apple’s anti-competitive practices extend beyond the iPhone and Apple Watch businesses, citing Apple’s advertising, browser, FaceTime and news offerings. Sixteen state and district attorneys general joined the DOJ in bringing the case.

The Justice Department said in a release that to keep consumers buying iPhones, Apple moved to block cross-platform messaging apps, limited third-party wallet and smartwatch compatibility, and disrupted non-App Store programs and cloud streaming services.  Attorney General Merrick Garland said in a statement announcing the lawsuit: “We allege that Apple has maintained monopoly power in the smartphone market, not simply by staying ahead of the competition on the merits, but by violating federal antitrust law. If left unchallenged, Apple will only continue to strengthen its smartphone monopoly. Each step in Apple’s course of conduct built and reinforced the moat around its smartphone monopoly.”

Garland said at a news conference that the Supreme Court defines monopoly power as “the power to control prices or exclude competition .. As set out in our complaint, Apple has that power in the smartphone market,” Garland said. “If left unchallenged. Apple will only continue to strengthen its smartphone monopoly.”

Apple said in a statement that it would fight against the premise of the lawsuit. with an Apple spokesperson saying:  “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 from Apple—where hardware, software, and services intersect. It would also set a dangerous precedent, empowering government to take a heavy hand in designing people’s technology.”

The lawsuit could force Apple to make changes in the iPhone, in which Apple reported more than $200 billion in sales in 2023, the Apple Watch, part of the company’s $40 billion wearables business, and its profitable services line, which reported $85 billion in revenue. The Justice Department said Apple has fought cloud streaming services on its App Store platform, blocking consumer access to high-quality video games on iPhones. Garland said the DOJ is also looking at changing policies around Apple Wallet, the company’s app for phone-based credit cards and payments.

https://www.nbcnews.com/business/business-news/apple-sued-doj-antitrust-monopoly-biden-rcna144424

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