Tweet
Government is really abusing its power here. How is Apple creating a Monopoly in the phone market exactly?
DOJ sues Apple over iPhone monopoly in landmark antitrust case (cnbc.com)
DOJ sues Apple over iPhone monopoly in landmark antitrust case
The Department of Justice sued Apple on Thursday, saying its iPhone ecosystem is a monopoly that drove its “astronomical valuation” at the expense of consumers, developers and rival phone makers.
The government has not ruled out breaking up one of the largest companies in the world, with a Justice Department official saying on a briefing call that structural relief was on the table if the U.S. were to win.
The lawsuit claims Apple’s anti-competitive practices extend beyond the iPhone and Apple Watch businesses, citing Apple’s advertising, browser, FaceTime and news offerings.
“Each step in Apple’s course of conduct built and reinforced the moat around its smartphone monopoly,” according to the suit, filed by the DOJ and 16 attorneys general in New Jersey federal court.
Apple shares fell more than 4% during trading Thursday. A breakup of Apple if successful would be one of only a handful of breakups under the Sherman Act. The DOJ has considered using it in other antitrust cases, but has not done so since the breakup of the Bell System in 1982.
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.
The challenge represents a significant risk to Apple’s walled-garden business model. The company says that complying with regulations costs it money, could prevent it from introducing new products or services, and could hurt customer demand.
The lawsuit could force Apple to make changes in some of its most valuable businesses: 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.
U.S. Attorney General Merrick 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.”
The Department of Justice sued Apple on Thursday, saying its iPhone ecosystem is a monopoly that drove its “astronomical valuation” at the expense of consumers, developers and rival phone makers.
The government has not ruled out breaking up one of the largest companies in the world, with a Justice Department official saying on a briefing call that structural relief was on the table if the U.S. were to win.
The lawsuit claims Apple’s anti-competitive practices extend beyond the iPhone and Apple Watch businesses, citing Apple’s advertising, browser, FaceTime and news offerings.
“Each step in Apple’s course of conduct built and reinforced the moat around its smartphone monopoly,” according to the suit, filed by the DOJ and 16 attorneys general in New Jersey federal court.
Apple shares fell more than 4% during trading Thursday. A breakup of Apple if successful would be one of only a handful of breakups under the Sherman Act. The DOJ has considered using it in other antitrust cases, but has not done so since the breakup of the Bell System in 1982.
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.
The challenge represents a significant risk to Apple’s walled-garden business model. The company says that complying with regulations costs it money, could prevent it from introducing new products or services, and could hurt customer demand.
The lawsuit could force Apple to make changes in some of its most valuable businesses: 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.
U.S. Attorney General Merrick 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.”
Comment