DOJ Accuses Apple of Digital Wallet and Smartphone Monopoly
The U.S. government has filed its long-expected antitrust case against Apple and its iPhone.
The suit, filed Thursday (March 21) by the Department of Justice (DOJ) and 16 other state and district attorneys general, accused Apple of monopolizing or attempting to monopolize the market for smartphones.
“Consumers should not have to pay higher prices because companies violate the antitrust laws,” Attorney General Merrick Garland said in a news release.
“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.”
The complaint alleges that the tech giant keeps this monopoly alive by “selectively imposing” contractual restrictions on developers and denying them important access points. The DOJ also alleges Apple takes measures to undermine apps, products and services that would make its customers less dependent on the iPhone.
In a statement provided to PYMNTS, Apple said the suit threatens the principles that help its products stand out.
“If successful, it would hinder our ability to create the kind of technology people expect from Apple — where hardware, software, and services intersect,” the company said.
“It would also set a dangerous precedent, empowering the government to take a heavy hand in designing people’s technology. We believe this lawsuit is wrong on the facts and the law, and we will vigorously defend against it.”
According to the lawsuit, Apple’s anticompetitive practices include hindering the growth of super apps that would make it easier for consumers to switch between smartphone platforms. It also alleges the company has prevented third-party apps from offering tap-to-pay functionality, “inhibiting the creation of cross-platform third-party digital wallets.”
The suit comes as Apple is facing antitrust pressure in Europe, where it was recently fined almost $2 billion for allegedly abusing its position in the music streaming market.
The European Commission accuses Apple of preventing app developers from telling iOS users about alternative and less costly music services — such as rival Spotify — something that is forbidden under European antitrust regulations.
Apple has said it would appeal the fine, and has lambasted what it called the EC’s “failure to uncover any credible evidence of consumer harm.”
And earlier this week, Meta, Microsoft, X and Match Group asked a court to block Apple’s plan to allow outside payment options in its App Store.
The tech firms argue that Apple’s proposal contravenes a ruling from 2021 that declared Apple in violation of California’s unfair competition laws, which mandates that the company allow app developers to direct users to their own payment systems.
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