Apple uses illegal monopoly to ensure iPhone’s dominance, landmark DOJ lawsuit claims

Apple is violating antitrust laws by blocking fair competition to ensure the dominance of its iPhone, the Justice Department alleged Thursday in a long-awaited federal lawsuit that could upend the business model of the world’s second-most valuable company.

Filed in a New Jersey federal court by the DOJ and 16 state attorneys general, the lawsuit alleges that Apple has maintained an illegal monopoly over the smartphone market through unfair tactics, such as onerous App Store fees and restricted developer access to key features of its products, resulting in higher prices and fewer choices for American shoppers.

“Consumers should not have to pay higher prices because companies violate the antitrust laws,” Attorney General Merrick Garland said in a statement. “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.”

The landmark lawsuit is arguably the most significant enforcement action taken against Apple to date by the DOJ, which has now sued the company three times over the last 14 years. The DOJ is also locked in an ongoing legal battle with Google over alleged antitrust violations, while the Federal Trade Commission has targeted Meta and Amazon.

Led by CEO Tim Cook, Apple was already in the midst of a heated public war of words with “Fortnite” maker Epic Games over its App Store practices – including its policy of taking a 30% cut of purchases made within the App Store – and intense regulatory scrutiny in Europe.

Apple shares were down 2% in early trading Thursday. The Cupertino, Calif.-based tech behemoth has a market cap of $2.71 trillion, trailing on Microsoft’s $3.16 trillion.