US justice department sues Apple for 'having illegal monopoly on smartphones'

Tech giant Apple is being sued by the US Department of Justice for what it has called 'a monopoly over the smartphone market', ITV News Amy Lewis reports

Words by Shalet Serrao, ITV News Assistant News Editor

The US Department of Justice has brought a landmark case against Apple, accusing the tech giant of allegedly monopolising the smartphone market by blocking competition and inadvertently impacting consumers, developers and rival companies.

The complaint goes beyond the iPhone and Apple Watch, with the Biden administration accusing the company of other anti-trust activities.

These include: curtailing the growth of other rival apps and services; making it harder for Apple Watchers to switch due to issues with compatibility; making it harder for users to switch between devices; and blocking the growth of game streaming apps on its devices.

The lawsuit alleges that this has inflated the price of the devices for consumers - "$1,599 for an iPhone" with a "high margins on each one, more than double those of others in the industry" it states, all the while suffocating competition.

US Attorney General Merrick Garland, speaking in a briefing on Thursday announcing the anti-trust lawsuit, said that Apple's share of the US smartphone market now exceeded 65% and that it had gained this monopoly not by "staying ahead of the competition on the merits, but by violating federal antitrust law.”

The lawsuit by the Justice department also takes a dive at Apple Wallet which is the company's app for operating transactions.

"By denying iPhone users the ability to choose their trusted banking apps as their digital wallet, Apple retains full control both over the consumer and also over the stream of income generated by forcing users to use only Apple-authorised products in the digital wallet," it states.

The US Department of Justice has brought two prior cases against the tech giant, both over the company's business practices.

“Apple creates barriers and makes it extremely difficult and expensive for both users and developers to venture outside the Apple ecosystem,” Mr Garland said during his briefing, while adding that the company's monopolization "threaten[ed] the free and fair markets upon which our economy is based.”

Meanwhile on Thursday, Apple's share price fell by 4%.

Apple isn't the only big tech company facing scrutiny from world governments for breaching anti-competition laws.

Google and Microsoft have faced similar lawsuits in the past by the US Department of Justice.

Currently, Apple is trying to juggle another $1.95bn fine imposed on it by the European Commission for breaking anti-competition laws.

This came after Spotify complained to regulators about Apple's effort to restrict third party streaming services in order to bolster Apple Music.

“If left unchallenged. Apple will only continue to strengthen its smartphone monopoly,” Mr Garland added.

The lawsuit could take years to reach fruition, but it's looking to restore a fair and competitive atmosphere, asking the court to prevent Apple from “using the terms and conditions of its contracts with developers, accessory makers, consumers, or others to obtain, maintain, extend, or entrench a monopoly.”

In a statement to ABC News, Apple strongly rebuked the lawsuit, saying the company plans to "vigorously defend" itself.

"At Apple, we innovate every day to make technology people love - designing products that work seamlessly together, protect people’s privacy and security, and create a magical experience for our users," the company said.

"This lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets.

"We believe this lawsuit is wrong on the facts and the law, and we will vigorously defend against it," Apple added.

Apple has not responded to ITV News's request for a comment.

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